State-run pension fund Social Security System (SSS) has given its members with outstanding loans under two programs the option to sell their shares of stocks to partly or fully settle their liabilities.
“Despite loan condonation programs that we have offered in the past, there are still quite a number of SSS members who have let their unpaid Stock Investment Loan Program (SILP) and Privatization Fund Loan Program (PFLP) loans balloon to staggering amounts due to penalties and interest,” May Catherine Ciriaco, SSS senior vice president and officer-in-charge for lending and asset management, said in a statement.
The latest SSS data showed that as of the end of 2014, delinquent PFLP loans plus their interests and penalties hit P304.19 million from 5,755 accounts.
In the meantime, delinquent SILP loans plus penalties and interest charges reached P304.44 million from 3,037 accounts.
Last September, the Social Security Commission gave its go ahead allowing the option to sell shares of stocks in order to slash these delinquent PFLP and SILP loans now worth a total of P608.63 million, the SSS noted.
Under this option, member-borrowers should execute a special power of attorney that will authorize the SSS to sell his stocks at the prevailing market price, the net proceeds of which will be applied to his outstanding loan.
“Any excess amount after application to the outstanding SILP/PFLP loan balance will be applied to his delinquent salary or housing loan, if any. If none, or if there is still excess amount, then this will be refunded to the member-borrower,” Ciriaco added.
But the SSS said that if the net proceeds would be insufficient to pay the outstanding loan balance, the member would have to shell out the remaining amount in cash, from salary loan renewal, or from final benefits such as total disability, retirement and death.
The balance will also be continuously slapped with interest as well as penalties until paid in full, the SSS added.
To recall, the SSS offered SILP in the late 1980s to allow its members to invest in the stock market, while PFLP was rolled out in 1994 for members to participate in the initial public offering of then government-owned Petron Corp. and buy shares of Manila Electric Co. or Meralco that were being disposed of by the SSS during that time.
“The option to sell program is the next best way for members to finally pay their outstanding loans under the SILP and PFLP to ensure that they fully enjoy their SSS benefits without deductions,” according to Ciriaco.