Lawmakers seek lower housing loan rate

MANILA, Philippines - Two Mindanao congressmen are asking the Housing and Urban Development and Coordinating Council (HUDCC) and Pag-ibig Fund to cut the interest rate on housing loans from six percent to three percent.

In a resolution, Representatives Rufus Rodriguez of Cagayan de Oro City and his brother Maximo, representative of the party-list group Abante Mindanao, said the present six percent rate “has become prohibitive for the poor who are majority of the borrowers of the HUDCC as evidenced by increasing foreclosure figures.”

He said it was Vice President Jejomar Binay himself who has acknowledged that borrowers belonging to poor families could not afford the present rate.

Binay, President Aquino’s housing czar, is chairman of HUDCC and has supervision and control over other housing agencies, including Pag-big Fund, Home Guaranty Corp. (HGC) and the National Housing Authority (NHA).

Citing a statement from the vice president, the Rodriguez brothers said the failure of many HUDCC housing loan borrowers to pay for their loans is one proof that the housing program is a failure.

They said it was Binay who also suggested that the present rate could be reduced to entice more loan applicants and enable existing borrowers to pay for their loans.

They also suggested that the HUDCC and Pag-ibig Fund extend smaller amounts of housing loans.

The present minimum is P400,000.

The Rodriguez brothers said many borrowers in the provinces need less than that amount for home construction or improvement projects.

They said cutting the interest rate by half and extending smaller loans would result in a faster reduction and eventual scrapping of the 3.7-million housing backlog.

They pointed out that adoption of the twin measures could prompt private lenders such as banks and real estate developers to take similar steps to be in competition with government housing and lending agencies.

This could further boost the home construction industry and accelerate the provision of housing units to the homeless, they stressed.

Agencies under Binay have been in the news lately. The vice president has ordered separate inquiries into reported irregularities involving a developer in Pampanga and financial losses incurred by HGC, whose head President Aquino has replaced.

In the case of NHA, the President has temporarily stopped the relocation of squatters occupying its 30-hectare lot in North Triangle, Quezon City, which it has leased to Ayala Land.

The property is bounded by Edsa, North Avenue, Quezon Avenue, and Agham Road. Ayala Land has already built its Trinoma mall there and plans to construct a hotel and other shopping, entertainment and commercial establishments.

Binay and NHA officials hope to soon get the go-signal to proceed with the relocation of the remaining squatters to the NHA relocation site in Rodriguez, Rizal.