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Stricter Pag-IBIG rules dampen loans

[ ] May 9, 2011
Stricter processing of loans by the Home Development Mutual Fund (Pag-IBIG) weeds out ghost borrowers but slows down approvals, making the target of building 100,000 housing units this year a "tall order".
Darlene Marie Berberabe, chief executive of the Pag-IBIG Fund, said the fund disbursed P14 billion in housing loans in the first quarter, down 30 percent from the first quarter of 2010, following drastic changes in the approval process.
Berberabe said the interim measures, meant to address the "vulnerability of guidelines," will be implemented permanently beginning in June or July.
The stricter guidelines were prompted by the Globe Asiatique scandal, in which it was discovered that loans were taken out by ghost borrowers and units were sold to multiple buyers. The measures include pre-validation of borrowers from the developers’ list by Pag-IBIG itself. In the past, the developers virtually approved the borrowers. The borrowers’ capacity to pay will also be checked.
Berberabe said the new measures have their cost.
For example, what used to take seven days to approve now takes 15 days.
Berberabe also said Pag-IBIG is also improving its institutional loan programs, especially for group housing, which finances more affordable housing units for a greater number of workers.
Berberabe said Pag-IBIG hopes to adjust to the new system by the third to fourth quarter of the year to catch up on disbursements and meet the target of financing loans for 100,000 houses.
Berberabe said demand is still picking up, consistent with the 3.6 million unit backlog identified by the Housing and Urban Development Coordinating Council.
Berberabe said half of the housing loans disbursed by the fund are for those costing P1 million or below.
"These are borrowers who stand very little chance of getting housing loans from banks," Berberabe said.
In 2010, Pag-IBIG was able to provide 62,041 members housing loans worth P40 billion.
This year, the agency has allotted P50 billion for housing loans.

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