President Rodrigo Duterte witnessed on Monday the signing of a memorandum of agreement between the Government Service Insurance System (GSIS) and the Department of Education (DepEd) aimed at facilitating the payment of teachers’ loans as well as other education department personnel from private lenders.
Education Secretary Leonor Briones signed for DepEd and GSIS President and General Manager Jesus Clint Aranas represented the GSIS during the event held in Malacañan Palace.
The implementation of GSIS financial assistance loan program or GFAL for DepEd personnel is consistent with the goal of the Duterte administration to help improve the plight of the country’s teachers.
The unprecedented agreement seeks to refinance the outstanding loans of DepEd personnel with private lending institutions accredited by DepEd at a much lower interest rates.
It also aims to improve the financial capability of teachers and ensure the preservation of their GSIS benefits. In tandem with the GSIS loan program implementation is the conduct of financial literacy seminar for teachers to guide in the management and disposition of their funds.
Under the MOA, DepEd shall prioritize the management of GSIS loans over and above the payment of loans taken by DepEd personnel from lending institutions as well as the deductions from its payroll of the monthly amortization due on the loans they have taken and their GFAL until those loans are fully paid.
For its part, the GSIS should complete the policy documentation in 30 days upon the execution of the agreement.
Having multiple loans weakens the capability of DepEd employees to settle their obligations, which include the payment of their monthly GSIS premiums and contributions.
The project reinforces the issuance of DepEd order No. 38 on July 31, 2017 reiterating the instruction to prioritize premium and loan payments for GSIS for other loans.
GFAL 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.
Active GSIS regular members may apply for the loan if they are permanent, having paid premiums for the last three years, not on leave of absence without pay, maintaining an outstanding loan with DepEd-accredited PLIs, having due and demandable GSIS loan and the borrower has no pending administrative or criminal case.
If a private lender has filed a case against a members for non-payment of obligations after GSIS loan payments have been prioritized by virtue of DO No.38, such member is still eligible to apply for GFAL.
Qualified members may borrow up to P500,000 as long as their take-home pay does not fall below P5,000 of their deducted monthly obligation.
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. PND