POGO Ban May Lead to Increased Demand For Housing Loans

November 13, 2024 Philippines Industry Updates

Pag-IBIG Fund expects housing loan demand to rise due to more condos becoming available after the POGO ban, and is ready to handle it with P98.72B in savings.

The PH government decision to shut down the Philippine Offshore Gaming Operators (POGO) industry could lead to a significant shift in the country’s real estate market. According to Pag-IBIG Fund, the POGO ban is expected to increase demand for housing loans, particularly as more condominium units become available in the market. The state-run home financier is confident in its ability to manage this increased demand, thanks to its strong financial position and growing membership.

Pag-IBIG Fund, the government’s primary institution for providing affordable housing loans, has seen a steady rise in the savings of its members, which now total P98.72 billion. This financial buffer will help the organization meet the potential surge in loan applications. According to Domingo Jacinto Jr., Acting Vice President of Pag-IBIG Fund, the agency is already examining available real estate inventories to ensure that it can provide housing loans to its growing membership base.

“Tinitignan natin ‘yong [We are looking at the] inventories na available for members and sellers who are willing to sell their properties,” Pag-IBIG Acting Vice President Domingo Jacinto Jr. was quoted as saying in a report published by ABS-CBN.

“Hopefully, more members and more inventories come in. More quality housing units come in na maaaring i-consider ng members. ‘Yong ating kakayanan, kaya nating magpahiram (More quality housing units will become available, which our members can consider. With our current capacity, we can certainly provide loans),” he added.

As of September 2024, Pag-IBIG Fund boasts 16.37 million active members, a significant increase in participation from previous years. In line with this, the agency has disbursed over P88.17 billion in housing loans, reflecting the ongoing demand for affordable housing. Despite a slight decline in residential real estate loans in 2024, as reported by Leechiu Property Consultants in their third-quarter property report, Pag-IBIG Fund remains optimistic that demand will rebound, especially with the potential influx of housing units previously occupied by POGO employees.

READ: PH Condo Vacancies Increase in 2024 3Q Due to POGO Ban

Impact of the POGO Shutdown on Real Estate

The Philippine government’s decision to shut down the POGO industry, which had been under intense scrutiny due to concerns about illegal activities, is creating a ripple effect in the real estate sector. Many of the condominium units previously leased or owned by POGO workers are now expected to hit the market, increasing the supply of residential properties.

Pag-IBIG Fund expects this increased availability of condominiums and other residential units to fuel a rise in demand for housing loans. “We hope to see more quality housing units become available for our members,” Jacinto added. As POGO operations close, these units may become more affordable, creating an opportunity for more Filipinos to invest in homeownership.

However, while the increased supply may benefit buyers, Pag-IBIG Fund is also aware that housing market conditions can be unpredictable. The decline in residential real estate loans in the third quarter of 2024 reflects broader economic challenges, such as rising interest rates and inflation, which may affect affordability. Still, Pag-IBIG Fund is positioning itself to handle the expected increase in loan applications and ensure the continued viability of the fund.

READ: PH POGO Ban Leads to Global Spread of Illegal Betting

Financial Stability and Loan Availability

Pag-IBIG Fund is optimistic about its ability to meet the growing demand for housing loans, citing its strong financial health. The agency’s members’ savings, which have reached a record P98.72 billion, provide a solid foundation for lending. The funds accumulated from member contributions allow Pag-IBIG Fund to sustain its loan programs and ensure affordable rates for borrowers.

Jacinto emphasized that the agency’s strength lies in its members’ timely payments and the interest generated from loans.

“Sa tulong ng ating mga napapahiram, napapautang sa mga miyembro, meron tayong interest mula sa loans na ‘yan, tumataas ang kita ng Pag-IBIG fund. Kung nasa oras at tama ang bayad, masu-sustain ang affordability ng loan (With the help of our borrowers and members who consistently repay their loans on time, the Fund’s revenue grows, allowing us to continue offering affordable loan terms),” he pointed out.

He also noted that as long as members continue to honor their payments, Pag-IBIG Fund will remain sustainable, ensuring long-term availability of housing loans.
Pag-IBIG Fund has implemented various measures to make homeownership more accessible, such as providing competitive interest rates and flexible payment terms. The agency also maintains a robust monitoring system to ensure that loan recipients are able to make their payments on time. This proactive approach is crucial to maintaining the financial health of the fund and meeting the housing needs of Filipinos.

Support for Members Affected by Natural Disasters

In addition to anticipating a rise in housing loan demand due to the POGO ban, Pag-IBIG Fund is also focused on helping members who have been affected by recent natural disasters. Following the impact of Typhoon Kristine, which caused widespread damage in various parts of the country, Pag-IBIG Fund granted a one-month moratorium on housing loan payments for affected borrowers.

The moratorium applies to members residing in areas declared under a state of calamity, giving them some breathing room as they recover from the devastation. Pag-IBIG Fund has expressed its commitment to supporting these members during challenging times, ensuring that they are not burdened by immediate loan payments while they rebuild their lives.

As Pag-IBIG Fund prepares for an increase in housing loan applications, it faces both opportunities and challenges. On one hand, the expected influx of residential properties due to the POGO ban could help meet the growing demand for affordable housing. On the other hand, the overall economic environment remains uncertain, and factors such as rising interest rates and inflation could impact loan affordability for some members.