GSIS defers to Pag-Ibig for members’ housing

GOVERNMENT Service Insurance System (GSIS) has earmarked a credit facility to Home Development Mutual Fund or Pag-IBIG to finance the housing requirements of state workers and pensioners.

The two state-run financial institutions signed the P5 billion credit facility agreement that would cater to 1.7 million GSIS members and pensioners.

The credit facility is in line with the pension fund’s decision to do away with its direct lending program in favor of forging partnerships with key shelter agencies, which have the proven expertise in home lending.

“We are extending to Pag-IBIG an initial funding to augment its existing funds to be extended to our members via home lending. This energizes further its own home loan program,” Robert Vergara, GSIS president, said.

The agreement was signed in the presence of Vice President Jejomar Binay, who is concurrent chairman of the Housing and Urban Development Coordinating Council.

“We want to synchronize our efforts in the implementation of the government housing program and to avoid duplication with the key shelter agencies’ functions. More importantly, this agreement proves that the pension fund continues to be a vehicle for realizing the home ownership dream of our stakeholders in our role as a partner of Pag-IBIG,” Vergara said.

“Our home lending program is just a fraction of what Pag-IBIG is doing. It is better positioned to assess the capability of our members to take on housing loans. It has the expertise,” he said.

In 2010, the GSIS extended only P600 million in housing loans to its more than 500 members against Pag-IBIG’s P5.5-billion home lending to over 11,000 government employees, which was 10 times more than what GSIS lent for housing, and 20 times more than the number of government employees that availed of the housing loan program.

“This is not a one-off credit facility. It would be subject to the speed with which Pag-IBIG is able to deploy the funds. If it’s all used up then we will sit down and top off once more,” Vergara said.

The executive said it would be more favorable for its members to tap Pag-IBIG for their home lending needs as it charges lower interest rates.

GSIS charges 12 percent for its home loans, while Pag-IBIG has a tiered interest rate structure ranging from a low 6 percent to as high as 11.5 percent, depending on the loan amount.
Half of the housing loan portfolio of GSIS or more than 16,000 housing units are already foreclosed or canceled.

“It has been a difficult decision for us to stop direct home lending for our members but we are, above all, obligated to them to ensure that their contributions are managed prudently for their greater benefit,” Vergara said.

He said he has requested Pag-IBIG to put up a special lane for GSIS members and pensioners to facilitate the processing of their housing loans. –Katrina Mennen A. Valdez, Manila Times