MANILA, Philippines — The Social Security System (SSS) has announced that loan borrowers with overdue payments will now receive text message notifications about their remittance responsibilities.
In a statement on Wednesday, the SSS reminded members with short-term loans, such as salary or calamity loans, to settle their overdue balances to be eligible for future loans.
Pedro Baoy, SSS senior vice president for Lending and Asset Management, emphasized the importance of using short message service (SMS) to notify members.
“[This would ensure] they are promptly reminded whenever they miss their loan payments or have remained unsettled after its maturity date,” he said.
“We send loan billing statements to our member-borrowers through their registered email address. However, unlike reading text messages, most members do not open their email inboxes. Most of them carry their mobile phones wherever they go, so we saw text alerts as a great way to remind them,” Baoy added.
He clarified that SSS members who consistently update their monthly loan payments will not receive SMS notices. They will also maintain good standing with the SSS, allowing them to reapply for future loans.
Approved loans can be checked via My.SSS account. If the website is inaccessible to users, the SSS suggested seeking assistance from branch offices through their e-centers.
“If they miss their loan payments, they will be charged a one-percent monthly penalty on unpaid principal and interest until fully paid. If their loan remains unsettled for over five years, the incurred penalties will exceed the outstanding principal amount and interest. We do not want that to happen to our member-borrowers, so we are helping them avoid reaching that situation,” Baoy said.
Members must inform their new possible employers about their SSS loan obligations to be able to deduct the loan payments from their salary. This includes interest or penalties accumulated by their late remittance.
To avoid penalties in the future, Baoy advised to apply for the Consolidation of Past Due Short-Term Member Loans with Condonation of Penalty, which merges the principal and interest of a member’s past-due short-term member loans into one program.
“All unpaid penalties shall be consolidated and condoned or waived upon full payment of the consolidated loan,” he said. “They can pay their consolidated obligations loan through a one-time payment or an installment plan.”
The condonation program will also cover outstanding loan obligations in a member’s salary, calamity, emergency, and restructured loans like the Salary Loan Early Renewal Program.
The installment scheme for this loan has a down payment that must be at least 10% of the consolidated loan, while the remaining balance can be paid for up to 60 months.
“The length of the installment term depends on the amount of the unpaid loan,” Baoy said.