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LOW income earners like government office clerks, utility workers and security guards were given wider access to housing loans of Pag-IBIG after Vice President and Housing and Urban Development Coordinating Council (HUDCC) concurrent chairman Noli ‘Kabayan’ De Castro ordered the shelter agency to lower its interest rates.

The Pag-IBIG Fund Board of Trustees chaired by De Castro made the adjustment on the interest rate structure of the Fund so that even teachers and policemen belonging to the lowest grade can avail of the housing loans and become homeowners.

“I believe this is our answer to our efforts to address the issue of homelessness in the formal sector,” De Castro said.

“For me, this is the best time to give Pag-IBIG members the opportunity to become homeowners,” he added.

Loan packages up to P300,000, viewed as the most affordable for minimum wage earners or those earning P7,700 a month,  will now have an interest rate of only 6 percent, down from the old rate of 9 percent. While the interest rate for loans over P300,000 up to P500,000 has been lowered to only 7 percent from 10 percent.

De Castro explained the interest rates of housing loans over P300,000 are fixed for five years. While those below P300,000 will be re-priced every five years only if the market rates are going down. “Hindi na ito tataas pa sa six percent”, De Castro pointed out.

For loans over P500,000 to P1 million, the package for teachers and policemen,  the old interest rate of 11 percent was decreased to 10.5 percent, and interest on loans over P1 million  up to the maximum of P2 million was lowered from 12 percent to 11.5 percent.

All housing loan packages will now have a maximum term of 30 years. Under the old guidelines loans over P750,000 up to P2 million had a maximum payment period of only 20 years.

Likewise, monthly amortizations on loans valued at P300,000 will be reduced to P1,798.65 from  P2,413.87. For the P500,000 loan package, the monthly amortization will decrease from P4,387.86 to only P3,326.

“These monthly payments are far lower than the average rental in an apartment which can range from P7,000 up to P10,000,” De Castro said.

De Castro said he is not compromising the viability of Pag-IBIG with the implementation of the new interest rates. ”In fact, with Pag-IBIG’s strong financial performance in recent years, I look at it as an opportunity to make the Fund more competitive,” he added.

Because of the efforts and good work put in by management, De Castro said the Pag-IBIG Fund could  in fact be the most stable government institution in the country.