MANILA, Philippines - The Social Security System (SSS) is giving members an option to settle their outstanding stock investment loans as part of efforts to reduce delinquent accounts and bad debt, and increase revenue.
According to the SSS, interested members must execute a Special Power of Attorney authorizing the state pension fund to sell his or her shares of stocks at the prevailing market price, based on the quotation of an accredited broker and subject to the usual broker’s commission, taxes and other fees.
The net proceeds from the sale of the shares could then be used to cover member’s outstanding loans.
As of the end of December last year, there were 3,037 members with delinquent accounts under its Stock Investment Loan Program (SILP), with the total investment amounting to P304.44 million, inclusive of penalties and interest.
There were also 5,755 delinquent loan accounts under the agency’s Privatization Fund Loan Program (PFLP). The receivables due totaled P304.19 million as of December 31, 2014.
May Catherine Ciriaco, SSS senior vice president and concurrent officer-in-charge for lending and asset management, said despite loan condonation programs offered in the past, there were still a number of SSS members who allowed their SILP and PFLP loans to balloon to staggering amounts due to penalties and interest.
Ciriaco said any excess amount after application to the outstanding SILP/PFLP loan balance would be applied to the delinquent salary or housing loan of the concerned members, if any.
“If none, or if there is still excess amount, then this will be refunded to the member-borrower,” she added.
However, if the net proceeds from the sale of the member-borrower’s shares of stock are not sufficient to cover the outstanding SILP or PFLP loan balance, then the member would be required to pay the remaining amount either in cash, from a salary loan renewal, or from the final benefits (total disability, retirement, and death).
The remaining balance would continue to be charged with interest and penalties until fully paid.
“While this is not the condonation program that members are waiting for, the option to sell program is the next best way for members to finally pay off their outstanding loans under the SILP and PFLP to ensure that they fully enjoy their SSS benefits without deductions,” Ciriaco said.
Last September, the SSS approved the option to sell shares of stocks as a way to decrease delinquencies amounting to over P608.63 million.
The SILP was offered in the late 1980s to give its members an opportunity to invest in the stock market. Similarly in 1994, SSS launched the PFLP to enable its members to participate in the initial public offering of Petron Corp. which was then wholly-owned by government.
The PFLP also covered shares of power utility giant Manila Electric Co. (Meralco) which the government was disposing at that time.
Members who wish to avail of this program may contract Teresita Badiola or Ma. Divina Cadorna at the SILP Section of the SSS member loans department or call 435-9862.