Definitions of Key Terms
- Basic Monthly Salary: fixed monthly pay of the employee.
- Date of Loan Granting: date loan is logged in GSIS system.
- Up-to-date Account: loan payable on schedule with theoretical balance or less.
- Account in Arrears: unpaid amortizations up to 6 months.
- Account Default: arrears exceeding 6 months.
- Theoretical Balance: balance if all amortizations paid on schedule.
- Permanent Regular Members: permanent employees with mandatory contributions.
- Non-Permanent Regular Members: non-permanent employees with mandatory contributions.
Eligible Borrowers
- Active regular and special members without pending cases, with at least 3 premium payments in last 6 months.
- Members of suspended agencies disqualified until suspension lifted.
Application Process
- Applications mostly through GW@PS kiosks; over-the-counter only if kiosk unavailable.
- Personal filing with eCard/UMID required.
Certification and Processing
- Agency Authorized Officers must electronically certify the applicant’s active employment, absence of cases, accuracy of info, and net take-home pay compliance.
- Certification valid for 7 days; unacted applications cancelled with email notice.
Loan Consolidation and Waiver of Penalties
- Consolidates salary loans, restructured or enhanced salary loans, emergency loans, and summer salary loans.
- Full liquidation of outstanding balances including waiver of penalties and surcharges upon approval.
Loan Amount and Eligibility
- Minimum loan amount: Php15,000.
- Maximum loan depends on Period with Paid Premiums (PPP) and Basic Monthly Salary, ranging from 3x to 14x BMS.
- Minimum loan must cover 105% of outstanding balances if higher than maximum loan amount.
- Special members (e.g., Judges) have 10x BMS limit, subject to MOA.
Amortization and Due Dates
- Monthly amortization due on or before the 10th day of month following the due month.
- If loan granted on/before 23rd, first payment due next calendar month; if after 23rd, due second following month.
Interest Computation
- 12% per annum, compounded annually on diminishing balance.
- Pro-rata interest from loan granting to month-end deducted in advance.
- Detailed formulas provided for new loans and renewals.
Redemption Insurance (RI)
- Insurance to cover loan balance upon member’s untimely death.
- Monthly RI premium rate varies by loan term (0.29 to 0.46 per Php 1,000).
- Advance RI premium deducted from proceeds (1 or 2 months depending on date).
- RI benefits full loan payoff if account up-to-date; covers theoretical balance if in arrears; lapses if in default.
- No RI premiums charged on benefits paid to deceased or heirs.
Fees and Deductions
- Service fee: 1% of incremental gross loan amount.
- Renewal fee: 1% of outstanding loan balance.
- Processing fee: Php50.
- Net proceeds computed after deducting outstanding balances, interest, RI premium, fees, and arrearages.
Loan Terms
- Permanent regular members: max 6 years for <10 years PPP; max 10 years for ≥10 years PPP.
- Non-permanent regular members: max 2 years for <10 years PPP; max 6 years for ≥10 years PPP.
- Special members: max 10 years, subject to MOA.
- Borrowers can opt for shorter loan terms in yearly increments.
Monthly Amortization Calculation
- Includes principal and monthly RI premium.
- Uses annuity factor derived from monthly interest rate and term.
Loan Disbursement and Payment Mechanism
- Loan proceeds credited directly to eCard account.
- Monthly amortization paid via payroll deduction.
- Agencies send weekly notices and monthly billing statements.
- GSIS monitors loan repayment and advises resumption if deductions stop.
- Members pay directly if excluded from payroll or on leave without pay, etc.
Application of Payments
- Payment priority: redemption insurance premium, principal, interest, then penalty.
- Move-up policy applies to arrears, ensuring earliest unpaid amounts settled first.
- Excess payments applied as advance principal payments.
Loan Renewal and Penalties
- Loan renewal allowed with net proceeds covering prior balances.
- If account in arrears: interest and penalties charged (1% monthly penalty).
- In default: higher penalty of 6% per annum compounded monthly applies.
Pre-Termination and Cancellation
- Pre-termination allowed by full balance payment before term ends.
- Loans cannot be cancelled once credited but may be pre-terminated without refund of fees.
Compulsory Pre-Termination
- Occurs upon death, resignation, disability, retirement, or separation.
- Outstanding balance due and collectible from benefits or heirs.
- Retirees may opt for Choice of Loan Amortization Schedule for Pensioners (CLASP).
Default and Consequences
- Default makes outstanding balance immediately due.
- Interest at 12% per annum compounded monthly plus 6% penalty applied from default date.
GSIS Recovery Rights
- GSIS can recover loan amounts credited erroneously or due to fraud/misrepresentation through legal means.
Overpayment and Accounting
- Overpayments after loan term treated according to excess payment policy.
- Controller Group to provide pro-forma accounting entries.
Reporting and Information Dissemination
- IT Services to generate monthly monitoring reports.
- Corporate Communications to prepare information materials for program awareness.
System and Documentation
- IT Services to support system automation and reporting.
- Manual of Operations updated to conform with guidelines.
- Revised Terms and Conditions and loan forms prepared and circulated.
Effective Date
- This PPG supersedes earlier versions and takes effect immediately upon approval on April 30, 2015.