HIGHLIGHTS OF ACCOMPLISHMENT REPORT
FOR CY 2013
The National Home Mortgage Finance Corporation (NHMFC), one of
the fund mobilizers of the key shelter agencies under the administration of the
Honorable Vice President Jejomar C. Binay, and the leadership of the new
President, Dr. Felixberto U. Bustos, Jr. is mandated to be the primary
Secondary Mortgage Institution (SMI), able to provide sustainable housing
finance and to develop the secondary capital market in the country.
In line with its mandate and to be more attractive and competitive in the
capital market and housing industry, several reforms were amended
particularly on the Housing Loan Receivables Purchase Program (HLRPP).
In coordination with Governance Commission for Government Owned
and Controlled Corporations (GCG), the NHMFC has come-up with four (4)
major final outputs (MFO) and achieved 97.40% of its targets, broken down as
follows:
I.
HOUSING FINANCE SERVICES
A. Purchase of Quality Mortgages and Other Housing Receivables thru
the Housing Loan Receivables Purchase Program
NHMFC launched the HLRPP in the last quarter of 2010. Under the
Program, the NHMFC will purchase seasoned housing loans receivables
either Contract to Sell (CTS) or Real Estate Mortgage (REM) from
originating institutions which will be turned into an asset pool for
eventual issuance of securities or bonds for sale in the capital market.
In order to strengthen public-private partnership towards the
development of a sustainable housing finance system in the country
and to be more competitive in the market, the HLRPP guidelines were
amended, particularly,
the reduction of interest rates and the
seasoning period of the amortizing borrowers prior to the sale or
assignment to NHMFC. Loans amounting to One Million Pesos (P 1.0 M)
and below will bear an interest rate of eight percent (8%) while loans
above One Million Pesos will have an interest rate of ten percent (10%)
for a maximum period of twenty-five (25) years. The NHMFC is the only
agency who is giving an interest rate that is fixed for the entire term of
the loan. The seasoning period was also reduced from twelve (12) to six
(6) months, considering that the NHMFC requires full payment of equity
with the originating housing developers and/or financial institutions.
Several road shows were conducted regularly in the various regions
of the country to discuss the features of the program with the real
estate organizations, housing developers/ originators, the Local
Government Units (LGUs), and other organizations interested in the
HLRPP. This move is geared towards the fulfillment of NHMFC’s
commitment to ensure sustainable liquidity for housing finance thru
the issuance of asset-backed securities.
The NHMFC is also in the process of standardizing the forms for
mortgage origination to facilitate the process of evaluation and due
diligence of seasoned housing loan receivables/mortgages.
The NHMFC was able to obtain approval from the Credit
Committee housing receivables worth P 940.00 Million from January to
December 2013 representing 117.50% of its target. These housing
accounts underwent the due diligence process to ensure buying
seasoned/quality mortgages.
Table 1: Purchase of Mortgages from January to December 2013
Performance Indicator
Value of housing
receivables approved for
purchase by the NHMFC’s
Credit Committee
Targets
Accomplishment
Performance
P 800.00 Mn
P 940.00 Mn
117.50%
940.00
1,000.00
800.00
900.00
800.00
700.00
Targets
Accomplishment
Graph 1: Graphical Presentation in Terms of Amount
B) Securitization of Mortgages and Other Housing Receivables
The NHMFC continues to receive a “AA” rating from the Philippine
Rating Services Corporation (PhilRatings) on “Bahay Bonds (BB1)” , the
first ever issuance of residential mortgage backed securities (RBMS) in
the Philippines by a government agency, and Bahay Bonds 2 (BB2) for
the past five (5) years and two (2) years, respectively.
The NHMFC was a recipient of the most “Innovative Listed
Corporate Bond Issue of the Year (First Listed Asset-Backed Security)
given by Philippine Dealing System Holdings Corporation &
Subsidiaries (PDS Group) on 28 February 2013.
As shown is Table 2, the NHMFC has three (3) performance
indicators for this program, as follows:
Table 2: Indicators, Targets and Accomplishments for Securitization of
Mortgages and Other Housing Receivables
Performance Indicator
Value of underlying
assets of mortgage
backed securities
approved for issuance
by the Board
Value of financial
engagement for other
government agencies/
private entities with
NHMFC as financial
advisor/ arranger
Extraction rate per
issue based on the
approved indicative
structure by the Board.
Targets
P 500.00 Mn
P 4.00 Bn
58%
Accomplishment
Approved per
Board
Resolution No.
3786 dated 22
August 2013 in
the amount of P
500.00 Million
Completed due
diligence of P
4.00 Bn worth
of CTS accounts
as Financial
Advisor per
MOA dated 15
April 2013
62% per Board
Resolution No.
3786 dated 22
August 2013
Performance
100%
100%
100%
C. Provision of Financial Advisory/ Consultancy and Other Services/
Engagements
In order for NHMFC to become a major player in the housing
finance industry and in the development of a sustainable and dynamic
secondary mortgage market, the Corporation must continue to develop
new, creative and innovative products/services. Table 3 shows
NHMFC’s target and accomplishment for this program.
Table 3: Targets and Accomplishment for Provision of Financial
Advisory/ Consultancy Services/Engagements
Performance
Indicator
Number of new, creative
and
innovative
products/
services
acted upon by the
Board
II.
Targets
At least
2
Accomplishment
1) CTS Backed
Securities
2) CMP Bond
Performance
100%
ACCOUNT/ LOAN MANAGEMENT
A. Master Services of Securitized Accounts/ Management of Accounts
In spite of the crisis and natural calamities affecting our country
and our clients, the NHMFC needs meet its collection targets in order to
settle its obligations to the trustee, investors and the funders, namely
SSS, GSIS, and HDMF. To give incentive to its clients, and encourage
them to update/maintain their accounts in current status, the NHMFC
continues to give raffle entries to clients who are regularly paying their
amortization under the “Bahay Ko Pananagutan Ko Program”, and
implemented the 0.5% interest discount. Table 4 shows three (3)
performance indicators, as follows:
Table 4: Targets and Accomplishment for Account/ Loan Mgt.
Performance Indicator
Percentage of payables
remitted to the trustee on
due dates
Collection Efficiency Ratio
Decreasing the value of
acquired
assets/
nonperforming loans (NPLs)
Targets
Accomplishment
Performance
100%
100%
100%
91%
5%
Reduction
114.75%
114.75%
6.15%
Reduction
123.00%
(P 615.70
Mn)
(P 757.40 Mn)
Graph 2: Graphical Presentation of Collection Efficiency Ratio
Graph 3: Graphical Presentation of Decrease in NPLs
III. ALTERNATIVE SAVINGS SCHEMES/ PRODUCTS
A. Provision of high yield/ affordable instruments for retail investors
(yield of Philippine Dealing System Treasury Reference Rates
(PDSTF) + spread)
In NHMFC’s desire to provide a continuous opportunity for small
investor to invest/earn in a safe, affordable, high yielding security, and
tax-free, the Corporation shall continue to issue retail bonds to small
investors. Table 5 shows its targets and accomplishment for this
program.
Table 5: Targets and Accomplishment for Provision of High Yield/
Affordable Instruments
Performance Indicator
Percentage of
issuance to individual
investor based on the
approved indicative
structure by the
Board
Targets
60% of P
500.00 Mn
Accomplishment
60% or P
300.00 Mn
per Board
Resolution
No. 3786
dated 22
August 2013
Performance
100%
IV. SMI OPERATIONS SUPPORT SERVICES
Quality Bonds
Since NHMFC’s goal is to be a dynamic leader in secondary
mortgage operations in the country, the NHMFC is strictly monitoring the
performance of the underlying collaterals of the bonds issued (i.e. BB1 and
BB2) and for future bond issuances. It created a Loan Advisory Office
(LAO) under the office of the Securitization Group to evaluate, monitor and
take immediate action on the accounts that slide down from updated (zero
arrears) to one (1) to ninety (90) days delinquency. Table 6 shows targets
and accomplishment for this program.
Table 6: Targets and Accomplishment for Quality Bonds
Performance Indicator
Targets
Issue Rating- BB1
≥AA
Issue Rating – BB2
≥AA
Compliance on the
submission of
requirements to rating
agency
20
documents
Accomplishment
Latest Rating
issued on
January 2013
“AA”
“AA” per letter
dated 27 Nov
2013 of
PhilRatings
16
documents
were
submitted
Performance
“AA”
“AA”
80%
V.
GENERAL ADMINISTRATIVE SERVICES (GAS)
In order to ensure the continual delivery of efficient services to the
general public and contribute to the global competitiveness, the NHMFC is
adopting the preparation of Quality Management System Manual (QMS) for
each of the processes and eventually subject the said processes to ISO
Certification. It also aims to ensure consistency of the quality of products/
services, and processes. The Corporation defined two (2) indicators for the
program as indicated in Table 7.
Table 7: Targets and Accomplishment for the Development of QMS
and ISO Certification
Performance Indicator
Targets
Number
of
ISO
Certification for quality
management
systems
obtained
At least 1
Number
of
management
developed
implemented
quality
systems
and
At least 2
(Foreclosure
and
Custodianship)
Accomplishment
Passed the
surveillance audit
conducted by
TUV SUD PSB
Philippines, Inc.
last 4 December
2013. Awaiting
for the ISO
Certificate for
Expanded
Counselling
System for Rizal,
NCR and Luzon
QMS for
Foreclosure and
Custodianship
process was
approved by
Management on
19 November
2013
Performance
100%
100%