The Social Security System has offered to sell in behalf of members shares of stocks they bought with SSS loans which they have not been able to pay for. The proceeds will be used to pay off their loans with any extra balance refunded to them.
The SSS said that delinquent loan accounts have ballooned to over P608 million.
Most of the unpaid loans were used to buy shares of stocks of Manila Electric Co. and Petron Corp.
In the late 1980s, SSS offered the SILP to give its members an opportunity to invest in the stock market.
Similarly, it offered PFLP in 1994 to enable its members to participate in the initial public offering of Petron shares which at that time was owned entirely by the government.
The SSS said as of December 31 of last year, there are 3,037 delinquent Stock Investment Loan Program (SILP) loan accounts, amounting to P304.44 million, inclusive of penalties and interest.
There are also 5,755 delinquent Privatization Fund Loan Program (PFLP) loan accounts, totaling P304.19 million, with penalties and interest.
Member borrowers will be asked to execute a Special Power of Attorney authorizing the SSS to sell his shares of stocks at the prevailing market price. The net proceeds from the sale of the shares of stocks will then be applied to the member’s outstanding SILP or PFLP loan balance.
If the net proceeds from the sale of the member-borrower’s shares of stock are not sufficient to cover the outstanding SILP or PFLP loan balance, then the member shall be required to pay the remaining amount either in cash, from a salary loan renewal, or from the final benefits (total disability, retirement and death).
The remaining balance will continue to be charged with interest and penalties until fully paid.
“While this is not the condonation program that members are waiting for, the Option to Sell program is the next best way for members to finally pay off their outstanding loans under the SILP and PFLP to ensure that they fully enjoy their SSS benefits without deductions,” SSS Senior Vice President and concurrent Officer-In-Charge for Lending and Asset Management May Catherine Ciriaco said.