The Social Security System (SSS) released P7.93 billion in salary loans to more than 385,000 members during the first quarter 19 percent higher than the P6.69 billion given to some 354,000 borrowers in the same period last year.
SSS Assistant Vice President for Member Loans Department Boobie Angela A. Ocay said the amount covered employees accounted for about 90 percent of salary loans both in terms of amount disbursed and number of borrowers. Nearly 342,000 employees borrowed a combined P7.33 billion over the three-month period.
“We also disbursed salary loans amounting to P472.67 million for nearly 33,400 voluntary members, P77.71 million for about 4,100 overseas Filipino workers, and P45.61 million for over 5,600 self-employed individuals during the first quarter. Clearly, the salary loan program is one of the most significant and sought-after services offered by the SSS for active members with short-term financial needs,” Ocay said.
The SSS provides salary loans of up to P32,000 which are payable in 24 equal monthly installments. Borrower’s salary loan shall be renewed once 50 percent of the original principal amount has been paid and 50 percent of the term has lapsed. Qualified members contributing at higher monthly salary credits are entitled to bigger salary loan amounts.
Based on loan processing per region, the National Capital Region accounted for the largest share out of the total salary loan amount and number of borrowers last year, with P5.52 billion or 70 percent and 239,875 members or 62 percent, respectively.
Luzon followed with 17 percent or P1.36 billion released to about 77,000 members, Visayas with seven percent or P570.31 million granted to over 34,600 members, and Mindanao with six percent or P479.75 million disbursed to almost 33,600 members.
SSS salary loans carry an annual interest rate of ten percent applied on diminishing principal balance. Borrowers should remit their salary loan amortizations on time to avoid penalties of 12 percent per annum, depending on number of days delayed and continuing interest of 10 percent per annum upon expiration of term, which would both accrue until account is fully paid.
Ocay called on members with delinquent salary and short-term loans to apply for the ongoing Loan Restructuring Program (LRP) offered to member-borrowers who have previously lived or worked in a calamity and disaster stricken areas as declared by National Disaster Risk Reduction and Management Council (NDRRMC) or the national government such as the Mt. Pinatubo eruption and Luzon earthquake in the 1990’s and Typhoon Yolanda in 2013.
Launched last April 28, the LRP aims to help calamity-stricken borrowers to settle their unpaid short-term loans and regain their good SSS standing and member loan privileges. For example, borrowers can apply for a salary loan six months after their delinquent loan is fully paid under the LRP.
“The program offers conditional condonation of loan penalties. Borrowers will only pay the principal and interest, but they can no longer apply for any future penalty condonation programs. Members should take advantage of this prime opportunity to free themselves from their debt burden,” Ocay said.
Under the LRP, all of the coverable delinquent short-term loans of a member will be merged into one restructured loan which can be paid immediately in full or over an installment period of up to five years, with a minimal annual interest rate of three percent.
“Many members who had benefited from condoned loan penalties under previous programs expressed immense relief from finally paying off their SSS loan. Among them are borrowers who were able to enjoy the full amount of their pensions since they were spared from deductions from their benefits,” she said.