GMA orders government banks to cut rates on housing loans

President Arroyo has ordered state-owned banks to cut their lending rates for low and medium cost housing by three percentage points to six percent, her spokesman said yesterday.

"The President has ordered government financial institutions involved in the housing program to cap their interest rate at six percent for low and medium cost housing," Bunye said.

The banks now charge nine percent annually, including service charges, for low-cost housing loans, he added.

Government-sponsored housing for the poor is one of eight centerpiece projects identified by Arroyo for her remaining 18 months in office after declaring last month that she would not contest the 2004 presidential election.

Meanwhile, housing loans for land tenure and housing acquisition by the urban poor informal settlers under the government’s Community Mortgage Program are expected to hit the P426-million mark in 2002 with some P391 million already released during the last 11 months.

This was announced by Angelico T. Salud, president of the National Home Mortgage Finance (NHMFC), an agency of the Housing and Urban Development Coordinating Council (HUDCC) tasked to administer the home financing program.

In a report to Housing Secretary Michael T. Defensor and concurrent HUDCC chairman, Salud said that the loan performance level has exceeded the P300-million subsidy the national government has released this year for lending to the homeless urban poor.

The 11-month loan releases, which financed a total of 80 urban poor housing sites nationwide for some 10,007 family-beneficiaries, have exceeded by 58 percent the average annual loan releases of P246 million during the 15 years of implementation of the Commmunity Mortgage Program, Salud cited.

Cumulative loan releases as of November have reached P3.7 billion which financed a total of 1,001 housing sites for a corresponding 124,918 family-beneficiaries.

NHMFC, which celebrated its 23rd anniversary last Dec. 21, will continue to pursue the Community Mortgage Program next year as one of its flagship programs, an integral part of the anti-poverty intervention of the administration of President Gloria Macapagal-Arroyo, Salud pointed out.

The program has received assurance from President Arroyo of continuing funding support from the national government, he added.