Pag-Ibig Fund seeks change of its charter Amendment needed to raise more funds

Home Development Mutual Fund more popularly known as Pag-Ibig Fund hopes that Congress would allow it to change its charter to be able to continuously provide funds to the membership.

During the recent National Developers Convention and Exhibition held in Cebu, HDMF president and CEO Atty. Romero Federico Quimbo presented their strategies for sustainability to members of the Subdivision and Housing Developers Association (SHDA) and other representatives of the country’s housing organization.

Quimbo noted the positive performance of Pag-Ibig in terms of granting loans and keeping interest rates at the minimum in support of the government’s effort to make housing available to more Filipinos.

Currently, for a P300, 000 housing loan package Pag-Ibig charges a six percent interest per annum which was at 12 percent back in 2001.

The P750, 000 loan package currently has seven percent interest rate which was at 14 percent before while for P2 million housing package, there is currently 10.5 percent interest rate which was formerly at 14 percent last 2001.

Quimbo reported that on take outs, their top 20 developers in NCR have accumulated P270 million in 2001 with 385 accounts whereas compared to this year, they have accumulative take- outs worth P5.76 billion for 10,902 accounts.

He said that Pag-Ibig’s lending share among government financing institutions (GFIs) as of December 2007 is 85 percent while Social Security System (SSS) only has four percent and Government Service Insurance System (GSIS) has 11 percent share.

But while other GFIs has increased its contribution rates; Pag-Ibig’s membership contributions has remained the same for the last 22 years which is at P200 monthly, said Quimbo.

“Our disadvantage is that there is disparity in contribution rates and premium but we have shouldered the housing requirements of the economy and we even continue to pay taxes while other GFIs have already been exempted,” Quimbo pointed out.

He added that to improve their collections, they have gone to aggressively increase their membership and with this they have opened a lot of offices to reach out to more members.

“We need to make our funds sustainable so we have to do strategies that can improve our collections such as bringing Pag-Ibig closer to members. But our challenge really is to have a new charter so we can easily adjust our contributions,” he said.

He said that if Pag-Ibig gets a new charter, they will ask for a minor increase of about P50 to P100 in their contributions which can bring in around P16.5 billion fresh funds to the institution that can sustain the growing demand for housing in the country.

“Next year will be critical for us as we are very challenged with our cash inflows now so we need the support of everybody to make funding viable. We have to wipe out deficiency in our cash inflows and without increased contribution, Mutual Fund will be problematic in the coming years,” he stressed.

Right now, Pag-Ibig’s new charter resolution is already pending in Congress but it hasn’t had a single hearing yet.