The Home Development Mutual Fund, more popularly known as Pag-ibig Fund, reported that its core income for the first semester of the year was about 20% higher on year-on-year basis and the value, P16.09 billion, was 102% higher than target.
“We would expect a total net income by end of the year of around P31 to32 Billion,” said Moti in a press conference yesterday, as the fund is set to breach the P30 billion income mark for the first time if the target is achieved.
Moti explained that the high income was not affected by the move of the fund to make its borrowing windows more affordable as what was committed by President Rodrigo Duterte.
At present, loans imposed by the fund for those who earn lower than P12,000 a month get a three percent interest rate, 5.375% for those members or who earn 12,000 and more monthly, is at 5.375% interest for one-year fixing and 6.375% for three-year fixing.
For the previous years, the interest rates were at 5.5% and 6.5%, respectively.
“As you can see, the interest rates have been lowered but we expect our income (this year) to outpace or be much higher than the previous years,” said Moti.
The lowering of interest rate is the initiative of the fund to convince its members to borrow from the fund especially that the banks have been offering only 6% interest rate since 2012. “We’ve been working so hard since around 2012-2013 since we started implementing reforms. Just to remind everybody where we were before, the interest then was around 11.5%,” he said.
He added that developers, whom the fund also calls as partners, have been contributing about 65% of its accounts.