By Merlina Hernando-Malipot
In line with its efforts to help teachers, the Department of Education (DepEd) is expanding the coverage of its Provident Fund, with revised guidelines in its implementation.
Education Secretary Leonor Briones said that many public school teachers and personnel are now suffering from unpaid loans with accumulated interests. “The damage of over-borrowing on the lives of teachers and their families has been going on for years and it can no longer continue,” she explained.
Among the solutions that DepEd is looking into is expanding the coverage of the Provident Fund which belongs to all employees of DepEd. “We want to add a lending facility wherein they can loan a limited amount but we will make sure that the interest will not be compounded and terms would be lower,” Briones said.
In support of this goal, Briones issued DepEd Order 52, s. 2017 or the “Amendments to DepEd Order Nos. 12 s. 2004 and 36, s. 2007 (Revised Implementing Guidelines for the DepEd Provident Fund).”
In the amended version, it is stated that: “Qualified co-terminus employees who have been in the service with DepEd for at least two years, inclusive of services rendered as Contract of Service (COS) within the last five years, if any, may avail of the PF loan up to a maximum principal amount of Fifty Thousand Pesos (P50,000.00) only, payable in equal monthly amortizations from 12 up to 24 months, at the option of the borrower, subject to his/her capacity to pay.”
In the revised version the “borrower shall be required one co-maker with the following qualifications with permanent status of employment: (1) has been in the service with the Department for at least one year, inclusive of services rendered as COS within the last five years, if any; (2) has a monthly basic salary of greater than or equal to that of the former’s monthly basic salary; and (3) not a co-maker for at least three PF loans with outstanding balances.”
The Section X, Item 10 of DO 12, s. 2004 was also amended.
In the revised version, it was stated that: “All types of loans shall have a contractual interest rate of six percent (6%) per annum, computed using the diminishing/declining balance method, wherein the interest per installment period is calculated based on the outstanding balance of the PF loan at the beginning of each installment period.”
In the amended version the “total amount due, inclusive of principal and interest, will be payable in equal monthly amortizations. The borrower may opt for a repayment period from 12 up to 60 months, subject to his/her capacity to pay. In all cases, repayment of loans shall be through automatic payroll deduction. For guidance, refer to Illustrations 1 to 5, for terms of loan of 1 to 5 years, respectively, and the corresponding notes.”