by Elaine R. Alanguilan
[ manilastandardtoday.com ] December 5, 2011
THE Home Mutual Development Fund or Pag-IBIG Fund plans to cut its interest rates on housing loans of P1 million and above to be more competitive and get more of its members to take advantage of its home lending program, an official said last week.
“We are looking at revising the interest rate structure for our home lending,” Darlene Marie Berberabe, chief executive of the government-controlled corporation that serves as a provident and housing fund, said in a telephone interview.
“We are looking at pegging our interest rates at market rates. Our present rate of 11.5 percent for housing loans of P3 million is too high. Some banks are charging below 8 percent for the same amount.”
Berberabe said the plan to reduce the interest rates on housing loans of P1 million and above was presented to the fund’s board committee early this month. It would then be elevated to the board of trustees later this month.
She said the board committee was receptive to the proposal. It would only be a matter of revising the fund’s underwriting guidelines.
“The changes will be fully felt next year when we start adopting the new rates,” Berberabe said.
“By that time, our members could get to borrow under our shelter program at much lower interest rates.”
Pag-IBIG has a tiered interest-rate structure. It charges 6-percent interest on P400,000 worth of loans and below and as high as 11.5 percent on its highest loanable amount of P3 million.
Housing provision is one of Pag-IBIG’s core mandates, the other being savings generation. It has been in the home-lending business for 30 years, so that now its mortgage accounts comprise about 45 percent of the entire industry’s loan portfolio, making it the country’s biggest housing fund.
The fund released P22.7 billion last year, and that led to the construction and purchase of 32,398 housing units. It has allocated P50 billion for home lending this year.
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