Philippines set for housing boom - INQ7.net
Business - Philippines set for housing boom - INQ7.net
Published on Page B3 of the December 1, 2006 issue of the Philippine Daily Inquirer
BANKS have started to aggressively advertise their housing loans with a previously unheard-of 25-year repayment period, in case you have not noticed yet.
"Buying your own home is just as simply affordable as buying appliances," trumpeted Metrobank's Philippine Savings Bank ad campaign, guaranteeing a fixed 11.5 percent interest rate on a 25-year loan.
Drawings of a washing machine (18 monthly installments of P3,480), a plasma TV (24 "gives" of P13,500), and a P1-million house (300 fixed monthly installments of P10,165) adorned the ad.
Even more, PSBank is willing to shave one percentage point off the first year's interest "if you don't get results [in the loan application] in five days or less."
On Thursday, Megaworld Corp. and Security Bank Corp. sought to undercut the competition by offering a lower 11.0 percent fixed interest rate on the same 25-year loan term.
Calling it Homelite, Megaworld, the largest residential condominium developer in the country, sweetened the offer by promising to further cut the interest rate without any prepayment penalty, should the low -inflation, low-interest-rate trajectory continue.
"Homelite is made possible since we are currently enjoying the lowest interest rate environment in our history," an exuberant Megaworld chairman and CEO Andrew Tan said.
"This is the result of our government's success in reigning in the fiscal deficit through a series of fiscal reforms, including raising of taxes and increasing efficiency in tax collection."
Former undersecretary of finance and now a director of Bank of the Philippine Islands, Romeo Bernardo, could not recall any commercial bank that offered a 25-year loan term in the past.
Just to be sure, Bernardo consulted with a colleague, who confirmed that only the government's pension fund unit, the Government Service Insurance System (GSIS), and its private sector counterpart, Social Security System, have had a 25-year repayment scheme, apart from the government's housing-specific Pag-IBIG Fund.
With the real estate industry turning the corner in 2005, Pag-IBIG Fund further stoked the market by slashing to 6.0 percent the interest on low-end housing loans of up to P300,000.
Even better, Pag-IBIG stretched the repayment period to 30 years.
For loans OF from P500,000 up to the P2 million ceiling, Pag-IBIG shaved the interest rate by half a percentage point to a more market-pegged 11.5 percent, still higher than the Megaworld-Security Bank rate.
Megaworld's Tan also predicted that with the lower rate and longer repayment scheme, condo buyers would be enticed to consider bigger units, instead of starting out with broom closets masquerading as studios.
Published on Page B3 of the December 1, 2006 issue of the Philippine Daily Inquirer
BANKS have started to aggressively advertise their housing loans with a previously unheard-of 25-year repayment period, in case you have not noticed yet.
"Buying your own home is just as simply affordable as buying appliances," trumpeted Metrobank's Philippine Savings Bank ad campaign, guaranteeing a fixed 11.5 percent interest rate on a 25-year loan.
Drawings of a washing machine (18 monthly installments of P3,480), a plasma TV (24 "gives" of P13,500), and a P1-million house (300 fixed monthly installments of P10,165) adorned the ad.
Even more, PSBank is willing to shave one percentage point off the first year's interest "if you don't get results [in the loan application] in five days or less."
On Thursday, Megaworld Corp. and Security Bank Corp. sought to undercut the competition by offering a lower 11.0 percent fixed interest rate on the same 25-year loan term.
Calling it Homelite, Megaworld, the largest residential condominium developer in the country, sweetened the offer by promising to further cut the interest rate without any prepayment penalty, should the low -inflation, low-interest-rate trajectory continue.
"Homelite is made possible since we are currently enjoying the lowest interest rate environment in our history," an exuberant Megaworld chairman and CEO Andrew Tan said.
"This is the result of our government's success in reigning in the fiscal deficit through a series of fiscal reforms, including raising of taxes and increasing efficiency in tax collection."
Former undersecretary of finance and now a director of Bank of the Philippine Islands, Romeo Bernardo, could not recall any commercial bank that offered a 25-year loan term in the past.
Just to be sure, Bernardo consulted with a colleague, who confirmed that only the government's pension fund unit, the Government Service Insurance System (GSIS), and its private sector counterpart, Social Security System, have had a 25-year repayment scheme, apart from the government's housing-specific Pag-IBIG Fund.
With the real estate industry turning the corner in 2005, Pag-IBIG Fund further stoked the market by slashing to 6.0 percent the interest on low-end housing loans of up to P300,000.
Even better, Pag-IBIG stretched the repayment period to 30 years.
For loans OF from P500,000 up to the P2 million ceiling, Pag-IBIG shaved the interest rate by half a percentage point to a more market-pegged 11.5 percent, still higher than the Megaworld-Security Bank rate.
Megaworld's Tan also predicted that with the lower rate and longer repayment scheme, condo buyers would be enticed to consider bigger units, instead of starting out with broom closets masquerading as studios.
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