Reacting to concerns raised by housing developers, the top official of the Home Development Mutual Fund, popularly known as Pag-Ibig Fund, said that changes were necessary to ensure the fund’s continued viability and delivery of services to its 9.5 million members worldwide.
“As a state financial institution, it is our duty as administrators of the Fund to make sure that our policies, practices and services redound to the greater benefit of our members.
We can only do that if these policies can guarantee the continued viability of the Fund. After all, the moneys that Pag-Ibig Fund lends out are the hard-earned savings of the Filipino workers wherever they are,” HDMF chief Darlene B. Berberabe said.
In the aftermath of the Globe Asiatique controversy, Pag-Ibig Fund has instituted reforms in its housing loan programs, particularly under its Window 1 lending facility. These include the termination of the authority previously granted to developers to approve the Pag-Ibig housing loan applications of their buyers. All housing loan applications are now screened and approved by Pag-Ibig Fund itself.
Property developers attributed the lower housing loan take-outs of Pag-Ibig for this year to this change, including the increase in housing loan denials, as compared to the figures from 2008 and 2009.
Take-outs processed under the Window 1 mechanism accounts for about half of the institution’s end-user home loans. There are more than 200 developers accredited under Pag-Ibig’s Window 1 facility.
“We have to learn from our experiences in the past. As a funder, originating loans is our responsibility, so taking it back on is just right. Passing it on to the developers may have been expedient but constituted a conflict of interest which is prone to abuse. In numerous consultations with developers, they themselves also recognize this problem. So, we took steps to address that. Our legal mandate is to extend loans to borrowers taking into account their capacity to pay. That is what we are doing,” Berberabe said.
She said the upsurge in Pag-Ibig housing loans in 2008 and 2009 was brought about by a combination of Pag-Ibig Fund’s reduction in interest rates, increase in loan amounts, the lengthening of the loan terms, as well as the heavy advertising undertaken by the fund to market those changes.