MANILA, Philippines - The Social Security System (SSS) has declared a moratorium on housing and loan payments of members in storm-ravaged Eastern Visayas as part of government’s efforts to help victims recover from the devastation and trauma.
The move came after President Aquino directed all government financial institutions to grant a six-month freeze on loan payments of Super Typhoon Yolanda survivors. He also asked state-owned firms to extend interest-free loans to individuals and entities directly affected by the disaster.
The loan moratorium will be implemented for a period of eight months or from November 2013 to June 2014. It will benefit only calamity-hit borrowers with housing, salary and other short-term member loans, as well as those paying for acquired SSS housing assets in monthly installments.
“The moratorium gives affected borrowers an eight-month grace period on loan payments due to the adjustment in their due date. This will help them use their limited funds for their subsistence needs and rebuilding expenses, without their worrying about the monthly loan penalty of one percent,†SSS added.
The state pension fund likewise cut the interest rate for amortizations within the moratorium period to one percent per annum. The reduction is still within the SSS charter’s requirement for investments to earn no less than the average treasury bill rate, the SSS pointed out.
The applicable interest rate for new salary loans and Salary Loan Early Renewal Program (SLERP) availments under the enhanced relief package will also be one percent per annum, lower than the regular rate of 10 percent. Loan repayment will start on the sixth month after the loan grant, instead of the usual two-month grace period before the start of loan amortization.
As for loan renewals under the SLERP, deductions from the loan proceeds shall only include the outstanding principal and interest. Accrued penalties, if any, will not bear any interest and may be incorporated into the monthly amortizations of the new loan. Borrowers can directly claim their loan checks from the SSS branch where they filed their application for a quicker loan release.
The SSS has also extended the payment deadline for monthly contributions of calamity-stricken employers to April 2014 to allow affected companies to use their current resources for fully restoring their businesses.
The relaxed payment terms for contributions and loans are among the recent enhancements in the SSS calamity relief package for victims of Yolanda, as approved by the Social Security Commission (SSC) on Nov. 27. These cover specifically areas in central Philippines declared by the National Disaster Risk Reduction and Management Council (NDRRMC) under a state of calamity, such as Leyte, Bacolod, Samar, Palawan, Aklan, Antique, Capiz, Iloilo and Cebu.
Resumption of regular payment deadlines for employer contributions will take effect in April 2014 onwards. Companies that remain non-operational after March 2014 must submit an accomplished SSS Form R-8 (Employer Data Change Request), along with supporting documents, to suspend or terminate their membership with SSS.
The enhanced relief package also includes increase in advance pensions to six months from the original three months for calamity-stricken pensioners. SSS also waived the P300 replacement fee for members who lost their SSS IDs or Unified Multi-purpose Identification System (UMID) cards during the typhoon.
Typhoon Yolanda survivors have until April 30, 2014 to submit applications for SSS calamity relief package. Members interested in special house repair and improvement loan, on the other hand, have one year from the issuance date of the SSS circular to file their application.
Subsidies preferred
Meanwhile, Finance Secretary Cesar Purisima said the government is more inclined to grant subsidies and incentives to help businesses and individuals recover from Yolanda devastation than declare a moratorium on tax collections.
Purisima said the government’s economic team is studying a number of options to help calamity victims and businessmen rebuild from the typhoon damage.
“Our preference is to support with subsidies that address the viability and rehabilitation of issues and is more transparent. When companies make money in general that means they are viable and should pay taxes just like everyone,†Purisima said.
Among the options being considered are arranging soft loans and issuing a moratorium on debt payments.
On Tuesday, Sen. Juan Victor Ejercito proposed a two-year moratorium on tax payments by Yolanda survivors to help them restore damaged homes and livelihood. The tax relief is meant to protect disaster victims from penalties for their failure to comply with national tax laws, Ejercito said. Existing tax laws, however, do not allow tax moratorium.
The cost of rebuilding the typhoon-devastated areas is estimated to reach as much as P250 billion.
Purisima has also called on the local banking industry as well as the country’s businessmen to help the government in its efforts to speed up the economic recovery of the storm-battered areas in the Visayas.
He said the banking community should come up with a package that will make it easier for business establishments and millions of Filipinos affected by the super typhoon to rise above the crisis.
The National Economic and Development Authority is finalizing a master plan for the massive rehabilitation of Eastern Visayas.
Yolanda barreled through most of the Visayas, causing large-scale destruction, killing thousands of people and destroying homes, major infrastructure, farmland and businesses that accounted for 2.2 percent of the country’s gross domestic product.