By Leilanie G. Adriano
Staff Reporter
LAOAG CITY—Permanent gov’t employees with outstanding loan obligations with lending institutions may wish to avail of a one-time loan balance-transfer and debt-consolidation program of the state pension fund Government Service Insurance System (GSIS).
In a press conference held at a hotel in this city, Lord A. Bico, GSIS Laoag Branch manager reported that at least nine local government units and one national government agency in the provinces of Ilocos Norte and Ilocos Sur have already signed a memorandum of agreement to enable their employees to enjoy its benefits of lower interest rate of 6% per annum and longer repayment term of six years.
These are the towns of Pagudpud, Pasuquin, Dingras, Vintar, and Burgos in Ilocos Norte and the towns of San Emilio, Banayoyo, Lidlidda, Sta. Catalina in Ilocos Sur, including the Department of Agrarian Reform.
The GSIS financial assistance loan (GFAL) 1 was originally offered to teaching and non-teaching personnel of the Department of Education and this was later on extended to the other GSIS members effective July 27, 2019.
Mr. Bico explained that the expanded GFAL program, named GFAL 2, seeks to ease the burden of other government personnel and help enhance the pension fund’s collection efficiency.
Under GFAL 2, borrowers may transfer their loan balances to GSIS from lending institutions.
A qualified applicant may avail of maximum loan amount of PHP500,000, with an interest rate of only 6 percent per annum.
“With a lower interest rate compared to other lending institutions, this will ultimately result in higher net take-home pay and protect their future retirement benefit,” said Salvacion P. Mate, GSIS senior vice president for Luzon group.
“GFAL is in response to the call of President Duterte for us to get rid of loan sharks by helping government employees settle their debts with double-digit interest rates,” Ms. Mate added.
To reach out to more Ilocanos, the GSIS conducted a stakeholders’ forum on October 4, 2019 to explain the different benefits of the program.
This year, GFAL’s features were further improved by introducing a “top-up” option, which will enable borrowers to maximize the loanable amount of PHP500,000.
GFAL borrowers whose outstanding loans with lending institutions do not exceed PHP500,000 may apply for the remaining available credit as “top-up loan”.
Unlike the GFAL proceeds, which GSIS pays directly to lending institutions, the “top-up loan” proceeds will be released to the member for a minimum of five days once applicants fully comply with the requirements.
To qualify for GFAL, applicants must be permanent government employees with outstanding loan from lending institutions, government banks, or cooperatives accredited or recognized by their agency; have at least three years of periods with paid premiums; and have no due and demandable loan account with GSIS.
In addition, they should not be on leave without pay at the time of application; have a net take-home pay of not lower than P5,000 after deduction of monthly obligations; and have no pending administrative case or criminal charge.
Of the total PHP70 billion budget for this program nationwide, Ilocos Norte has been allotted PHP1.1 billion.
So far, more than 200 active GSIS members in the province have availed of the program.
With this, the GSIS is calling on all qualified government workers to take advantage of GFAL and make sure to attend a financial literacy seminar, which is a requirement prior to loan processing.