Pag-IBIG to extend low interest rate for home loans

MANILA, Philippines, April 7 ------ The Home Development Mutual Fund, commonly known as Pag-IBIG, is extending its low interest rates for home loans until end-June amid an improved financial standing and to address the country’s housing backlog. 

In a statement, Pag-IBIG Fund said it kept interest rates steady until June, marking the second consecutive year of reduced rates. As such, the Pag-IBIG housing loan still carries an interest of 6.25 percent per year under the three-year repricing period. Its loan rate under its one-year repricing period is also 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 range from 6.82 percent to as high as 8.78 percent. 

Pag-IBIG CEO Marilene Acosta said the decision to maintain interest rates is due to the agency’s robust fiscal management, operational efficiencies, improved performing loans ratio and increased collection of loan payments. “We posted a record-high performing loans ratio of 93.72 percent last year, which means most of our members are diligently paying their home loans,” Acosta said. “This, combined with the quality of our investment portfolio, allows us to finance housing loans without the need to borrow externally, which in turn insulates our members from rising market interest rates,” she said. 

Further, Pag-IBIG housing loans offer members financial benefits, as interest rates remain lower than the dividends earned on their savings. Currently, Pag-IBIG has over 16 million active members. 

Source: philstar.com