GSIS to launch Multi-Purpose Loan program in May

MANILA, Philippines — State-run Government Service Insurance System (GSIS) is set to launch in May a new program which aims to help its members settle their outstanding debt without penalties.

Acting GSIS president and general manager Rolando Macasaet over the weekend announced that the pension fund is planning to launch its Multi-Purpose Loan (MPL) program, a loan restructuring and debt consolidation scheme for members with unpaid loans.

“If, for example, a government employee took out a salary loan, emergency loan and conso-loan three years ago at 12 percent interest, GSIS will consolidate all these loans into one multi-purpose loan account. Then we will restructure the payment terms,” Macasaet said.

“Instead of paying 12 percent interest, the government employee will now only pay seven to eight percent interest under the MPL. Instead of three years to pay, we can perhaps adjust to make it five years,” he added.

He said the penalties and surcharges of the loans would likewise be waived by the GSIS upon approval of the employee’s MPL application.

Under the MPL program, GSIS members who have rendered at least 15 years of government service may borrow up to 14 times their basic monthly salary.

The loan will carry an interest rate of seven to eight percent, depending on the amount of the loan and the length of repayment.

Macasaet said the program would also allow newly hired government personnel with at least three months of service to borrow money from the GSIS. Currently, an employee is required to render at least 20 months of service in government before they can borrow from GSIS.

Macasaet said this feature seeks to prevent newly hired government employees from falling prey to loan sharks.

Currently, GSIS is offering the Program for Restructuring and Repayment of Debts (PRRD), a one-time condonation and restructuring program, which seeks to help members already out of government service to settle their outstanding loan balances.

Under the program, all unpaid penalties on the outstanding loan balance of a member will be condoned. The remaining balance will be restructured, and can be paid in full or installments.

The program will be open until Sept. 30 this year.

The GSIS has condoned P698.42 million in loan penalties under the PRRD since its launch on Dec. 18, 2018 until Jan. 6, 2020.

A total of 7,450 loan accounts were restructured, which cumulatively amounted to P393.18 million.

The pension fund has also collected P144.41 million from 2,630 members who opted to settle their loan balances in full.