8990 Holdings prefers Pag-IBIG loans to in-house financing

Mass housing developer 8990 Holdings Inc. is seeking to increase the number of buyers via Home Development Mutual Fund or Pag-IBIG instead of in-house financing.

 

"We'd like to go back to the situation where majority of our revenues come from Pag-IBIG, maybe 70 percent, and only 30 percent would be in-house generated," President Januario Jesus Atencio told investors and analysts late Thursday.

 

The company delivered 2,044 housing loan accounts worth P1.9 billion to Pag-IBIG during the first half of the year, compared with P1.8 billion for the whole of 2014. So far, P840 million has been processed covering 935 units.

 

First-half revenues generated through Pag-IBIG helped increase 8990 Holding's total income from housing operations by 16 percent to over P4.99 billion from P4.3 billion a year earlier.

 

"If this trend continues – of us getting more and more cashflow from Pag-IBIG Fund – we expect our cashflow from operations to be positive by the end of 2015. That is one of our major objectives," Atencio said.

 

To boost its financial results, the company is banking on a lower 6.5 percent interest rate Pag-IBIG implemented in June as well as the higher loan ceiling of P1.7 million the Housing and Urban Development Coordinating Council set for low-cost housing

 

The lower interest rate on Pag-IBIG loans means lower amortizations, while the higher loan ceiling for low-cost houses gives buyers more benefits that include long-term financing and flexible interest payments. 

 

"We think that in going back to Pag-IBIG Fund... we are now able to balance our cashflows and make our assets and liabilities in our balance sheet better so we can have a better asset base and cashflow to continue our growth for the next years," said Atencio. 

 

8990 Holdings has launched six projects across the country as of end-June, four of which have already contributed P803 million in revenues. The company plans to launch three more developments in the third quarter.

 

"We're almost through with the government permits and licenses. Admittedly, this was delayed because of a nationwide, comprehensive land use plan procedure which all local governments had to do," said Atencio.

 

The developer looks at doubling the number of projects by 2020. Its current landbank stands at 446 hectares, translating to a five-year business activity for the company. – VS, GMA News