MANILA, Philippines -- Members of the Government Service Insurance System are better off borrowing their housing funds from key shelter agencies like the Pag-IBIG Fund, considering that the latter generally offers less interest.
Robert G. Vergara, GSIS president and general manager, made this suggestion in an interview on Wednesday, saying that the pension fund has committed to continue making housing funds to members -- but through a third party like the Pag-IBIG fund.
?We are still in talks with Pag-IBIG,? Vergara said. ?The Social Security System has done this before and GSIS is just following that example.?
He added that a GSIS member would not be left without any alternative because of agencies like the Pag-IBIG, whose core competency has been to provide shelter financing.
Even then, the GSIS chief said the pension fund would be ready to provide its members an initial P5 billion for housing funds, especially if a system could be worked out with Pag-IBIG.
?This [amount] can increase depending on the demand,? Vergara said.
A comparison based on a loan package of between P500,000 and P700,000 ? which is the most availed of among government employees ?GSIS financing costs 8 percent while a Pag-IBIG loan carries an interest of 7.5 percent.
GSIS lent P1 billion in 2010 through its housing program while Pag-IBIG lent P22.7 billion in the first half of that year alone.
?GSIS has been lending for members? housing needs since 1954, many years before Pag-Ibig existed,? he said.
?It?s not that GSIS members are left without alternatives,? he added. ?GSIS is willing to partner with other agencies under the Housing and Urban Development Coordinating Council like the National Home Mortgage Finance Corp. and the Home Guaranty Corp.?
Vergara said GSIS still had to collect P26 billion in housing loans, which represented about 12 percent of total loans extended or about 5 percent of total assets.
He said GSIS assets have been valued at about P580 billion as of end-March, including some P195 billion in total loans.
Further, Vergara said the GSIS did not suspend its housing loan program effective April 28 because it was short of cash.
?We had P46 billion in cash as of the end of 2010,? he said. ?We expect this to rise to P50 billion? in 2011.?