Vice President Manuel “Noli” De Castro has claimed that over the past three years the Home Development Mutual Fund otherwise known as the Pag-Ibig fund which he chairs has introduced more reforms in its lending guidelines than at any other period in its 28-year history.

According to De Castro, who is also head of the Housing and Urban Development Coordinating Council, the state-owned fund has been quite active in creating a policy environment that has greatly improved access to housing.

De Castro pointed out that the Housing loan interest rates were adjusted five times from 2006 to April 2009, resulting in an environment of low interest rates.

The biggest cuts were in the lower loan packages that target the ordinary wage earners. Loan payment terms were increased to a maximum of 30 years for all packages.

“Today, members of the fund may borrow up to P3-million, payable at a maximum of 30 years, and with interest rates ranging from 6 percent to 11.5 percent,” De Castro pointed out.

He said with the fund’s affordable loans, home ownership became a viable and practical option over rental housing.

Furthermore, De Castro stated that the monthly amortizations have become more affordable than even monthly rental rates.

“Also our success in keeping inflation rate at historically low levels is perhaps the best support government policy has provided to social security institutions such as the Pag-Ibig fund,” the Vice President said.

He explained that sound macroeconomic policies impact on social security in terms of generating economic activity, stable employment, and steady income for vulnerable households.

De Castro added that without a supportive economic policy, the fiscal drain on the resources of government will simply be too much for government to handle.