The Department of Education (DepEd) has recently signed a memorandum of agreement with the Government Service Insurance System (GSIS) that will facilitate the payment of the loans of teachers and other personnel of DepEd from private lenders, through a loan facility from GSIS. The pact between the two agencies was witnessed by President Rodrigo Duterte himself.
According to GSIS President and General Manager Jesus Clint Aranas, the move will provide a better way for public teachers to pay off their debts from private lenders, which commonly ensue higher interest. The proposal will let the borrowers pay back the loan to GSIS at easy and affordable terms.
“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,” Aranas said.
He added that having several loans weakens the employees’ capability to settle their obligations, which include payment of their monthly GSIS premiums and contributions.
“Payment of their GSIS premiums and loans usually take a back seat. If the practice continues, their future GSIS benefits are bound to suffer,” he added.
The program will be piloted for six months in 12 areas across the country, including Batangas, Bulacan, Dagupan, Naga, Cavite, Manila, Quezon City, Bohol, Ormoc, Koronadal, Butuan and Tagum.
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Qualified members may borrow up to Php500,000, provided their take-home pay will not go lower than Php5,000 their monthly obligations have been deducted.
The loan is payable in monthly installments for six years at 6 percent interest rate per annum computed in advance. Payments will be automatically deducted from the borrower’s salary.
The application form and requirements will be made available to all DepEd agencies covered under the pilot test program, by the first week of May this year.