Few of us are aware of the DepEd’s Automated Payroll Deduction System Guidelines for Private Lending Institutions. Apparently, in an effort to prop up the public school teachers who have sagged to their knees with the various loans they have availed of, the Department of Education has elected to step in. In order to survive, most teachers avail themselves of all the loan facilities made available to them, and when its time to pay these loans, they simply take out a new loan to pay for the old one. It is this culture that has pervaded the public school system for so long that it has become second nature to them.
However, how legal, let alone how moral, is it for the DepEd to unilaterally suspend the payments to the duly authorized and accredited lending corporations that are currently serving the department’s teachers and other personnel? These institutions which have been accredited by the Department to service their personnel have lent money to these teachers via payroll deductions which were previously approved by the DepEd. In the guise of reviewing the system, these deductions were suspended and with this, of course, the payments to the lending institutions.
I have a couple of concerns I wish to air here:
1. If these institutions were allowed to conduct business with the DepEd, I presume they were thoroughly screened, required to submit unimpeachable credentials, and likewise required to show transparency in their loan agreements with the department. Otherwise, how could they have entered into contracts with the DepEd? Assuming all these are in order, how can the department just whimsically choose to dishonor these contracts and allow the debtors (teachers and other personnel of the Dept. of Education) to walk away from their legitimate loans? Is this the department’s way of alleviating the teachers’ plight? What about the lenders’ plight? Is it right for the DepEd to undermine the arrangements entered into by these two parties and patently condoned by the DepEd through its agreement to incremental payroll deductions as the mode of payment for such loans?
2. If this suspension was meant to be temporary, i.e., to review the system, how long does it take to conduct this review? It’s now almost two years since the suspension, and there seems to be no end in sight for this review. What are the lenders’ safeguards here?
3. The lenders are generally protected by law. The Magna Carta for Public School Teachers for instance recognizes these payroll deductions. Other laws have been passed to protect lenders such as the Thrift Bank Act of 1995. With the guidelines recognizing only the obligations due to the GSIS, HDMF, PHIC and other government institutions like the BIR as qualified deductions, the DepEd is not only prejudicial to these private lending companies but effectively sends a grim message across to their teachers: your loans are herewith condoned.
4. The DepEd has issued a legislative policy which declares that its personnel should have a take home pay of at least P3,000 net of deductions. It is presumably on this basis that all other deductions have been frozen with the exception of the government-related agencies. Does this mean that all other lenders are unilaterally shut out, or is this a breeding ground for corrupt selective purges? Who monitors this? Again, how long is this supposed to be in effect?
Principally, these lenders agreed to these loans precisely because of the protection that this type of loans offer them. When the DepEd expressly agrees to these deductions through its authority to deduct issued to the lender, these can no longer be ignored or negated, like all other obligations under the law.
Legitimate lending institutions get their funding from individuals, usually retirees seeking for better rates on their money than what banks can give them. With their capital investments in severe danger of being zapped, how can we in conscience damn them to this consequence, and in the same breath allow the borrowers to walk away from their obligations? In the two years that have elapsed where very minimal collection has been allowed for these loans, these lending institutions have been unduly burdened, having to fork out interest payments on these capital investments with virtually no collections to speak of. In no time, we will have dying corporations littering the roads leading to the DepEd offices. Too, the department’s decision to regionalize the billings for such loans only adds up to the delay in sorting out and processing these loans.
What is the recourse of the hapless lender? Resort to litigation? Certainly it cannot count on gentle persuasion. Expect the lawyers to cash in on this one.
But what the government may be forgetting or have decided to turn a blind eye to in all these brouhaha is that behind all of these lending institutions are thousands of government retirees and small investors with their hard-earned lifetime savings on the line. If the present situation remained, which undoubtedly would cause many, if not all of these lending institutions to close shop, you can expect a hungry mass of these small investors mostly senior citizens angrily trooping to the gates of the Department of Education. And my "tukayo" Secretary Butch Abad would really have quite a problem in his hands, which is not actually of his own doing. Well, not of his doing, only if he does something about it soon. And I guess, it’ll have to be very soon, Mr. Secretary.
I’m sure the country’s gun aficionados will again come in droves to come, see and handle all the various wares on display and for sale right at the gun show. I remember having spent almost a full day the last time just looking around.
I hope to see all of you fellow buffs there.
Mabuhay!!! Be proud to be a Filipino.
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