THE SOCIAL Security System (SSS) released some P19.01 billion in salary loans in the first six months, up 8.4% year-on-year.
The pension fund said in a statement on Monday that the first-semester salary loan releases rose from the P17.53 billion disbursed in 2018.
SSS President and Chief Executive Officer Aurora C. Ignacio attributed the increase in loan releases to the rise of member-borrowers to 941,716 in the first half from 886,000 in the same period last year.
“Salary loan is one of the most popular loan privileges of SSS. In fact, salary loans represent almost the entire amount of loan releases for the first half of this year,” Ms. Ignacio was quoted as saying in the statement.
The biggest chunk or 846,823 of the member-borrowers were employed members and were granted a total of P17.67 billion in salary loans granted. Meanwhile, 75,465 were voluntary members with P1.08 billion worth of loans released; 10,423 were self-employed with P83.69 million in loans; and 9,004 were overseas Filipino workers granted some P163.07 million in loans.
A one-month salary loan is accessible for an SSS member that has at least 36 posted monthly contributions, six of which must have been paid within the last 12 months before the month of the loan application.
Members who are qualified to receive a two-month salary loan must have at least 72 posted monthly contributions, six of which must have been paid within the last 12 months prior to the month of application.
“Salary loan has a corresponding interest rate of 10% per annum based on the diminishing principal balance and shall be paid over 24 months or equivalent to two years. In case the borrower fails to pay it on time, SSS shall continue to charge a one percent penalty every month and 10% annual interest rate until the loan is fully paid,” Ignacio explained.
In 2018, SSS’ salary loan releases hit P30.5 billion, up 5.3% from total disbursements in 2017. The agency had said the uptick was pushed by an increase in applications through electronic means. — L.W.T. Noble