Tighter Pag-IBIG rules alarm private developers

The state-controlled Home Development Mutual Fund or Pag-IBIG Fund has tightened its loan disbursement in the aftermath of the Globe Asiatique scandal, raising concerns from subdivision and housing developers catering to the mass housing market.

In a briefing yesterday, officials from the Subdivision and Housing Developers Association (SHDA) also cited kinks in the computerization of the Land Registration Authority (LRA) as another major challenge to the industry. As LRA implemented a computerization program, that same process aimed at streamlining business processes and linking all the Registries of Deeds nationwide has ironically extended the transaction processing from several days to more than three months, the association said.

“We’re in the middle of a perfect storm,” said SHDA president Manuel Crisostomo, citing these two major challenges to the industry. He said the association was in continuing dialogues with the concerned government agencies and the Housing Urban Development Coordinating Council to address these bottlenecks.

As Pag-IBIG has imposed more stringent housing loan rules in the aftermath of the Globe Asiatique controversy, SHDA said there was a sharp decline in the agency’s loan takeouts since mid-2010. Thousands of loan applications—most of which are being sought by people in dire need of housing—have either been severely delayed or disqualified, the association said.

The average loan takeout of the housing fund has fallen 37 percent to about P2.4 billion a month this year from about P4 billion a month in 2009 or prior to the Globe Asiatique scandal.

About 65 percent of local housing finance is typically covered by Pag-IBIG while only 35 percent is covered by the banking system. The average loan size is P750,000 up to P1 million but SHDA—which also includes the country’s biggest developers like Ayala Land, Robinsons Land and SM Development Corp.—also caters to “socialized” housing or those selling units worth about P400,000.