Pag-IBIG cuts interest rates for housing loans

MANILA, Philippines — The Home Development Mutual Fund, commonly known as Pag-IBIG, has reduced the interest rates for its home loans amid an improved financial standing and to address the country’s housing backlog.

In a statement, Pag-IBIG said it is making home financing more affordable and accessible by slashing interest rates on its housing loan depending on the repricing period.

Under the new rates, the Pag-IBIG housing loan now carries an interest of 6.25 percent per year under the three-year repricing period from the previous 6.375 percent.

Rates for the longer repricing period have also been cut to 6.5 percent for the five-year, 7.125 percent for the 10 year, and 7.75 percent for the 15-year.

Likewise, Pag-IBIG reduced the interest of the 20, 25 and 30-year repricing periods to 8.5 percent, 9.125 percent, and 9.75 percent, respectively.

On the other hand, Pag-IBIG’s loan rate under its one-year repricing period is unchanged at 5.75 percent per annum.

Its special interest rate for home loans of minimum-wage earners also remains at three percent per annum, the lowest in the market.

Pag-IBIG CEO Marilene Acosta said the decision to cut interest rates is due to the agency’s strong fiscal standing, record-high collections and high performing loans ratio.

“With our performing loans ratio at a high 92.53 percent and collections from both membership savings and loan payments at a record-high, we are able to effectively fund the high demand for our home loans without the need to borrow from the market,” Acosta said.

“As a result, we were able to reduce the interest rates on our housing loan, despite the upward market trend,” she said.

Housing chief and Pag-IBIG Board of Trustees head Jose Rizalino Acuzar, for his part, said the latest move aims to make homeownership more attainable for Filipinos.

Acuzar added that this is in line with the flagship housing program of the Marcos administration that targets to cut the backlog in the country.

Over the next six years, Pag-IBIG intends to finance at least 708,000 housing units.

Pag-IBIG has 15.4 million active members and has over P800 billion in total assets which is expected to reach P1.5 trillion by 2028.