The Social Security System (SSS) announced a fresh borrowing program for pensioners worth up to ₱200,000.
In celebration of the Elderly Filipino Week, the state-run pension fund for private sector workers unveiled its enhanced pension loan program for its over 1.5 million retiree members.
SSS President and Chief Executive Officer Aurora Ignacio said on Friday that retirees can borrow up to 12 times the value of their basic monthly pension plus the additional ₱1,000 benefit granted to pensioners.
A retired SSS member can also avail of loans worth triple, six times, and nine times worth his monthly pension plus the ₱1,000 benefit. The amount must be repaid within six, 12, or 24 months, which starts on the second month after the loan is granted.
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To qualify, borrowers must be 85 years old or younger by the end of the loan term, and must have no outstanding dues or loan balances from the SSS. This also covers advance pensions secured through the SSS calamity package, which means that a borrower must be on "active" status and is receiving his regular monthly pension.
Ignacio said the updated loan program allows bigger credit lines and longer maturities to discourage cash-trapped senior citizens "from transacting with loan organizations which charge steep interest rates."
The SSS loan charges 10 percent as an annual interest rate, Ignacio added. This is steeper than what banks offer but is half the 20 percent collected by the "5/6" informal lenders and loan sharks.
Last year's pension loan program amounted to ₱1.4 billion for 59,224 borrowers as of end-September, according to SSS data.
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This article first appeared on CNN Philippines.
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