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GSIS to course house loans through Pag-IBIG

BY ANGELA LORRAINE CELIS
[ malay.com.ph ] May 19, 2011
The Government Service Insurance System (GSIS) will make available to "home-lending experts" such as Pag-IBIG P5 billion for housing loans to government employees.
"I think as a starting shot, we can probably make P5 billion available to them," GSIS president and general manager Roberto Vergara said.
"What we have decided is to suspend direct lending and to partner with experts in home lending," Vergara said.
Vergara said the GSIS decided to tie-up with these agencies since it lacks the expertise to run a home lending program.
"Primarily because we are not really a housing organization. We’re a pension fund," Vergara said.
"We also don’t provide any support to borrowers. Borrowing for a housing loan is one of the more important decisions people make, and we don’t do any counseling to tell people to study if they are borrowing much more than they can afford," he said.
He added that the bracket of affordability for most government employees is P500,000 to P700,000.
"At Pag-IBIG, if you borrow within that range, the interest rate is around 7 percent. Our loan for housing carries an interest of 8 percent, so we’re not even competitive," Vergara said.
"I really think that if we partner with these agencies, it is possible that we will be lending more than a billion in a year," Vergara added.
Vergara added that the decision to partner with home-lending experts is not a result of the GSIS’ alleged lack of funds.
"People see this as an admission that our fund is in a poor state, but far from that, the fund is in a very solid state," Vergara said.
"People always resent change because there’s a feeling that what you inherit in the new structure will be different from what we’re used to. But in this particular case, we really think this is the right way forward," he added.
Vergara also said the agency’s housing program only accounts for 12 percent of its loan book. The majority of the loans are service loans.
"I don’t know how much demand there is from government employees for housing because based on what we had last year, that’s only a billion of demand. But maybe because our rates are not competitive," Vergara said.
"If there’s demand for more (than P5 billion), then we’ll look into it," he added.
GSIS executives are currently meeting with their counterparts in Pag-IBIG.
"So, in fact, what we’re doing is increasing the funds that are available for home lending," Vergara said.
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