BSP eyes longer salary loan repayment terms
Bangko Sentral ng Pilipinas
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is studying possible changes to rules on salary loans, including longer repayment terms, amid growing calls for more flexible payment schedules, especially from teachers.
“The BSP is studying possible amendments to regulations governing salary-based general purpose consumption loans, particularly the rules on repayment terms,” the central bank said in response to questions from consumers on its social media pages.
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It did not immediately respond to the Inquirer’s request for more details on the review.
The study comes amid mounting calls from teachers to extend repayment periods for salary loans to up to 10 years to ease their debt burden.
Automatic deduction
The Department of Education (DepEd) has an Automatic Payroll Deduction System, or APDS, that regulates salary deductions for teachers and staff, mainly to repay loans from accredited lending companies.
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Under current BSP guidelines, the standard repayment term for salary loans is three years, extendable to five years in special cases. The rules were set in 2015, back when the central bank tightened regulations on salary loans to address potential vulnerabilities in the financial system and safeguard stability.
In a Jan. 30 letter to BSP Governor Eli Remolona Jr., Education Secretary Sonny Angara sought guidance on whether there may be room to study, review or pilot more flexible loan structures for salary-based borrowers like teachers and education workers.
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Alternative mechanisms
Angara also asked the BSP to explore alternative mechanisms that would allow longer repayment periods without undermining its mandate to promote financial stability. The DepEd, he said, stands ready to provide data and policy inputs to the central bank.
“We raise this matter not merely as an administrative concern, but as a reflection of the lived realities of our teachers and education workers, whose financial well-being is closely linked to their capacity to deliver quality education,” Angara told Remolona.
Meanwhile, the Alliance of Concerned Teachers has said the DepEd should also push to raise the entry-level pay of teachers to P50,000. The group said raising salaries is a longer-term solution to the financial difficulties of education workers.
Data from the BSP showed that total outstanding salary-based loans from big banks amounted to P166.8 billion as of 2025, up 5.6 percent from a year earlier. INQ
