The Government Service Insurance System (GSIS) and the Home Development Mutual Fund (HDMF) or Pag-IBIG Fund on Monday signed a credit facility agreement on the housing loans of government employees.

The P5-billion agreement was signed by GSIS president and general manager Robert Vergara and HDMF chief executive Darlene Berberabe.

GSIS and HDMF intend to synchronize efforts to implement government’s housing program after the pension fund for government workers scrapped last April its housing loan program for members, Vergara said.

“It has been a difficult decision for us to stop direct home lending for our members but we are, above all, obligated to them to ensure that their contributions are managed prudently for their greater benefit," Vergara said.

“More importantly, this agreement proves that the pension fund continues to be a vehicle for realizing the homeownership dream of our stakeholders in our role as a partner of Pag-IBIG," noted Vergara.

The GSIS board of trustees wants the pension fund’s home lending program — in place since the mid-1950s — rationalized following its dismal performance.

GSIS records showed that in 2010the pension fund lent P600 million in housing loans to more than 500 members, which pales in comparison to Pag-IBIG Fund’s total loans of P5.5 billion to over 11,000 government employees.

The Pag-IBIG loans are 10 times more that the GSIS figures and 20 times more than the number of government employees covered.

However, what makes the GSIS housing loan program truly disappointing was that half of the loan portfolio involving more than 16,000 housing units either were foreclosed or cancelled, Vergara noted.

As part of the agreement with Pag-IBIG, GSIS requested HDMF to put up a special lane for GSIS members and pensioners to facilitate the processing of their loan applications. — VS, GMA News