SSS Loan Amnesty Yields P1B

MANILA, Philippines - The Social Security System (SSS) collected P1.09 billion from its salary loan amnesty program in 2012 and condoned a total of 716.7 million. SSS is continuing to intensify collection effort from delinquent salary loans as this 2011 collection is barely two percent of the total delinquent accounts amounting to P86.2 billion. Delinquency has accumulated since it began its salary loan program in September 1964. "We need to continue this program because as you know there are many employers that are deducting but are not remitting their employees' contribution to SSS," Ma. Luz C. Generoso, SSS assistant vice president, in an interview. Total delinquency consists of P29.03 billion in principal, P16.672 billion in interest, and P40.484 billion in penalty. With this big delinquency amount, it needs to campaign for condonation in order to beef up its investable fund. It presently has an ongoing amnesty program that started on Apr. 2 and will last until Sept. 30, 2012. Among the problems it has been encountering in the amnesty program are the refusal of employers to allow their transferee-employees to avail of the program and lack of time of employers to reconcile their payments against billing statements issued. SSS also has limitations on allowing self-employed and voluntary members to avail of this since the amnesty program is manpower-intensive. The National Capital Region represents the sizable account of those that availed of the program with P793 million collected, while the rest of Luzon accounted for P131.4 million, Visayas, P85.9 million, and Mindanao, P78.6 million. SSS has always exceeded its limit on fund allocation for salary loan. From the maximum allowable investable fund of 10 percent as stated in its charter, its allocation for salary loan is now at 14 percent. Despite this excess and the big delinquency amount, SSS cannot stop its release of salary loans to members since members depend on this loan window for their urgent needs. To further raise collection from amnesty, it is trying to improve the program through flexibility and enhancements to the application system. It has also extended program period. "We allowed employers to submit applications and documentary requirements beyond June 30 (in 2011) until December 29," said Generoso. "We also allowed employers with submitted applications to pay beyond the deadline (given they have reconciling items)." Number of delinquent accounts total to 5.617 million. This is two times its accounts that are paid on time which presently total to 1.716 million. This amounts to P12.81 billion representing only 12 percent of total salary loan balance of P103.359 billion. Since its implementation in 1965, the salary loan has expanded into many forms. These include calamity loans, separated member loans, educational loans (Study Now Pay Later), emergency loans, the Y2K loans, and the stock investment loan.