Pag-IBIG debtors good clients

Our portfolio is unique in the sense that we cater to minimum wage earners who are usually unserved by most lending institutions because of their financial situation.

State-run housing fund Pag-IBIG’s kiosk is busy processing contributions and loan payments as more Filipinos rely on the agency to acquire their first home.

Small wage earners, which commercial banks avoid and are considered as high-risk borrowers, are actually diligent clients, based on the experience of the Pag-IBIG or Home Mutual Development Fund where nine of 10 borrowers religiously pay their housing arrears.

Pag-IBIG Fund chief executive officer Acmad Rizaldy Moti said the ratio is already comparable to financial institutions, considering that Pag-IBIG has 90 percent performing loans in its portfolio, if based on industry standard in which delinquent payments for three months are considered non-performing.

Moti during the recent “Straight Talk with Daily Tribune” said Pag-IBIG Fund does not follow the non-performing loan standard among commercial banks since many delinquent accounts are the result of forgetfulness.

Many overdue borrowers only need to be reminded and resume payment after being notified, he said.

“Our portfolio is unique in the sense that we cater to minimum wage earners who are usually unserved by most lending institutions because of their financial situation,” according to Moti.

He said despite having low-income earners as clients, “We are happy to report that our efforts to maintain efficiency of collections enabled us to keep our performing loans ratio (PLR) at above 90 percent.”

The high PLR showed nine of 10 of home loan borrowers regularly pay their monthly amortizations, which is a vast improvement compared to previous years, the Pag-IBIG official noted.

He attributed the improvement to reforms initiated and “the growing appreciation of the Fund’s home loan programs among borrowers.”

The regular payment of monthly amortizations is key in the Fund’s mission to provide both accessible and sustainable home financing to members who need it most, he indicated.

Thus, Pag-IBIG is racking up record-breaking financial performances as a result of its highly efficient collections.

“We were able to sustain our momentum from 2018, which was our best year yet. In the first half, home loan payments averaged P5.07 billion per month which is considerably higher than the P4.53 billion average last year,” Moti noted.

He said 2019 marked a good start for Pag-IBIG. “While we experienced slumps in the start of previous years, home loan payments in January amounted to P5.4 billion. And in May, home loan payments totaled P5.99 billion — the highest so far this year,” he noted.

Some banks which realized that mass housing is a viable business now complain about the low rates that Pag-IBIG offers on its loans.

“We tell banks that we are committed to this administration, to President Rodrigo Roa Duterte, that we will make the rates low and we have done that,” he said.

“Workers earning P15,000 a month or lower in Metro Manila or P12,000 if they are working outside Manila are imposed interest on their socialized housing loan at a subsidized three percent,” Moti explained.

The subsidized rate should be supported. Former President Ramon Magsaysay said that those who have less in life will have more in law, he indicated.

“Robust collections reinforce Pag-IBIG Fund’s financial sustainability since the amount collected is always plowed back to the housing portfolio so that more members can avail of a home loan,” he added.

As of June, Pag-IBIG’s PLR stood at 90.6 percent, the highest in history. In 2012, the Fund’s PLR stood at a low 75 percent.

The Fund improved its portfolio over the years until it reached 90 percent for the first time in 2017. The PLR further improved to 90.23 percent in 2018.

He said foreclosing properties is also not a painful process compared to the practice of banks.

“The first thing we do is write the delinquent member a letter and check if the property is occupied or not,” according to Moti.

He said for an occupied property, Pag-IBIG will write the occupant who would be told that the property is up for auction.

“We tell the occupant if they are interested to buy it, they should pay us a visit within 15 days,” he said.

“Frequently, the original owner would get incensed and would ask Pag-IBIG why the property is being offered to the tenant,” the Pag-IBIG chief said.

“We will be told that they have a certain deal being negotiated at a higher price than what we have offered,” Moti indicated.

“We will tell the person complaining that the owner of the property is Pag-IBIG Fund. The tenant, in turn, can borrow from Pag-IBIG for a 30-year loan to own the property,” he said.

Otherwise, repossessed properties are auctioned off. “If there’s no buyer in the first auction, we offer discounts in the second auction,” Moti underscored.

Meanwhile, he clarified a portion of his statement that appeared last Wednesday in the Daily Tribune in which he was quoted as saying that “on the (loan) disposal, they need to become members and they should continue paying,” and that members of the “other earning, working group” account for 80 percent of the Pag-IBIG Fund loan disposals.

What he actually meant was that “on the sale or disposal of real and other properties acquired, they need to become members and they should continue paying,” and that members from Pag-IBIG Fund’s other working groups account for 80 percent of the agency’s sale or disposal of its ROPA.”