VP de Castro predicts housing loan interest-rates cut will prime the sector

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Wednesday, 04 February 2009 17:53

HERE’S good news for those paying monthly amortization under the government’s housing program. Vice President Noli de Castro announced on Wednesday a reduction in interest rates for the monthly amortizations of Pag-IBIG housing loan packages to make it more affordable to the people. For loans reaching P400,000, the interest rate for loans has been reduced from 7 percent to only 6 percent per annum. Meanwhile, borrowers who have loans over P400,000 up to P750,000 will pay 7-percent interest and borrowers with loans over P750,000 up to P2 million, 10.5 percent. On a monthly basis, the payment for principal and interest for a P400,000 loan will be reduced from P2,661.21 to P2,398.20 at the maximum payment period of 30 years. De Castro said the bulk of housing loans taken out by Pag-IBIG are those worth P400,000 and under. “The market for Pag-IBIG loans are mostly the low-income earners, so this latest interest-rate adjustment will benefit them,” he said. “In these difficult times, we want more Pag-IBIG members to have home ownership as an affordable option to renting,” he added. De Castro added the rate reduction complements the fund’s commitment to allocate P82 billion for housing and multipurpose loans this year as its contribution to priming the economy. “With this, we hope to attract more borrowers. This will help keep the housing market vibrant, generate business activity in related industries and create much-needed jobs for our workers,” he said. To accommodate more applicants, de Castro ordered the Pag-IBIG Fund to review its housing loan-application process and find ways to further streamline it. De Castro also assured members that Pag-IBIG will continue to invest at least 70 percent of its investible funds in housing even with the fund’s charter change. This is in reference to the recently approved Senate bill that aims to strengthen the Pag-IBIG Fund by amending its charter to restore its exemption from income taxes and to empower its board of trustees to adjust contribution rates, among other things. “Housing will continue to be Pag-IBIG’s core service to its members, and its main contribution to our country’s economic growth,” he said. Rizal Raoul Reyes