Over 270,000 employers to benefit from SSS loan amnesty
THE Social Security System (SSS) said more than 270,000 employers with an estimated workforce of seven million would benefit from the agency’s six-month amnesty program on loan penalties, which started on January 3, a top official said.
SSS President and Chief Executive Officer Emilio de Quiros Jr. said 54 percent or nearly 150,000 of the total delinquent employers, including large corporations employing thousands of workers, have offices in the National Capital Region.
“Many employers neglect their duty to remit monthly loan amortizations of employees, so they are still identified as delinquent even if their contribution payments are up-to-date,” he said. “The loan amnesty is a great opportunity for them to restore their good standing with SSS.”
The state-run institution charges a one percent monthly penalty for loan amortizations that miss the payment deadline, which falls on the tenth day after the applicable month. Delinquent loans incur accruing penalties and interest until fully paid.
The amnesty program, which will end on June 30, condones penalties on overdue loan principal and interest. Employers can remit their loan delinquency in full or through installment payments of up to 24 months, which carry a three percent annual interest.
De Quiros said four out of five delinquent loans belong to employed members, based on the profiling study of SSS’ over six million short-term loan accounts.
“Majority of delinquent borrowers are employees who pay contributions but not their loans,” he said. “The amnesty for employers directly targets the sector comprising the biggest chunk of unpaid loans, which in turn will help SSS cut down the overall delinquency of members.”
Employers collect and remit their employees’ loan payments through monthly payroll deductions, in line with the terms and conditions they agree to comply with when endorsing member loan applications, De Quiros said.
“Companies with delinquent loan amortizations, such as those that deduct loan payments from monthly salaries of workers without remitting them to SSS, are liable under the law and risk ruining their reputations as good corporate citizens,” he said.
Employers with overdue loan remittances would be unable to get an SSS clearance, which is a requirement in the annual renewal of business permits, and loan privileges of their employees will be suspended, De Quiros said.