Private investments boost housing sector gains
June 24, 2004 | 12:00am
The return of private sector confidence in President Arroyos housing initiatives has resulted in the unprecedented annual inflow of investments perking up prospects for further expansion of the governments housing programs.
Home Guaranty Corp. (HGC) president Gonzalo Benjamin Bongolan said the Arroyo government has been able to sustain the entry of an average of P16.08 billion yearly into the program since 2001.
Bongolan said the record-high investment levels in the housing sector by private financial institutions were triggered by the President Arroyos directive for HGC "to undertake successful efforts at settling guaranty calls and raising fresh capital".
"The housing sector was in a critical state when the President took over (in 2001)," Bongolan said. He pointed out that the confidence of private financial institutions on the housing program was at its lowest as evidenced by some P6.87 billion in guaranty calls on defaulting housing loans and investments.
The governments capability to tap private sector funding for individual and mass housing loans is anchored on HGCs capability to guarantee such loans, Bongolan explained. As such, this capability was seriously impaired due to failed government projects in the late 90s which resulted in massive loan payment defaults and subsequent guaranty calls.
"The situation in the housing sector has been turned around," Bongolan said. A highly-successful issuance of HGC zero-coupon bonds brought in some P4.28 billion to HGC. The proceeds were used to settle guaranty calls, sending important signals to the private sector that the Arroyo administration has the ability to meet its obligations, he explained.
Negotiations with private sector investors also netted some P88.2 million in savings for HGC in 2002 alone. Bongolan said these resulted from agreement by investors for the conversion of guaranty payments from cash to bond coverage, offsetting of premium payments and issuance of long-term debt instruments.
Bongolan said some P5.48 billion in guaranty calls based on deficient housing projects in the 1990s have already been settled. The amount came mostly out of the successful bond issuance and HGC savings.
Consistent with the Presidents policy, Bongolan said bulk of HGCs guarantees cover retail loans for home acquisition. This consists of some 98 percent of HGC guaranty cover and 92.5 percent of which benefits the low-cost housing category, he pointed out.
Bongolan said HGC is optimistic that the renewed private sector confidence on the governments ability to guaranty the housing program obligations "would lead to a further expansion of President Arroyos housing initiatives".
Home Guaranty Corp. (HGC) president Gonzalo Benjamin Bongolan said the Arroyo government has been able to sustain the entry of an average of P16.08 billion yearly into the program since 2001.
Bongolan said the record-high investment levels in the housing sector by private financial institutions were triggered by the President Arroyos directive for HGC "to undertake successful efforts at settling guaranty calls and raising fresh capital".
"The housing sector was in a critical state when the President took over (in 2001)," Bongolan said. He pointed out that the confidence of private financial institutions on the housing program was at its lowest as evidenced by some P6.87 billion in guaranty calls on defaulting housing loans and investments.
The governments capability to tap private sector funding for individual and mass housing loans is anchored on HGCs capability to guarantee such loans, Bongolan explained. As such, this capability was seriously impaired due to failed government projects in the late 90s which resulted in massive loan payment defaults and subsequent guaranty calls.
"The situation in the housing sector has been turned around," Bongolan said. A highly-successful issuance of HGC zero-coupon bonds brought in some P4.28 billion to HGC. The proceeds were used to settle guaranty calls, sending important signals to the private sector that the Arroyo administration has the ability to meet its obligations, he explained.
Negotiations with private sector investors also netted some P88.2 million in savings for HGC in 2002 alone. Bongolan said these resulted from agreement by investors for the conversion of guaranty payments from cash to bond coverage, offsetting of premium payments and issuance of long-term debt instruments.
Bongolan said some P5.48 billion in guaranty calls based on deficient housing projects in the 1990s have already been settled. The amount came mostly out of the successful bond issuance and HGC savings.
Consistent with the Presidents policy, Bongolan said bulk of HGCs guarantees cover retail loans for home acquisition. This consists of some 98 percent of HGC guaranty cover and 92.5 percent of which benefits the low-cost housing category, he pointed out.
Bongolan said HGC is optimistic that the renewed private sector confidence on the governments ability to guaranty the housing program obligations "would lead to a further expansion of President Arroyos housing initiatives".
BrandSpace Articles
<
>
- Latest
- Trending
Trending
Latest
Trending
Latest
Recommended
November 18, 2024 - 12:00am