The government’s Home Guaranty Corp. (HGC) wants its charter amended on grounds that some “outdated” provisions are hampering its ability to help push the government’s housing program, HGC president Gonzalo Bongolan said.
One such provision is that only housing loans worth a maximum of P5 million are eligible for a guarantee by HGC, he said.
“To take into account inflation over the years, HGC must be allowed to guarantee even housing loans worth P10 million,” Bongolan said at a news briefing.
HGC provides guarantee primarily to socialized and low-cost housing loans made by financial institutions, such as the state-run Pag-IBIG Fund.
Bongolan said the term “socialized housing” is defined in the HGC charter as a unit costing a maximum of P150,000.
Real estate players today consider units priced as high as P300,000 as socialized housing.
“Amendments to the charter will help make HGC stronger and more relevant,” Bongolan said.
He said HGC hoped Congress would amend its charter and make that a priority in 2009.
HGC meanwhile plans to sell P5 billion worth of bonds in the second quarter of 2009 to strengthen its capacity to cover loan defaults.
Bongolan said HGC needed to strengthen its finances because of growing demand for housing loans.
He said HGC expected an increase in its guarantee exposure to as much as P83.5 billion worth of home loans next year, up 16 percent from P72.0 billion in 2007.
The last time HGC issued bonds was in 2006, when it raised P8.2 billion.
Bongolan said HGC was waiting for bond market conditions to stabilize, considering accelerating inflation. Michelle V. Remo; edited by INQUIRER.net
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