The Social Security System (SSS) has announced that it will be offering once again its Loan Restructuring Program (LRP) to delinquent member-borrowers, with the agency expecting to generate P1.2 billion from the program and condone some P2.85 billion in penalties.
SSS President and CEO Emmanuel F. Dooc said during a news conference on Thursday that the re-implementation of the LRP will be offered from April 2 to October 2, giving delinquent members six months to avail themselves of the service.
The state-run pension fund pointed out that around 250,000 members would benefit from the re-implemented LRP.
The first implementation of the program occurred in April 2016, with an availment period of one year, and was able to help around 800,000 individual member-borrowers.
It generated P6 billion for the pension fund.
“Income is secondary, the goal is really to help borrowers. There are some who were not able to avail [themselves] of the LRP last time. And there are new members covered who are affected by calamities in 2017, like the Marawi and Zamboanga siege. The latest would be the victims of the Mayon Volcano eruption,” Dooc said.
Dooc pointed out that the decrease in expected income for the LRP re-implementation was based on the number of member-borrowers, which has decreased since the previous LRP offering.
The LRP allows member-borrowers to settle their overdue loan principal and interest in full or by installment under a restructured term depending on their capacity.
For both schemes, the SSS shall waive all the loan penalties after the member has completed paying the restructured loan.
Member-borrowers must be residing or working as of the date of the disaster in a calamity or disaster-stricken area declared by the National Disaster Risk Reduction and Management Council (NDRRMC) or, in the case of Ondoy, by the national government.
The LRP has an affordable amortization, which has a lower interest rate of 3 percent, compared to the interest-rate levels of other loan packages reaching 10 percent.
Meanwhile, the SSS chief pointed out that he is hopeful that the contribution hike will happen during the second half of the year.
“We remain hopeful. Personally, I remain hopeful that we can effect the contribution increase. I hope that we can still do it on the second half [of the year]. [On the] first half there’s a slim chance. Hopefully, [by] June, the earlier the bigger our collection,” he added.
Earlier, the SSS said the proposal to increase the minimum monthly salary credit (MSC) to P4,000 from P1,000 and the maximum MSC to P20,000 from P16,000 along with the 3-percent contribution rate hike will increase the minimum and maximum contributions to P560 from P110, and to P2,800 from P1,760, respectively.
Dooc explained that the contribution increase would translate to higher benefits for members and pensioners since benefit computation is based on the number of credited years and MSC.
In January the state-run pension fund pointed out that it will ask President Duterte to once again look into the proposal to increase its minimum and maximum MSC, as well as contribution rates this year, to further increase the viability of the life of the agency.
The pending SSS charter amendment will allow the Social Security Commission (SSC) to make changes in terms of the rates imposed currently by the pension fund. There is no provision under the current charter giving the SSC the power to adjust the rate.