Pag-IBIG posts banner year, prepares to lower loan rates

The Home Development Mutual Fund (HDMF) or the Pag-IBIG fund enjoyed another banner year as it reported a record high net income of P30.27 billion in 2017.

Speaking before PagIBIG stakeholders yesterday, Housing and Urban Development Coordinating Council (HUDCC) Secretary Eduardo del Rosario said the HDMF was able to grow its net income by 21 percent to P30.27 billion last year from P24.9 billion in 2016.

Del Rosario, who chairs the Pag-IBIG Board of Trustees, said this is the highest net income recorded in the fund’s history, and the first time the fund has breached the P30billion mark.

“(The year) 2017 was a record-breaking year for PagIBIG Fund. It was a year that each of us can be proud of. 2017 reaffirmed Pag-IBIG Fund’s standing as a strong and reliable partner of Filipino workers and other stakeholders,” Del Rosario said during the Pag-IBIG Fund’s 2017 Chairman Report held in Pasay City yesterday.

“As Pag-IBIG’s contribution to the pro-poor agenda of President Duterte, homeownership was made even more affordable, especially to the low-income earners,” he said.

According to Del Rosario, the growth in Pag-IBIG’s net income was driven by the increase in gross revenues, which amounted to P43.33 billion in 2017, a 13 percent improvement from the previous year’s level.

As a result, he said the dividends to be distributed to Pag-IBIG members in 2017 could reach P27.29 billion if the HDMF board of trustees approves today the same pay out share of 90 percent from the fund’s net income.

This would translate to a dividend rate of 7.61 percent for regular members, and 8.1 percent for members under the Modified Pag-IBIG 2 savings program, the highest ever dividend rate the agency would pay.

Under PAG-IBIG’s Charter, the fund must declare at least 70 percent of its net income as dividends.

In 2017, Del Rosario said the HDMF was able to provide P65.1 billion in home loans to 80,964 borrowers, higher than the P57.3 billion recorded the previous year. Of the total number of borrowers, 24,705 were low-wage earners who applied for socialized housing loans.

Pag-IBIG attributed this to the introduction of the lowest affordable housing loan interest rate of three percent.

Housing loan collections in 2017 also reached P51.6 billion, with Pag-IBIG reporting a performing loan ratio of 90 percent.

Multi-purpose loans released last year also amounted to P45.37 billion, while members’ savings collection reached P36.3 billion, also a record high for Pag-IBIG.

Meanwhile, HDMF chief executive officer Acmad Rizaldy Moti said the fund is planning to further lower the interest rates on its regular housing loans starting Feb. 14.

Moti said interest rates for regular housing loans starting Valentines’ Day will become as low as 5.375 percent per annum from the current 5.5 percent for a one-year repricing period.

For a three-year fixed-pricing period, the interest rate would be adjusted to 6.375 percent from 6.5 percent, he added.

According to Moti, the reduced interest rate would translate to about P31 to P32 million in opportunity lost for Pag-IBIG, which he said is not a significant amount.

Besides, he said this would be more than offset by the projected increase in housing loan takeouts this year, which is estimated to increase to as much as P75 billion from the current P65.1 billion.

“In 2018, we expect to hit a minimum of P72 billion, more than 10 percent up, but I believe we will hit about P75 billion. So because of the lowering (of interest rates), more members may go to Pag-IBIG Fund and borrow,” he said.