Pag-IBIG housing loans post double digit growth

CEBU, Philippines - The Home Development Mutual Fund, or Pag-IBIG Fund, registered double-digit growth in housing loan take-outs in the Visayas in the first eight months of 2016, an official said.

Juanito Eje, vice president for corporate sales, reported that loan value increased by 39 percent from January to August to P3.89 billion from P2.8 billion in the same period in 2015.

The value funded over 4,800 housing units in the Visayas, up 50 percent from the same period last year, Eje said showing official data.

"You have enough market that you can explore," he told local property developers at the recent Housing Summit 2016 held in Cebu City.

But he also stressed the challenge of producing more affordable houses whose demand is really growing.

"The only challenge is production of more affordable housing," the official said.

Eje said that most of loan packages in the Visayas are priced higher, urging developers to offer more affordable housing loans.

Although he said the trend is understandable, considering that raw land particularly in Cebu is valued higher, and that developers should build socialized houses outside the city.

He noted that socialized housing only has an over three percent share of the total loan take-outs during the period. Although this is a little improvement from the 1.29 percent share recorded last year.

In 2015, Visayas' housing loan take-out stood at P4.9 billion, five percent below the P5.2 billion target. The value would be used to fund 5,653 houses, also below the target of 8,126 houses.

Cebu accounted for more than half of the 2015 loan value take-out at P2.78 billion, representing 2,896 housing units.

Pag-IBIG Visayas covers the areas of Iloilo, Bacolod, Cebu North, Cebu South, and Tacloban City.

This year, state-run firm targets to release P5.82 billion worth of housing loans.

Housing loan take-out is the process where buyers initially appraised by developers become Pag-IBIG borrowers after qualifying under the fund's criteria.

The state firm lowered down its housing loan rate to 5.5 percent a year in July this year.

Starting July 1, eligible borrowers can opt for 5.5 percent per annum interest rate for the first year of the loan term for housing loans up to P6 million.

Previously, the fund offered a three-year minimum fixed period for an end-user financing loan at 6.5 percent.

“Pag-IBIG Fund’s End-User Financing Program will come with rates of 5.500 percent for a 1-year fixed-pricing period, 6.500 percent for three years, 7.270 percent for five years, 8.035 percent for 10 years, 8.585 percent for 15 years, 8.800 percent for 20 years, 9.050 percent for 25 years, and 10.000 percent under a 30-year fixed-pricing period,” Pag-IBIG said.

To be able to get the 5.5 percent rate, the borrowers’ monthly amortization should not exceed 30 percent of gross monthly income and the ratio of the loan amount to the appraised value of the collateral should not exceed 75 percent. (FREEMAN)