GSIS to start buy out of loans of members this May

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GOVERNMENT Service Insurance System (GSIS) will start implementing their Financial Assistance Loan program during their 81st anniversary, which will fall on the first week of May this year, its official said.

GSIS executive vice president for operation Nora Saludares, in a phone interview with SunStar Bacolod Thursday, April 19, said an initial budget of P50 billion is needed to cover 90,000 members who are located in the 12 selected pilot areas in the country wherein their loans from private lending companies will be paid off by GSIS by granting each member with a P500,000 loan.

However, Negros Occidental and Bacolod City are not yet included in the first batch of borrowers but once the program is implemented nationwide hopefully by next year, all members who want to avail of this financial assistance loan program will be granted with a maximum loan of P500,000 each which will be payable for a term payment of six years with six percent interest rate, she explained.

There are approximately 90,000 GSIS members in the 12 pilot areas that can avail of the loan and more than 400,000 members nationwide, she added.

A budget of P300 billion is needed if the program will be implemented on a nationwide scale, she said.

There will be an evaluation after six months of its implementation which will start this May, she said.

She said that the borrower will undergo a Financial Literacy Seminar so they can be guided on how to manage their finances.

They have noticed that most GSIS members could hardly pay the monthly amortization because they were hooked to some private lending institutions, she said.

Under the General Appropriations Act, members should prioritize payment of their GSIS loans and other contributions, like their obligations with the Bureau of Internal Revenue, Pag-Ibig and PhilHealth.

Before the borrower can qualify for the program, they need to have at least P5,000 net take-home pay and undergo a financial literacy seminar, Saludares said.

The members should be taught how to manage their finances, citing their basic priorities. They should also start living within their means and travel abroad should not be part of their priorities, she said.

Earlier, GSIS President and General Manager Jesus Clint Aranas signed a memorandum of agreement (MOA) with Department of Education Secretary Leonor Briones held at Malacañang.

President Rodrigo Duterte supports this program of GSIS and DepEd to help the members regain their financial stability.

He witnessed the signing on April 16.

Aranas echoed the statement of the President saying, “we don’t want DepEd employees to sink deep into debt, so we have proposed a better way for them to manage their finances. The borrowers will pay back the loan to GSIS at easy and affordable terms.”

He added that having several loans weakens the employees’ capability to settle their obligations, which include payment of their loans to GSIS.

“Payment of their GSIS loans usually takes a back seat. If the practice continues, their future GSIS benefits are bound to suffer,” Aranas added.

The project likewise reinforces the issuance of DepEd Order (DO) No. 38 on July 31, 2017, and DO No. 55 on October 26, 2017, reiterating that DepEd shall accord first preference to GSIS, Pag-Ibig, BIR, and PhilHealth in deducting payments from the salaries of its personnel.

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