MANILA, Philippines - State-run Pag-IBIG Fund is planning to increase the maximum loanable amount for members as part of efforts to meet borrowers’ demands for housing loans.
In a press briefing on Friday, Pag-IBIG vice-president Robert Cosico said the housing agency wants to double the amount to P6 million from the current P3 million.
“There will be changes in the maximum amount that could be borrowed. We’re planning to double it to P6 million and further rationalize the interest rates of Pag-IBIG Fund,” Cosico said.
The idea is for Pag-IBIG Fund’s interest rates on its housing loans to shift to a market- and risk-based system from the current fixed-rate system.
In a separate interview, Cosico said the rationale behind the shift to market-based interest rates is to take advantage of the current low interest rate environment.
If and when interest rates go up, however, Cosico said the housing agency would make sure that the rates slapped on its loans would still be lower than market rates.
Pag-IBIG hopes to implement the increase in the maximum amount for loans this year.
“This is part of our reforms,” Cosico said.
In 2009, Pag-IBIG raised the maximum amount to P3 million from P2 million.
Cosico said demand for loans has been increasing both from middle-income earners and real estate developers despite the global financial crisis.
Pag-IBIG Fund has two million members who are mostly middle-income workers. Of the total membership, overseas Filipino workers account for only 300,000.
To be eligible for the housing loan, a member should be a member for at least 24 months and has remitted at least 24 monthly contributions. He or she should also be 65 years old or younger at the time of the loan application and not be more than 70 years old at the maturity date of the loan.
The borrower must also have no outstanding housing loan from Pag-IBIG and no previous loan that was foreclosed, cancelled or bought back.