Pag-IBIG Fund to issue P12B bonds next month

Home Development Mutual Fund, more popularly known as Pag-IBIG Fund, will raise P12 billion next month from the sale of bonds to pay its maturing obligations in May 2010. The Securities and Exchange Commission (SEC) exempted the government-owned and –controlled corporation (GOCC) from registration requirements since the bonds are guaranteed by the government. The Bureau of the Treasury is the facility agent and registrar of the five-year debt offering in October. The Pag-IBIG Fund has to pay off P7 billion in debts. In 2009, it has earmarked 19 percent more in loans at P84.5 billion from P71 billion last year. Half of the loan programmed will be used for housing loans at P43 billion. “The demand for loans has been increasing both from middle-income earners and real estate developers despite the global financial crisis," the biggest financier of housing loans said. With over two million members, the Pag-IBIG Fund offers housing loans of P400,000 to P750,000 with interest rates of 6 percent to 7 percent. In a Senate hearing last month, chief executive officer Jaime A. Fabiaña said housing loan disbursements would likely exceed P45 billion this year, up by 32.35 percent from P34 billion the previous year on aggressive marketing and advertising campaign. The Pag-IBIG Fund spent P172 million to advertise its new housing loan program but he said this resulted to P78-billion housing loan approvals from 2007 to June 2009. He said the ad spending was “very conservative," as it represented only around one-fifth of one percent measured in terms of the total housing loan approvals. The Pag-IBIG Fund started to aggressively advertise its new housing loan program in December 2007 with Vice President Noli de Castro as endorser. Fabiana said Pag-IBIG started to reduce its housing interest rate to as low as six percent in early 2006 but actual loan disbursements “fell short" of target for the year. -GMANews.TV