SUN Savings Bank has secured a P200 million loan facility from the state-run Development Bank of the Philippines (DBP) to assist public school teachers in Cebu Province primarily in rebuilding their homes which were badly hit by Typhoon Odette (Rai) in December 2021.

“There is a huge demand now to fix up their homes, and we want to support that effort because we believe that the teachers deserve decent housing... Also there are other needs, like tuition fees for their children and medical expenses. But I’d say 90 percent of their needs are for housing construction, repair and renovation,” said Sun Savings president and chief executive officer Francisco Dizon during the Loan Signing Ceremony between Sun Savings Bank and DBP on Thursday, March 24, 2022.

Dizon said the Department of Education (DepEd) has mandated banks to extend loans to teachers for terms as long as five years from the previous three-year timeline.

“The implication for this is that teachers can borrow as much as P750,000 to P800,000 compared to P500,000 before and still pay the same monthly amortization,” said Dizon. “In terms of cash flow, they can borrow more without having to put up more money on a monthly basis. This is made possible because of the longer repayment terms from three to five years.”

A teacher who applies for a loan amounting to P800,000 would pay a monthly amortization of P15,000.

Last year, the government raised the salary of public school teachers as mandated by Republic Act 11466 or the Salary Standardization Law of 2019. The increases are scheduled in four tranches from the year 2020 until 2023 and will be per salary grade (SG) and step corresponding to the position.

The salary for Teacher I (SG 11), for example, was increased to P22,316 in 2020 and then to P23,877 in 2021. Their salary will be increased further to P25,439 in 2022 and then to P27,000 in 2023.

According to Dizon, Sun Savings is at the forefront of serving this market segment and has been offering teachers this expanded loan term of up to five years starting this month.

“The demand has been super strong. If there is such a thing as a storm surge, then this is it, as far as teachers’ loans are concerned,” Dizon said. “We are releasing at levels we have never seen before, really huge amounts simply because they really need the funds to fix their dwelling.”

Money borrowed by the teachers will be deducted by the DepEd from their payslips through the department’s automatic payroll deduction system, where Sun Savings Bank has been one of the accredited banks for over 10 years.

Augusto Gonzalez, Sun Savings Bank treasurer, said the bank will pay DBP in three years' time with loan interest to be paid on a quarterly basis and the principal loan amount to be paid at the end of the term.

Since March 1, Sun Savings has been able to lend to 2,000 teacher-borrowers in Cebu Province.

The bank counts around 10,000 of the 40,000 teachers in the province as its clients, making it the third-largest lender to public school teachers in Cebu. (KOC)