MANILA, Philippines — State-run Social Security System (SSS) is set to implement a Loan Restructuring Program (LRP) for members who are unable to pay their loans due to calamities or natural disasters.
In a press briefing, SSS president and CEO Emmanuel Dooc said the state fund would offer from April 2 to Oct. 1, its LRP to more than 250,000 members with overdue loans.
“We would like to express our gratitude to President Duterte for granting us the authority to allow our member-borrowers to clean up their loan accounts with SSS,” Dooc said.
“This is our way of helping our members to clear their obligations within their capacity, as well as making sure that they have a secure future with their entitlement to full SSS benefits,” he said.
According to the SSS, the scheme will enable member-borrowers to lengthen the payment period of loans by allowing them to settle the principal and interest amount of their loans in full or by installment, depending on their capacity.
The SSS will also waive all the loan penalties after the member has completed paying the restructured loan. It also provides more affordable amortization by lowering the interest rate to three percent from the original 10 percent.
With the implementation of the LRP, the state fund expects to generate about P1.2 billion in additional income from the payment of overdue loans. About P2.85 billion in penalties are also expected to be condoned after payment.
This will be the second time the SSS will implement a loan restructuring program for its borrowers. The first was offered from April 2016 to April 2017, generating roughly P6 billion from 800,000 members.
Dooc said the LRP was brought back in response to the clamor of members who were not able to avail of the LRP offered last time.
To qualify under the second LRP, the SSS said the loan must be past due for at least six months.
Member-borrowers must also be residing or working in a calamity or disaster stricken area declared by the National Disaster Risk Reduction and Management Council (NDRRMC) or the national government.
The program covers member-borrowers who have past due loans like the Salary Loan, Emergency Loan, Educational Loan, Study Now Pay Later Plan, Voc-Tech Loans, Y2K Loans and Investments Incentive Loan.