The Government Service Insurance System (GSIS) and the Home Development Mutual Fund (more popularly known as Pag-IBIG Fund) today signed a credit facility agreement providing an initial GSIS allocation of Php5 billion to finance the housing loans of its members and pensioners through the Pag-IBIG Fund.
The credit facility, signed by GSIS President and General Manager Robert Vergara and HDMF Chief Executive Officer Darlene Berberabe, is made available in line with the GSIS’s decision to wind down its direct lending program last April in favor of forging partnerships with key shelter agencies (KSAs) which has the proven expertise on home lending.
“We want to synchronize our efforts in the implementation of the government housing program and to avoid duplication with the KSAs’ functions,” said PGM Vergara.
“More importantly, this agreement proves that the pension fund continues to be a vehicle for realizing the homeownership dream of our stakeholders in our role as a partner of Pag-IBIG.”
The lackluster housing performance of the pension fund, which has been implemented since the mid-50s, prompted the current GSIS leadership to find ways to rationalize its home lending program.
In 2010, the GSIS extended only Php600 million in housing loans to its more than 500 members against Pag-IBIG Fund’s Php5.5 billion to over 11,000 government employees, 10 times more what GSIS lent for housing and 20 times more than the number of government employees.
The pension fund chief added that half of the housing loan portfolio of the GSIS or more than 16,000 housing units have either been foreclosed or cancelled.
“It has been a difficult decision for us to stop direct home lending for our members but we are, above all, obligated to them to ensure that their contributions are managed prudently for their greater benefit,” said PGM Vergara.
He added that that he has requested Pag-IBIG to put up a special lane for GSIS members and pensioners to facilitate the processing of their housing loans.
The agreement was signed in the presence of Vice President and concurrent Chairman of the Housing and Urban Development Coordinating Council Jejomar Binay. GSIS Executive Vice President for Finance Sector Benedicto Jose Arcinas and HDMF Deputy Chief Executive Officer for Support Services Cluster Emma Linda B. Faria stood as witnesses to the agreement.