THE Home Development Mutual Fund (Pag-IBIG Fund) is now hoping to finally attain its target of releasing P100 billion in housing loans this year or next year after missing it last year due to the impact of Covid-19-induced lockdowns.
Pag-Ibig Fund CEO Acmad Rizaldy P. Moti said there is no issue hindering Pag-IBIG Fund from financing P100-billion housing loan releases this year.
Moti also pointed out that housing loan releases in January this year have also gone back to prepandemic levels, even exceeding the January housing loan takeout last year.
“So the question is, are we in a position to finance, up to P100-billion housing loan releases this year? The answer to that is yes,” Moti told reporters in a press conference after the 2020 Pag-IBIG Fund Chairman’s Report.
“In fact, even our investible funds our excess funds as of the moment it’s even higher than the level of investible funds, as of the end of 2019, so funding wise, there’s no issue.”
“On the actual demand from our members, we’re very hopeful that our partner developers, as they committed to us they that they will deliver as much as they can deliver this year, so hopefully by the end of the year, or if not this year, definitely by 2022, we should be able to reach that milestone, which is one of the commitments that we gave to our President Rodrigo Roa Duterte,” Moti added.
Pag-IBIG Fund’s home loan releases in 2020 only reached P63.75 billion, plunging by 26.47 percent from a record P86.7 billion in 2019. This was also 36.25-percent below their pre-lockdown target to release P100 billion in home loans by the end of 2020.
If not for the pandemic, Moti reiterated that it was poised to hit the P100-billion housing loan target last year.
In 2020, Pag-IBIG Fund’s home-loan releases dipped to P3.8 billion in March and P883 million in April; recovering in May when disbursements jumped to P1.2 billion and rose even higher to P2.9 billion in June as government began to ease mobility restrictions. By the end of the third quarter, Pag-Ibig Fund said home-loan releases had already recovered.
Del Rosario report
In his report on Wednesday, Pag-IBIG Fund Board Chairman and Department of Human Settlements and Urban Development (DHSUD) Secretary Eduardo D. Del Rosario also announced that they have approved to declare 93.68 percent of its earnings—exceeding the minimum 70 percent requirement under its charter and the highest in the agency’s history—in a bid to aid its members amid the pandemic.
Based on its unaudited financial statement, Pag-IBIG Fund’s net income slid to P31.18 billion last year from P34.37 billion in 2019.
Of the P31.18-billion net income by Pag-IBIG Fund in 2020, Del Rosario said they are giving back P29.40 billion to members in the form of dividends.
With this, Del Rosario said members will enjoy a higher-than-expected return on their Pag-IBIG savings. He said that the year 2020 dividend rate for the Pag-IBIG Regular Savings shall be at 5.62 percent, while the Modified Pag-IBIG 2 (MP2) Savings shall be at 6.12 percent.
Under Pag-IBIG Fund’s charter, the agency is required to declare at least 70 percent of its annual net income as dividends, which shall be credited proportionately to its members’ savings.
For his part, Moti also assured the public that this dividend approval by the board will not imperil the strong financial standing of Pag-IBIG Fund.
“It’s also the highest dividend payout ratio our Pag-IBIG Fund Board can declare while still maintaining our target Capital Adequacy Ratio. Considering the challenges that we faced last year, achieving over P31 billion in net income is an achievement in itself,” Moti said.
“According to Moti, Pag-IBIG Fund maintains a Capital Adequacy Ratio (CAR) of 15 percent, which is higher than the 10-percent threshold set by the Bangko Sentral ng Pilipinas (BSP) for the banking industry. Even if Pag-IBIG is not regulated by the BSP, Moti said that the agency voluntarily maintains a high CAR which includes a buffer to account for current economic challenges, to protect the funds of its members and to maintain the agency’s financial stability.”
Moti also thanked borrowers for paying their loans last year, despite the economic slowdown. In 2020, home loan payments reached P46.65 billion, while cash loan payments totaled P56.17 billion enabling the agency maintain its strong fiscal position.
“The strong financial standing of Pag-IBIG is a good sign because this allows us to continue funding our members’ home loans and cash loans, especially now when these are needed the most. By fulfilling their obligations, they are helping Pag-IBIG Fund bring needed service to other members, while continuing to stimulate the housing industry and the economy,” he said.