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Department of Human Settlements and Urban Development (DHSUD) Secretary Eduardo Del Rosario has approved in principle an additional P8-billion stimulus package proposed by the Home Development Mutual Fund or Pag-IBIG Fund to help partner-developers cope-up with the adverse effects of coronavirus disease 2019 (COVID-19).
The Pag-IBIG management recommended to augment the P2-billion House Construction Financing Line (HCFL) with additional P8 billion for a total of P10 billion to serve as “economic stimulus package†for accredited Pag-IBIG Fund developers that need bridge financing.
“This is DHSUD’s commitment of forging stronger ties with our partner-developers and to keep the housing sector vibrant amid these difficult times,†Secretary Del Rosario said.
“We firmly believe that the housing industry is vital in pump priming the economy. By reinvigorating real estate activities, we can immediately trigger the construction supply chain that will benefit millions of Filipino workers and help the national government sustain the efforts to defeat COVID-19,†he added.
Under Pag-IBIG’s HCFL, partner-developers can avail of bridge financing with only 6.125 percent interest rate per annum which could effectively be 1.5 percent or 3 percent only if paid in three months or six months, respectively.
The HCFL will allow partner-developers to draw immediately up to 70 percent of the total project cost. The Pag-IBIG Fund move is very timely as the Inter-Agency Task Force for the Management of Emerging Infectious Disease (IATF) has already allowed the resumption of works in public and private infrastructure projects, including in the housing sector.
Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy Moti said that the additional P8 billion for HCFL was unanimously endorsed by the members of the Board Governance Committee for presentation to the Pag-IBIG Board, chaired by Secretary Del Rosario, soon.
“It’s really a bridge financing. The developers can retain their employees and pay their suppliers,†said Moti, apparently noting the adverse effects of the enhanced community quarantine (ECQ) caused by the COVID-19 to the real estate industry.
“This will greatly help our developers, especially the small- and medium-sized developers, with their cash flows and all. This P10-B economic stimulus plan for the housing sector will be our contribution to the efforts of the National Government to bring the economy back to life. Housing has a high multiplier effect,†he added.
Immediately after President Rodrigo Duterte declared ECQ last March 16, Secretary Del Rosario directed Pag-IBIG Fund and the three other key shelter agencies (KSAs) under DHSUD, namely, the National Housing Authority, the Social Housing Finance Corp., and the National Home Mortgage Finance Corp., to declare a three-month moratorium on payments of loans.
The move benefitted more than 5.5 million member-beneficiaries of the KSAs and resulted in the non-collection of more than P31 billion.
