PAG-IBIG Fund Davao branch bankrolled the building of 3,797 housing units in Southern Mindanao to the tune of P1.4 billion from January to November 2007.
Annualized, the figures meant a 116-percent performance of the Fund’s Southern Mindanao Group for housing services against target of P1.258 billion.
Jose W. Banzon Jr., the fund’s vice president for southern and central Mindanao operations, told business editors and reporters that homebuyers from the other parts of Mindanao, mostly parents of college students, opted to locate their second homes in Davao City for practical reasons.
Top performer is Davao City (which includes Davao del Sur area) with 2,079 units valued at P957,175,000, followed General Santos City with 795 units costing P265,317,000.
Tagum (including Davao Oriental and Compostela Valley Provinces) had 715 units worth P165,598,000 and Cotabato (including Maguindanao, North Cotabato, Sultan Kudarat and Cotabato City) had 208 worth P66,664,000.
Lower interest rates
Banzon attributed the increase in housing availment to their new scheme where interest rates were brought down making housing units affordable to homebuyers.
Starting October, rates on housing loans are:
6 percent (from 9 percent) for loans amounting to P300,000;
7 percent (from 10 percent) for loans of from P300,000 to P750,000; and
10.5 percent from 11-12 percent for loan of up to P2 million.
For a P300,000 house and lot package one would only get an interest rate of six percent or an amortization of about P1,800 a month. Before the same package was charged nine percent interest rate and the monthly amortization of P2,700.
He however observed that the new homebuyers in Davao City are mostly out-of-town families sending their children to colleges and universities here.
“I think this is the wisest decision they make because it is more advantageous nowadays to buy one than rent a house where the amortization is much lower than renting a house,” he said.
No housing boom yet
Banzon said their housing performance as of November last year was their biggest although he said that they could not say for certain whether there is a boom in the real property.
Housing, he said follows a five-year cycle and in order to check whether there is a steady rise in the demand, the entire cycle has to be looked at.
Banzon bared that for the year 2008, his unit is targeting the delivery of 5,593 housing units with an increased loan portfolio of P1,856,556,000.
He said the Southern Mindanao Group needs to work hard on the target even as he thanked housing developers for the role that they played in the agency’s performance in the year just ended.
He said that the developers availed themselves of the Fund’s development loan with high repayment rate of 97 percent.
Gross revenue and NIBT
Based on available January to September figures, Banzon said the SM Group projects an end-of-2007 gross income of P956.7 million, consisting of P299.1 million from multi-purpose loans, P532.7 million from housing loans, P22.5 million from institutional loans, P85.4 million from other housing related incomes and P16.9 million from fund management.
Minus projected operating and other expenses (including depreciation, loan loss provision, interest expense,
foreclosure expenses, acquired asset management costs and death benefit), Banzon said the Southern Mindanao Group which he heads expects a net income before tax (NIBT) of P565 million.
He said Pag-IBIG is not among government owned and controlled corporations (GOCCs) exempted from tax.
Banzon said the SM Group now has total assests of more than P11 billion, consisting of net of due from accounts.
He said members’ equity now stands at P7.7 billion.