State-owned Home Development Mutual Fund, popularly known as the Pag-IBIG Fund, is looking at offering as much as P3 billion bonds to retail investors next year to cope with the booming demand for low-cost shelter financing.

“We will be offering retail Pag-IBIG housing bonds next year because from our housing fairs in Hong Kong, Singapore and even in Europe, there was clamor for a savings program that would allow OFWs to save,” Emma Linda Faria, Pag-IBIG deputy chief executive for support services, said.

Faria said the state-owned company is looking at an issue of at least P3 billion worth of five-year debt but it could be higher depending on the demand.

“The OFWs said that instead of saving on a monthly basis, they can do so on a one-time basis with Pag-IBIG, they get return on their savings and at the same time, participate in the country’s housing program,” she added.

Jaime Fabiana, Pag-IBIG Fund chief executive, earlier said they are tightening up on housing loans to ensure the viability amid an overwhelming demand for home financing.

The agency will grant housing loans only to members who have been active for at least a year, and to those who have paid in a lump sum equivalent to 24 monthly contributions.

The one-year membership rule would help the agency stay viable and build up funds for re-lending, he said.

“Following the reduction in interest rates and the lengthening of loan term to 30 years, Pag-IBIG experienced immense growth in loan approvals, recording an average growth rate of 42 percent for the last three years – P22 billion in 2007, P34 billion in 2008, and P46 billion in 2009,’’ Fabiana said.

“At this rate, it is no longer sustainable for Pag-IBIG to finance the growing demand for housing.”

The new rules come into effect September 30 this year.

Fabiana said waiving the membership requirement was prone to abuse, adding one housing project in Pampanga showed 400 approved accounts where the borrowers denied having taken out the  loans.

In that case, he said, the Pag-IBIG members were tricked into signing housing loan documents in exchange for P800 to P1,000.

Pag-IBIG is also looking at tightening the rules for the “fast lane” window for developers of good standing. Developers who qualify may get their loan proceeds released seven days after filing documents with the agency. Monitoring and verification take place only after the loan is released.

In the case of the 400 spurious accounts in Pampanga, the loan proceeds were disbursed under the fast lane because the developer, Globe Asiatique, was in good standing with the agency.