SSS Revises Salary Loan Guidelines

State-run Social Security System (SSS) said that it has already adopted new salary loan guidelines months before a Commission on Audit (COA) report has revealed the pension fund has overcharged its members by some P788.842 million.

However, SSS denied that it has not violated any law or policy on lending even if it had overcharged its member-borrowers.

Ma. Luz C. Generoso, SSS assistant vice president explained that the computation, which the SSS uses to calculate the interests on loans is based on a policy that was approved by the Social Security Commission (SSC) in 2000.

"In compliance with the SSC resolution, we started deducting in advance the first year interest on salary loans since 2000 to align the yield of our investments on member loans with the prevailing market rates," Generoso said.

"The interest computation was a regular and accepted method in credit-granting," she added.

Generoso pointed that the policy of collecting the first year advance interest is clearly indicated in the application form for salary loans which the member confirms to have read and agreed.

Meanwhile, Generoso said that the state-pension fund has now revised its guidelines to keep the fund in-step with the current low-interest rate environment and to improve administrative efficiency.

"We wanted to align our loan interest rates with the market so we reviewed and made necessary amendments in our salary loan guidelines. We forwarded this to the SSC, which they approved last April," Generoso explained.

Under the new guidelines, amortizations for short-term member loans will be computed by charging interest on the outstanding balance of the loan at the beginning of each installment period. Since the borrower will only pay interest on the amount of the principal that has not yet been repaid, interest payment is declining every period.

The 10 percent effective annual interest of the loan will be charged based on diminishing principal balance and it will be amortized over 24 months.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • What can void a new car warranty? James Deakin - Wheel Power
    What can void a new car warranty?

    "I was denied warranty once for changing my horn!" One very annoyed reader wrote. "I was told that placing a backup camera will void my warranty" said another. The others are best left in my private inbox as Yahoo! have a swear jar in the office that I do not feel like donating this week's pay to. Continue reading → …

  • Docu exposes destruction of PH marine resources VERA Files - The Inbox
    Docu exposes destruction of PH marine resources

    By Kiersnerr Gerwin B. Tacadena, VERA Files “Gutom (hunger),” Sen. Loren Legarda said is what’s in store for the Filipino people if destruction of the country's marine resources is not stopped. Legarda, chair of the Senate committee on Environment and Natural … Continue reading → …

  • ‘Yolanda’ fiberglass boats modern-day Noah’s ark VERA Files - The Inbox
    ‘Yolanda’ fiberglass boats modern-day Noah’s ark

    By Jane Dasal, VERA Files If you want to save the earth, build a boat. That's what a group of environmentalists is saying, especially if you want to save both the forests and fishermen affected by supertyphoon “Yolanda” (Haiyan). “Haiyan … Continue reading → …

POLL
Loading...
Poll Choice Options