MANILA, Philippines – By May, government employees will be able to take advantage of a new loan program where members of the Government Service Insurance System (GSIS) can settle their debts with the state-run pension fund.
In a statement on Saturday, Acting President and CEO of GSIS Rolando L. Macasaet said the facility, which will be called the Multi-Use Loan (MPL) program, will not only restructure loans, but will also consolidate debts.
“If, for example, a government employee took out a salary loan, an emergency loan and a consumer loan three years ago at an interest rate of 12%, the GSIS will consolidate all these loans into one. MPL account. Then we will restructure the payment terms, ”Macasaet explained.
“Instead of paying 12% interest, the government employee will now only pay 7-8% interest under the MPL. Instead of three years to pay, maybe we can adjust to five years to pay, ”Macasaet added.
The GSIS plans to waive penalties and overdue surcharges from past loans once a member is eligible for the MPL.
GSIS members who have served 15 years or more in government would be allowed to borrow up to 14 times their basic monthly salary.
The interest rate of 7-8% per annum will depend on the loan amount as well as the repayment period.
In addition, relatively new government employees working for at least three months could borrow through the MPL, unlike other GSIS loan facilities which involve at least 20 months of public service.
“We noticed that newly hired public school teachers, for example, could not get a loan from GSIS. So what are they doing? They go to the loan sharks. They fall prey to the “five-six,” Macasaet said, partly in Filipino. “They have just started their service and they are already heavily in debt – because they don’t know they have to pay high interest. This is what GSIS is really trying to prevent.
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