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Friday, March 20, 2009

SSS opens P500-M emergency loan window for displaced workers

Upon the direction of the President, the Social SecuritySystem (SSS) has set aside P500 million for emergency loans of up toP15,000 for workers who lost their jobs since the start of the yeardue to the global financial crisis, a top official said.

SSS President and Chief Executive Officer Romulo Neri said thefunds were sourced from the Employees’ Compensation (EC) program,which the pension fund administers with its counterpart in the publicsector, the Government Service Insurance System.

The state-run agency had already exceeded the limit set by theSSS charter, which limits short and medium term loans to members to nomore than 10 percent of its investment reserve fund. The SSS had tolook for other sources of funding.

“Practically all SSS annual contribution collections go tocovering the regular disbursements for members’ benefits,” he said.

Neri said borrowers would be given a 12-month grace periodbefore paying their amortization, which would be remitted to the SSSin 24 monthly installments. Members must be in good standing and havepaid at least twelve contributions before the month of separation fromemployment to qualify for the loan.

Members must present a certification from their former employervalidated by the Regional Director of the Department of Labor andEmployment covering the company as proof of separation from employment.

“The loan would be based on the members’ highest monthlysalary credit for the past six months before they were laid off,” Nerisaid, adding that the maximum loanable amount was set at P15,000 toallow more displaced workers to avail of the emergency loans.

The SSS administers the regular Social Security program, whichgrants sickness, maternity, disability, retirement and death benefitsto members, and the EC program, which provides additional compensationto employees with work-related injuries, sicknesses and death.

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