VICE President and Chairman of the Housing and Urban Development Coordinating Council (HUDCC) Noli “Kabayan” De Castro today informed that the Home Development Mutual Fund, or Pag-IBIG Fund, has set record-breaking figures in benefits granted to its more than seven million members last year.

Under its short-term loan programs covering multi-purpose and calamity, provident claims as well as death benefits, the Fund extended an unparalleled P49 billion from January to December 2009, up by 48% from P33 billion in 2008.  In calamity lending alone, Pag-IBIG has disbursed P14.8 billion serving more than 869,000 typhoon-stricken members from January to December 2009, making the agency the biggest calamity loan provider in the country. 

It has also released P30 billion in multi-purpose loans benefiting 1.7 million members. “This shows that Pag-IBIG continues to provide a singular lifeline to its members and is filling a big financing gap for Filipino workers—with many of its members turning to the Fund to pay for tuition fees, hospital bills, appliance purchases, minor home repairs, and for small business capital,” De Castro said.

Last year, Pag-IBIG extended P45.7 billion worth of housing loans to over 74,000 members, the highest total loan amount and the biggest number of borrowers for a single year in the Fund’s entire history.  This, despite the global financial crisis which affected the country in 2009.  The Fund has similarly lent  P4.3 billion to private developers which helped finance the construction of 90 housing projects.

Pag-IBIG attributed the robust Fund performance to the efficient administration of members’ contributions and implementation of dramatic reforms initiated by De Castro and the Pag-IBIG Fund Board of Trustees, which allowed members easy access to its loan facilities.

“Upon the direction of our Chairman and our Board, we adjusted our housing loan interest rates five timesfrom 2006 to April 2009, resulting in lower interest rates. The biggest cuts were in the lower loan packages targeting minimum wage earners up to middle-income workers. Today, Pag-IBIG offers the lowest interest rates in the market: 6% for loans up to P400,000, 7% for loans above P400,000 to P750,000, and 8.5% for loans over P750,000 to P1 million.  The new interest rates will translate to savings for Pag-IBIG borrowers in the P400,000 housing loan package.  The monthly amortization for 30 years goes down from P2,661.21 under the old rate, to only P2,398.00,” Jaime Fabiaña, chief executive officer explained.

He pointed out that as a result of these reforms, more and more Filipino families are realizing “they need not wait for higher salaries, or turn to overseas employment, to be able to afford a home.” 

Pag-IBIG continues to post increases in its net income as well, ending 2009 with an income level of P12.6 billion, the highest in the Fund’s history.  With its increasing income, the members have been receiving a bigger share in the form of dividends credited to their Pag-IBIG savings. Back in 2004, the Fund declared total dividends of P4.8 billion. In 2008, the Fund paid out higher dividends amounting to P7.1 billion, representing an increase of 14% compared to the P6.2 billion level in 2007.
 Its consistently solid performance has also led to accelerated growth in its asset base.  Total assets in 2004 were recorded at P163.6 billion. By December 2009, it jumped to P255.6 billion.

This was achieved despite the fact that the Pag-IBIG contribution rate has remained unchanged since 1986, while it has significantly increased the amount of assistance that members may avail of under its benefit programs.