What is the loan moratorium program that the Government Service Insurance System (GSIS) has recently implemented?
The latest GSIS loan moratorium is an automatic deferment of loan payment, without interest and penalties, that the GSIS has granted to its members and pensioners in areas that were hit hardest by supertyphoon Yolanda. The GSIS Board of Trustees approved the moratorium program under Resolution No. 129 on November 28, 2013 to enable GSIS members and pensioners to use the fund in recovering and rebuilding their lives.
What period is covered by the moratorium?
It covers six months from November 2013 to April 2014. The loan payment term is therefore extended by a maximum of six months, including emergency loans that were granted from November 15, 2013 to December 31, 2013.
Who are covered by the moratorium?
All active members and pensioners who are residing or working in the worst-hit calamity areas are entitled to the benefits of the program.
To determine the eligibility of borrowers, GSIS will refer to the addresses of members and pensioners (places of residence and work) as recorded in the GSIS Membership database as of October 31, 2013.
To identify the worst-hit calamity areas, the following parameters or criteria were considered:
- The city or municipality should be within the typhoon path based on the report of the National Disaster Risk Reduction Management Council (NDRRMC);
- The city or municipality should have been declared as worst or hardest hit calamity area through a resolution issued by the Sangguniang Panlalawigan or Panlungsod, or by the appropriate city or municipal council certified by the Office of the Provincial Governor or Administrator, or through a certification issued by the provincial governor or administrator.
What loans are covered under the moratorium?
- Active loan accounts as of October 31, 2013
All active loan accounts – whether or not the account has arrears as of October 31, 2013 – are covered under this program. These are the following:
- Consolidated loan
- eCard cash advance
- Pension loan
- Pensioner’s restructured loan
- Policy loan
- Emergency loan
- Enhanced salary loan
- Educational assistance loan
- Summer one-month salary loan
- Housing loan (deed of conditional sale and real estate loan)
- Loans granted from November 1, 2013 to December 31, 2013
All loans granted within the above-mentioned period, including those under the newly offered Pensioners’ Emergency Loan, are covered under this program. The payment of the first amortization is deferred up to April 30, 2014, and the corresponding amortization will be included in the May 2014 billing, which will be due on or before June 10, 2014.
What loans are not covered by the moratorium?
All loans granted beginning January 1, 2014 are not be covered by this program.
Should members file a request or application to be covered by the moratorium?
No, qualified borrowers will be electronically identified based on the qualifications or parameters prescribed in No. 3 above. Thus, members and pensioners in the worst-hit calamity areas are automatically covered by the moratorium and need not file a request or application to GSIS. The System will also notify in writing qualified borrowers, along with their respective administrative or finance officers and authorized administrative officers (AAOs), regarding their entitlement to the moratorium, as well as provide them the prescribed guidelines and other information materials about the program.
How will the loan deduction be stopped?
For borrowers whose payment of monthly amortization is through payroll deduction
The administrative or finance officer will immediately cause the temporary stoppage of deduction upon effectivity of this program. Any remittance made during the moratorium period will be applied to the outstanding balance of the loan following the order of priority in application of payments (that is, penalties or surcharges first; insurance; interest; and principal).
For borrowers of housing loan whose payment of monthly amortization is through postdated checks (PDCs)
The GSIS will inform them in writing that they should retrieve their PDCs from the GSIS Treasury Unit and replace the PDCs they retrieved not later than April 1, 2014.
When will the loan deduction resume?
After the end of the moratorium period on April 30, 2014, the administrative or finance officer, without need of notice from the GSIS, will resume the deduction of the monthly loan amortization in the May 2014 payroll, and will remit the same not later than June 10, 2014. Housing loan borrowers who are paying “over-the-counter” should likewise resume paying the required monthly amortization starting May 2014. The existing policy on declaring accounts in default should apply after the end of the moratorium period.
What happens to the billing and collection activities during the moratorium period?
The system generation of monthly amortization billing for the covered loan accounts, and the sending of the monthly billing, demand letters, and collection notices to the qualified borrowers are suspended during the moratorium period.
What happens if a member retires or is separated within the moratorium period?
The Choice of Loan Amortization Schedule for Pensioners (CLASP) would still be offered to qualified borrowers who will be retiring or separated from the service within the moratorium period.
How about the insurance cover during the moratorium period?
The fire insurance (FI) and loan redemption insurance (LRI) coverage will continue to be enforced during the moratorium period. Premiums due during the moratorium period should be paid in full on or before June 10, 2014. In case of retirement, resignation, or separation from the service, or demise of the borrower during the moratorium period, the proportionate FI and LRI will be deducted from any claims or benefits of the insured.
What happens to loan payments the GSIS received during the moratorium period?
Any payment or remittance received during the moratorium period that are intended to settle amortizations for a qualified loan account will be applied directly to the outstanding balance of the loan.
Application of payment should follow the order of priority below, on a monthly basis and starting from the oldest month to the current month, as follows:
1st : Penalties or surcharges, if any
3rd : Interest
4th : Principal