Housing Fair Offers “Affordable” Units Starting at P1.4 Million, Which Is Only Eleven Years of Minimum Wage
Bohiney Magazine | The London Prat
Pag-IBIG Announces You Can Own a Home for P2,257 Per Month, Neglects to Mention You Will Owe That Amount for 30 Years
CALAMBA, LAGUNA — Pag-IBIG Fund, the government housing finance institution whose name translates to Love but whose amortization schedule translates to Commitment Issues, announced this week that Filipinos can now purchase a home at socialized rates starting at P2,257.91 per month, an amount described in official materials as “affordable” and by a minimum-wage worker in Laguna as “about a quarter of my take-home pay.”
The figure applies to a unit at Pasinaya Heights priced at P1.404 million, available through Pag-IBIG’s Expanded 4PH Program at a subsidized 3 percent interest rate for the first five years. What happens after the first five years was explained in the sixth paragraph of the press release, which noted that rates may be extended “for eligible borrowers,” an eligibility requirement that was not further specified in materials distributed at the housing fair.
The Mathematics, Applied
A Pag-IBIG official who asked to remain anonymous because she had done the math confirmed that a 30-year loan at the advertised rate for a P1.404 million unit will result in total payments of approximately P2.8 to P3.2 million depending on how the post-subsidy rate is calculated. This represents a return on investment for Pag-IBIG that the official described as “sustainable for the fund.” It represents a debt level that housing economists at the Manila Bulletin analysis note is higher than median annual household income multiplied by six.
The Housing Fair Experience
More than 20,000 units were showcased at the Calamba housing fair, which the DHSUD Secretary described as making “the path to homeownership easier and more accessible.” The fair featured private developers, government financing options, and what attendees described as “a lot of brochures and one very enthusiastic man near the Asenso Yuhum Residences booth who would not let you leave without filling out a form.”
British consumers are gloomiest since 1978 due to the cost of housing; Filipino families are considerably more optimistic because they have been told P2,257 per month is affordable. Whether optimism or mathematics is the better guide to the housing market is a question the next generation of homeowners will resolve sometime around 2056, when the loan matures.