MANILA, Philippines — State pension fund Government Service Insurance System (GSIS) recently introduced a new loan scheme to prevent its members from borrowing funds from private lenders.
In a statement, GSIS chairman and officer-in-charge Rolando Macasaet said the state fund has included a new feature under its loan transfer and consolidation program called the GSIS Financial Assistance Program (GFAL).
Under GFAL, GSIS members may transfer loans amounting up to P500,000 to the pension fund from lending institutions, such as government banks and cooperatives, that are duly accredited by their agencies.
The loan, which has an interest rate of six percent per annum and repayment period of six years, will be directly paid to the lending institutions, the GSIS said.
“However, should a member’s total loan with the lending institution be below P500,000, the balance may be applied for as top-up loan, with the proceeds directly payable to the borrowers through check,” Macasaet said.
“We introduced the top-up loan to help GFAL borrowers augment their funds to defray for their other needs. Instead of running to private lenders for a fresh loan, members are instead advised to optimize their GFAL and take advantage of the lower rate and longer payment terms,” he added.
GFAL was initially offered to public school teachers and employees of the Department of Education (DepEd) last May 2018 to improve their financial capacity and help them refinance their outstanding loans with lending institutions.
Last July, the state fund expanded the program’s coverage to other agencies and local government units due to the strong interest.
“We heeded their demand recognizing that all GSIS members should enjoy the same privileges for the sake of equality and fairness,” Macasaet said.
The GSIS chief said the program was in response to the call of President Duterte to help improve the financial situation of teachers and other government employees who fall prey to money lending schemes, which are often tied with high interest rates.
Agencies should first enter into a memorandum of agreement with GSIS to enable their employees to avail of GFAL.
Active regular or special members who have permanent employment status, have no pending administrative case or criminal charge, and are not on leave without pay are qualified to apply for the program.
They should also have at least three years of period with paid premiums, have no due and demandable loan account with GSIS, and have a take-home pay not lower than P5,000 after all monthly obligations have been deducted.
Borrowers may apply for GFAL and Top-Up Loan only once.