VP Noli lowers Pag-IBIG housing loan interest rates

OVP/ PNS — For the second time this year the Pag-IBIG Fund Board of Trustees, chaired by Vice President Noli “Kabayan” de Castro, lowered the interest rates on the government-run institution’s housing loan packages, making these even more affordable to members in the lower income brackets.

Loan packages up to P300,000 will now have an interest rate of 6%, down from the old rate of 9%, while the interest rate for loans over P300,000 up to P500,000 will be lowered from 10% to only 7%.

For loans over P500,000 to P1 million, the old interest rate of 11% will be decreased to 10.5%, and interest on loans over P1 million up to the maximum of P2 million will be lowered from 12% to 11.5%.

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.

“This is our early Christmas gift to the minimum wage earners and government workers,” the Vice President said, emphasizing that the biggest effect of the new interest rates will be on housing loan packages valued up to P500,000.

The new rates for loans up to P300,000 will benefit minimum wage earners, or those earning P7,700 a month, as well as government employees classified under Clerk III and Utility Worker. For P500,000 loans, employees classified as Teacher I and Police Officer I as well as security guards are the target beneficiaries.

Under the new interest rates, 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.

This latest reform in the Pag-IBIG Fund housing loan program is the result of De Castro’s personal instruction to the Fund’s management early in October to review the interest rate structure “with the end in view of reducing it to provide even wider access to the segment of the formal sector not catered to by the banks.”

“This dovetails with President Arroyo’s emphasis on the need to extend non-cash benefits to our workers in the government and private sector, so that the economic gains we have achieved in the past months will trickle down,” he said.

The Vice President acknowledged the Pag-IBIG Fund’s strong financial performance in recent years for making the interest rate adjustments possible.

“We know that Pag-IBIG will be able to implement this new interest rate structure without compromising its viability because it is very financially stable, thanks to the outstanding and unprecedented growth over the past years through the good work put in by the management,” he said.

“This is the best time to translate these gains into services that would give our members the best opportunity to become homeowners,” he added.