Pag-IBIG Fund releases P100 billion in member benefits

MANILA, Philippines – The Home Development Mutual Fund or Pag-IBIG has released P100 billion in benefits to its members in 2009, Vice President and Chairman of the Housing and Urban Development Coordinating Council (HUDCC) Noli De Castro said the other day.

Pag-IBIG Fund has set record-breaking figures in benefits granted to its more than seven million members last year.

Under its short-term loan programs covering multi-purpose and calamity, provident claims as well as death benefits, the Fund extended an unparalleled P49 billion from January to December 2009, up by 48 percent from P33 billion in 2008.

In calamity lending alone, Pag-IBIG has disbursed P14.8 billion serving more than 869,000 typhoon-stricken members from January to December 2009, making the agency the biggest calamity loan provider in the country.

It has also released P30 billion in multi-purpose loans benefiting 1.7 million members.

“This shows that Pag-IBIG continues to provide a singular lifeline to its members and is filling a big financing gap for Filipino workers – with many of its members turning to the Fund to pay for tuition fees, hospital bills, appliance purchases, minor home repairs, and for small business capital,” De Castro said.

Despite the global financial crisis which affected the country in 2009, Pag-IBIG extended P45.7 billion worth of housing loans to over 74,000 members last year, the highest total loan amount and the biggest number of borrowers for a single year in the Fund’s entire history.

The Fund has similarly lent P4.3 billion to private developers which helped finance the construction of 90 housing projects.

Pag-IBIG attributed its robust performance to the efficient administration of members’ contributions and implementation of dramatic reforms initiated by De Castro and the Pag-IBIG Fund board of trustees, which allowed members easy access to its loan facilities.

“Upon the direction of our chairman and our board, we adjusted our housing loan interest rates five times from 2006 to April 2009, resulting in lower interest rates. The biggest cuts were in the lower loan packages targeting minimum wage earners up to middle-income workers,” said chief executive officer Jaime Fabiaña.

“Today, Pag-IBIG offers the lowest interest rates in the market: six percent for loans up to P400,000, seven percent for loans above P400,000 to P750,000, and 8.5 percent for loans over P750,000 to P1 million,” he said.

The new interest rates, he said, will translate to savings for Pag-IBIG borrowers in the P400,000 housing loan package. The monthly amortization for 30 years goes down from P2,661.21 under the old rate, to only P2,398.00.

He pointed out that as a result of these reforms, more and more Filipino families are realizing “they need not wait for higher salaries, or turn to overseas employment, to be able to afford a home.”

Pag-IBIG continues to post increases in its net income as well, ending 2009 with an income level of P12.6 billion, the highest in its history. –Pia Lee-Brago (The Philippine Star)