MANILA, Philippines - The National Home Mortgage Finance Corp. (NHMFC) is eyeing to sell P2.2 billion worth of five-year bonds to help refinance existing debts, its top official said in a housing summit last week.
NHMFC president Joseph Sison said the proceeds of the bond sale would be used to pay funders such as the Social Security System (SSS) and the Home Development Mutual Fund, more commonly known as the Pag-ibig Fund.
“This is really part of our mandate. We should have done this a long time ago,” said Sison.
NHMFC is a government home mortgage institution tasked to purchases mortgages originated by both public and private institutions. Its initial main function is to operate a viable secondary home mortgage market, utilizing long-term funds principally provided by the SSS, HDMF and the Government Service Insurance System. It is chaired by Vice President Noli de Castro.
The agency launched the bond float this month and is currently conducting a roadshow for the fund-raising activity.
Sison said the rate would be pegged with the government’s five-year benchmark bond but NHMFC expects to sell it at a rate of 6.8 to 8 percent to make it more attractive.
As for other plans this year, Sison said the agency is planning to use part of its 2009 budget of P500 million to buy more low-risk mortgages from banks, property developers, insurance firms etc. and turn them into securities also.
Sison is optimistic of the housing market this year, saying that the Philippine housing industry is different from that of the US.
The credit crunch in the US home mortgage market triggered a worldwide financial turmoil which has reverberated beyond American shores.
However, Sison does not see a massive housing payment defaults just like what happened in the United States because bulk of the mortgages are for low-cost housing which have low monthly amortization.