Pag-IBIG fund to work with housing developers to ease financing constraints

MANILA, Philippines—The state-owned Home Development Mutual Fund or the Pag-IBIG is working with housing developers to ease constraints on house financing without sacrificing prudential remedial measures introduced in the aftermath of the Globe Asiatique (GA) controversy.

Pag-IBIG has also teamed up with the Land Registration Authority to map out an inter-agency linkage in streamlining processes for housing delivery, thus supporting property developers’ target to build at least 1.5 million in affordable housing units within the next five years. The housing backlog at present is estimated at 3.7 million units.

In a press briefing on Wednesday, top officials of the Pag-IBIG, Land Registration Authority and the Subdivision and Housing Developers Association (SHDA) unveiled initiatives to boost mass housing in the country.

“We are recognizing that we’re partners in the housing industry and we’re open in addressing their issues expeditiously,” PagIBIG president Darlene Marie Berberabe said.

LRA administrator Eulalio Diaz III unveiled a threefold action plan to improve housing delivery: “First is a streamlining process, second is eradicating fake titles and third is to professionalize the ranks of the LRA.”

“This will be one huge step towards giving every Filipino family the opportunity to have their own homes through responsible, sustainable and affordable housing programs,” SHDA president Manny Crisostomo said.

Berberabe said it was necessary for Pag-IBIG to implement corrective measures to make the fund sustainable for members.  But she said the fund was willing to address developers’ concerns, such as drafting alternative measures of proving borrowers’ capacity to pay.

“That’s really a basic principle in lending that you should lend to people with capacity to pay and we’re coming up with a borrowers’ evaluation system as well and talk about factors to be considered and weights to be assigned,” she said.

Despite the introduction of corrective measures, Pag-IBIG’s average monthly loan takeout of about P2 billion at present was still comparable to normal levels, according to Berberabe. She noted that the P4 billion monthly takeout in 2009 was extraordinary because that was the period when loan takeout peaked due to the Globe Asiatique projects.  The 2009 takeout was highest in 30 years but the Globe Asiatique was eventually accused of falsifying documents to make it appear they had ready buyers, a requirement in securing financing from Pag-IBIG.

“The norm is a year like 2007 and comparing to 2007, we’re at par given that we’ve become stricter. So then in my head that’s already an achievement,” she said.

At the same time, Berberabe reported a 38-percent decline in the inventory of residential units catering to the Pag-IBIG’s target market of P3 million and below. Such lack of supply has curbed the volume of loan applications processed by the fund, she said.

When asked how Pag-IBIG has fared in processing loan applications, Berberabe said the ratio has improved to 88 percent in 2011 compared to 83 percent in 2010. “This means that the Pag-IBIG fund has increased its processing in terms of loan received,” she said.

Another measure recently adopted by the Pag-IBIG board to help developers was raising the annual cap on loans that the fund could take out each year from P500 million to P2 billion. “That will give them more flexibility,” she said.

The direction taken by the housing leadership under Vice President Jejomar Binay is to “strike a balance between encouraging housing production by responsible producers and at the same time, not opening opportunities for abuse,” according to Berberabe.

Collaboration among Pag-IBIG, LRA and SHDA is expected to result in action plans to improve mass housing.  These plans will be announced in the SHDA National Convention on Oct. 14 at Dusit Thani Manila.