The Social Security System (SSS) reduced the interest rates of its social and business loans to encourage more businesses, schools and hospitals to avail of SSS credit facilities and spur socioeconomic growth in the country, a top official said.
SSS President and Chief Executive Officer Romulo Neri said the adjustments, which took effect last July 1, follow the downward trend in banks' lending rates.
"We lowered our interest rates to generate more employment by helping enterprises expand their operations and members set up their own businesses," he said. "This also benefits companies affected by the global financial crisis."
SSS cut down interest rates from 6 percent to 5.5 percent for loans with a term of one year or less; from 7 percent to 6.25 percent for a term of over one to three years; from 8 to 7 percent for more than three to five years, and from 9 percent to 8.5 percent for over five to ten years.
The pension fund offers loans of up to P50 million under the Special Financial Program for small and medium enterprises, while large-scale companies can borrow P51 million to P500 million under the Industry Loan Program. SSS offers special loans to tourism projects, hospitals and educational institutions, including vocational and technical schools.
Neri said interest rates are fixed for loans with a term of five years or less, while interest rates of loans with longer terms are subjected to review after five years.
SSS business and social loans are coursed through the pension fund's accredited banks, which charge a spread of not more than 4 percent, he said.
"SSS has released a total of P305 million in social development and business loans so far this year," he said.
"Within a span of two decades, SSS granted more than P22 billion in loans to fund over 5,000 projects, which has generated nearly 100,000 jobs, benefited over 168,000 students and created 4,100 additional hospital beds all over the country," Neri said.
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