THE state-run Home Development Mutual (Pag-IBIG) Fund ruled out further cuts to its subsidized socialized housing loan rate amid a slowdown in demand after the Middle East war erupted.
Pag-IBIG Fund Chief Executive Officer Marilene C. Acosta told the BusinessMirror that lowering the 3 percent rate further is not feasible as the financial impact will be negative for the fund itself as early as the first year of its implementation.
The Fund saw demand for housing loans slow after the US-Iran war escalated, but uptake has started to recover, Acosta told the BusinessMirror.
As of July, Pag-IBIG’s housing loan takeouts reached P85 billion, driven by the availability of units under the government’s ‘Pambansang Pabahay para sa Pilipino Housing,’ or 4PH,’ program and socialized horizontal housing projects.
Pag-IBIG Fund offers a subsidized 3-percent rate for eligible social housing loans under the ‘Expanded 4PH’ program, as well as promotional rates of 4.5 percent for low-cost housing loans and 5.75 percent for medium-cost housing loans until the end of 2026.
‘[This is] just so our members can still borrow despite the crisis because we have to infuse funds into the economy,’ Acosta told the BusinessMirror.
The rates are lower than those offered in the market, where housing loan rates can reach as high as 8 percent, she added.
However, Acosta said the Pag-IBIG Fund also needs to carefully manage its asset allocation to ensure that the returns from its investments can offset the low yields from its lending programs and to provide competitive dividend rates to its members.
Around 10 percent of Pag-IBIG members are housing loan borrowers, while the remaining 90 percent are savers, she explained.
‘It is also incumbent upon us that we give competitive dividend rates higher than the inflation rate. Otherwise, their savings will lose value,’ Acosta said.
Under its charter, the Fund returns at least 70 percent of its annual net income to members in the form of dividends, which are credited to their savings every year.
Pag-IBIG Fund is expecting member savings to reach around P240 billion this year, higher than the P160 billion it collected in 2025, Acosta said.
The savings will be deployed across the Fund’s various programs, including short-term loans, housing loans and investments. It has also invested in housing projects that are expected to generate affordable housing units.
In the first quarter of 2026, Pag-IBIG Fund’s net income grew by 11.27 percent to P16.771 billion from P15.072 billion in the same period last year.
The Fund’s income from investments jumped by 50.67 percent year-on-year to P3.033 billion from P2.013 billion.
Pag-IBIG’s total assets also rose by 3.40 percent to P1.276 trillion as of March 2026 from P1.234 trillion at year-end 2025.