THE HOME DEVELOPMENT Mutual Fund (Pag-IBIG Fund) aims to disburse P167 billion in housing loans by yearend, supported by its partnerships with property developers under the expanded Pambansang Pabahay Para sa Pilipino (4PH) program.
“We intend to extend to about P167 billion worth of housing loans this year. And I think we will hit 90 to 95%,” Pag-IBIG Deputy Chief Executive Officer for Marketing, Product Development, and Sales Cluster Alexander Hilario G. Aguilar told BusinessWorld on the sidelines of an event last week.
Mr. Aguilar said he hopes to partner with more property developers to make homeownership accessible to more Filipinos.
“The more the merrier. But I think the basic idea behind it is for us to be able to expand the choices for any member to choose between both high-end and low-end options,” he said.
The Pag-IBIG Fund is expanding the range of properties eligible for financing under its housing loan programs through partnerships with developers, including Megawide Construction Corp., Robinsons Land Corp., SM Development Corp., Filinvest Land, Inc., Rockwell Land Corp., and DMCI Homes.
Under these partnerships, qualified buyers of residential projects accredited by Pag-IBIG can apply for housing loans to finance their purchases.
“For the longest time, Pag-IBIG is known to be focused on the affordable segment. We have a lot of members who can’t borrow from Pag-IBIG because the top-tier developers prefer it to be from the bank. So this is how important our partnerships are. Because the high-end, the beautiful condos will also enter Pag-IBIG and improve its portfolio,” Mr. Aguilar said.
For next year, the fund is aiming to disburse P170 billion in housing loans, but Mr. Aguilar said this could be adjusted depending on this year’s performance.
This also comes as they are targeting to produce 30,000 housing units under the 4PH program over the next two years.
Mr. Aguilar said the Pag-IBIG Fund’s asset quality will remain stable until next year despite risks of elevated inflation as they have a performing loans ratio (PLR) of around 4%.
“We have a good system of reminding our members to be religious about their amortization. We’re doing good insofar as PLR is concerned,” he said. “We expect that everything will be stable until next year.”
Meanwhile, property consultants said the Pag-IBIG Fund’s partnerships with developers are expected to help reduce the housing backlog, while easing the current oversupply of condominium units.
Colliers Philippines Research Director Joey Roi Bondoc said the goal of this initiative is to help developers sell nearly 80,000 ready-for-occupancy (RFO) units just in Metro Manila.
“We believe that, and in fact I’ve spoken with some Pag-IBIG officials previously, and that’s their goal, to help these developers offer these unsold RFOs to Metro Manila buyers. And of course, it makes sense that Pag-IBIG raised the maximum loan amount,” he said.
Last May, the Pag-IBIG Fund raised its maximum housing loan amount per borrower to P10 million.
Mr. Bondoc said this move would benefit lower mid-income projects, which are around P3.6 million to P7 million, and account for more than 40% of the unsold RFO condo units in Metro Manila.
However, he said the higher loan amount will still not be enough for mid-income projects that are priced at P10 million and above.
“So, if you look at P10 million and above, it appears that those projects will still see some challenges in terms of financing,” Mr. Bondoc said.
The preferential rates offered under the partnerships also help spur demand for some housing segments, he added.
However, Mr. Bondoc said there could be a need to review the maximum loanable amount in the next few years, and possibly raise it to P12 million.
Meanwhile, Dino Palanca, head of research at Savills Philippines, said in a Viber message that the impact of the Pag-IBIG Fund’s recent initiatives will depend on affordability of the housing units.
“The country needs housing across different price points, especially for low-income families who remain underserved,” he said in a Viber message. “Making higher priced units eligible for Pag-IBIG financing can help mid-income households, but it does not automatically solve the shortage of affordable housing.”
Mr. Palanca said the country needs a steady supply of “reasonably priced homes, supported by accessible financing, suitable locations, and reliable transport and basic infrastructure.”
“Ultimately, the goal should be to expand housing choices without losing sight of affordability. Partnerships between government and private developers can make a meaningful difference, provided that they deliver homes that meet the needs and purchasing capacity of different income groups,” he said.
Mr. Bondoc also said the Pag-IBIG fund should consider partnering with local governments that can provide land for housing projects, as well as boutique developers that can build more affordable and socialized projects.
“So, you’re now helping not just the big income families, but really those coming from the affordable and economic segments of society,” he said. — Aaron Michael C. Sy