From financing to production
MANILA, Philippines — The Home Development Mutual Fund, widely recognized as Pag-IBIG, plans to expand its operations from just providing funds. It aims to venture into home construction through various collaborations due to the declining availability of socialized housing units.
During the side event of the Kapihan with Pag-IBIG yesterday, Pag-IBIG Deputy CEO Benjamin Felix mentioned that the organization will, for the first time, enter the production sector to help address the shortage of socialized housing units.
This move would enable Pag-IBIG to meet its objective of disbursing PHP 156.86 billion in home loans for this year, which corresponds to approximately 111,648 residential properties.
As of end-May, Pag-IBIG has released P49.48 billion, just a little over 30 percent of the full-year goal.
“Almost one-third of our loan take-out is socialized, but right now, no one is producing. That is why we are trying to partner with developer contractors to produce socialized housing to augment supply,” Felix told The STAR.
"We aim to establish subsidiaries and joint ventures, not only with housing agencies but also with private contractors. Previously, our role was mainly financing, but now we plan to become producers," he stated.
Currently, Pag-IBIG has initiated a memorandum of understanding with both the National Housing Authority and the Social Housing Finance Corporation.
On her end, Pag-IBIG CEO Marilene Acosta continues to remain optimistic that they will meet their objective by 2025. In the previous year, Pag-IBIG came up slightly short with home loans, reaching only PHP 130 billion against an intended goal of PHP 143 billion.
Acosta is counting on the statements from the newly appointed housing chief Jose Ramon Aliling to bring about an "enhanced and broadened" Pambansang Pabahay para sa Pilipino (4PH) initiative, emphasizing a fresh push for residential projects spread out over land.
Earlier, Aliling mentioned that the 4PH initiative would be enhanced and expanded to incorporate additional formats, specifically vertical ventures like townhouses along with standalone housing units.
"developers have likewise pledged to vigorously pursue their socialized housing initiatives and other projects," Acosta informed The STAR.
She mentioned that in the last three years, the construction of socially funded houses has experienced a decline in progress.
Through Pag-IBIG's Affordable Housing Initiative, qualified applicants can benefit from a reduced interest rate of 3% annually for housing loans totaling up to ₱850,000 specifically aimed at socialized subdivision schemes.
If hitting the target of P157 billion is our only aim, we could indeed raise our loan amount from P10 to P20 million," Acosta stated. "However, this wouldn’t address the genuine issue of aiding those who truly require support.
Currently, the highest loan amount that Pag-IBIG can provide stands at ₱6 million. The organization continues to lead in housing finance, responsible for about 40 percent of all residential mortgages nationwide.
At present, Pag-IBIG counts 16.58 million active members.