Pag-IBIG seen keeping loan rates steady in H2

MANILA, Philippines — The Home Development Mutual Fund, commonly known as Pag-IBIG, is expected to maintain its interest rates for home loans for the rest of the year as collection performance is steady. 

In a recent interview, Pag-IBIG CEO Marilene Acosta told The STAR that current interest rates would continue after end-June.

“Chances are, it will be the same. Normally, the huge impact is our collection performance, which we monitor regularly, and so far, it is not going down,” Acosta said. 

Last year, Pag-IBIG posted a record-high performing loan ratio of 93.72 percent, meaning that most Pag-IBIG members diligently pay their home loans. 

Pag-IBIG kept interest rates steady last month, marking the second consecutive year of reduced rates.

“We also consider the market rates because we cannot reduce them. It has to be competitive,” Acosta said.

“We cannot absorb if all the housing loan borrowers will go to Pag-IBIG,” she said. 

If it proceeds, the Pag-IBIG housing loan will still carry an interest of 6.25 percent per year under the three-year repricing period.

Its loan rate under its one-year repricing period will also be unchanged at 5.75 percent per annum.

Its special interest rate for home loans of minimum-wage earners also remains at three percent per annum, the lowest in the market.

In comparison, current home lending rates in the market ranged from 6.82 percent to as high as 8.78 percent.

“We need to balance; after all, we also give it back to our members through the proper dividends. As much as we can, we just maintain it and avoid increasing,” Acosta said. 

Pag-IBIG remains at the forefront of home financing as it accounts for nearly 40 percent of the total home mortgages in the country.

Currently, Pag-IBIG has 16.58 million active members.