GSIS eases rules on members’ loans

The Government Service Insurance System (GSIS) will relax its borrowing limits to allow public employees to acquire multiple loans simultaneously.

Following negotiations with the Department of Finance (DOF) and the Department of Budget and Management (DBM), officials said GSIS has also agreed initially to write-off its claims against the National Government (NG) for remittances in 1997 and 1998 when Congress failed to enact appropriations when its charter was changed.

Malacañang officials told reporters over the weekend that the GSIS had agreed to lift the suspension of public employees’ loan privileges pending the approval of its board of directors.

Budget Secretary Emilia Boncodin explained that when GSIS charter was changed in 1997, Congress did not appropriate the funds required by the amendments to its charter which increased the contribution of the NG to the fund.

GSIS earlier blamed the NG for failing to remit some P22-billion worth of funds representing government contributions and the contributions of national agencies to the fund.

The DBM explained later that it owed only P7.1 billion in remittances representing the increase in government contributions arising from the charter change.

"That’s what this whole thing was about to start with," Boncodin said. "We have been telling the GSIS that they can not collect from us what was not appropriated by Congress."

According to Boncodin, the GSIS has two choices: either go back to Congress and ask for appropriations for the amount that was not remitted in 1997 and 1998 or to write off the entire amount and credit the accounts of the employees for these claims.

"The DBM has been arguing that GSIS can not bill us because Congress made no appropriations for their charter change," Boncodin said.

In the meantime, Boncodin said the DBM has agreed to help GSIS sort out its database which has been blamed for about P35 billion worth of contributions that were not accounted for due to irregularities in the posting of remittances by government agencies.

Meeting with the members of the Philippine Government Employees Association (PGEA), last year, GSIS officials admitted for the first time that the "culprit" of the missing funds was internal.

Since then, the GSIS has been trying to verify exactly how much was "unaccounted for" in terms of premium payments that were either missing, unremitted or unreconciled.

Under normal circumstances, government agencies automatically withhold GSIS contributions from the salaries of government employees. These contributions are then remitted to the GSIS and certificates of payment were issued.