MANILA, Philippines – In celebration of the Elderly Filipino Week, the Social Security System (SSS) unveiled a new borrowing program for pensioners.
Under the enhanced Pension Loan Program (PLP), the SSS said more than 1.5 million retiree-pensioners may loan up to P200,000.
SSS President and Chief Executive Officer Aurora Ignacio said on Friday the enhanced guidelines on the PLP, which is pursuant to Social Security Commission (SSC) Resolution No. 429 series of 2019, is aimed to provide adequate financial assistance to qualified retiree pensioners.
“They can now borrow up to 12 times their basic monthly pension plus the additional P1,000 benefit. SSS branches are now accepting PLP applications from qualified retiree-pensioners,” Ignacio said in a statement.
Qualified under the new guidelines are retiree pensioners who are 85 years old and below at the end of the loan repayment term if they have no outstanding loan balance, or benefit overpayment payable to SSS from his monthly pension.
Pensioners must also have no existing advance pension under the SSS calamity package and must be receiving his regular monthly pension for at least one month and has an “active” pension status.
“We want our pensioners to know that we value them as one of our key stakeholders in recognition of their support to SSS during their prime, wherein their monthly contributions were the lifeline of the pension fund then,” Ignacio said.
The enhanced loan program for pensioners grants a higher loanable amount, longer payment terms and wider range for the age qualification.
It also gives borrowers a wider option to choose from their loanable amount.
From the previous minimum loanable amount of twice his basic monthly pension (BMP) plus the P1,000 additional benefit, the pensioner borrower may now loan up to three times, six times, nine times or 12 times of his BMP plus the P1,000 additional benefit.
The repayment term was also adjusted so that borrowers will have the option to pay their loan in six, 12 or 24 months with the first monthly amortization to be due on the second month after the loan is granted.
The SSS said these options were given to discourage pensioners from transacting with loan organizations which charge steep interest rates.
“We hope that more pensioners will be encouraged to avail of this loan as this only incurs an interest rate of 10 percent per annum,” Ignacio said.
The SSS implemented the PLP last September 2018 to prevent the growing incidence of pensioners falling victims to loan sharks and help them with their short-term needs.
So far, the agency has released 59,224 pension loans amounting to P1.4 billion as of September 30, 2019.
Based on SSS data on loan term, 0.8 percent of the pensioner-borrowers preferred the three-month term, 5.88 percent for six months, and 93.32 percent for 12 months as of end-September 2019.