GSIS disburses P77 billion financial assistance loans

MANILA, Philippines — The Government Service Insurance System (GSIS) has disbursed about P77 billion to assist members who have been buried in debt because of lending institutions imposing high interest rates.

In a statement, GSIS chairman and acting president Rolando Macasaet said the state pension fund has released P77 billion since it launched the GSIS financial assistance loan (GFAL) program on May 15, 2018.

 The amount benefited 190,000 members, with an average loan amount of P403,000 each, he said.

GFAL allows GSIS members to consolidate and transfer their existing loan balances amounting up to P500,000 from other lending institutions to the state pension fund.

 “The GFAL program is our intervention measure in response to President Duterte’s order to help end the cycle in which GSIS members fall prey to predatory lending businesses that charge staggering interest rates,” Macasaet said.

 “It is an additional credit line to dissuade our members from going back to lenders,” he said.

 The GFAL facility enables members to pay their outstanding loans with lenders at a lower interest rate of six percent per annum and longer payment term of six years. 

 GSIS will directly pay the lenders, while the member-borrower will amortize the loan through salary deduction.

 If a member’s total loan is below P500,000, the balance may be applied for as a top-up loan, with the proceeds directly payable to the borrowers through check.

 “The program ensures our members higher take-home pay, decent wages, and protection for their future benefits from unwanted deductions,” Macasaet said.

 GFAL also aims to educate member-borrowers in handling finances, with applicants required to attend the financial literacy seminars prior to the grant of the loan.

 To date, GSIS has forged memoranda of agreement (MOAs) with 1,275 government agencies, allowing their respective employees to apply for GFAL. This also covers 2,554 attached agencies, sub-agencies, and regional offices. 

To accommodate more members, GSIS has extended GFAL’s application deadline until July 26 this year.

 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.