OWWA Amnesty Program for Livelihood Loan Penalties

The memorandum is issued pursuant to Executive Order No. 329 dated December 29, 2000, which declares an amnesty program for OWWA’s direct-lending operations in livelihood development.
The program is implemented in the interest of the service through guidelines and procedures for concerned offices and loan accounts.

The amnesty program applies to livelihood loans released under three loan facilities:
- National Livelihood Support Fund (NLSF),
- Expanded Livelihood Fund (ELF), and
- Non-collateralized Loan Fund.
The amnesty program covers OFW livelihood availees, including dependents, who availed of livelihood loans on behalf of OFWs.
The program applies to covered borrowers with arrearages as of the effectivity of the memorandum, subject to processing and action under the stated guidelines and rules.
Applications for penalty condonation must be addressed to the Regional OWWA Units (ROU) where the livelihood loan accounts originated.

The amount to be condoned includes all penalties on delinquent loans.
Alternatively, the amount to be condoned includes the remainder of the total outstanding balance.
The condonation covers the sum of unpaid principal and interests included in the outstanding delinquency package.

To qualify for penalty condonation, delinquent borrowers must settle a minimum of 20% of their unpaid principal and interests.
The 20% requirement is a precondition for acceptance into the Amnesty Program.
Borrowers may comply through either of these payment methods upon application:
- Full payment of the required fraction upon application; or
- Staggered payment of the required fraction over a specified period commensurate to the unpaid principal and interests.

The payment period for staggered settlement of the required fraction is determined by the unpaid principal and interest level:
- P100,001.00 and above — six months
- P80.001 - P100.000.00 — five months
- P60.001 - P80,000.00 — four months
- P40.001 - P60,000.00 — three months
- P20.001 - P40,000.00 — two months
- P20.000 and below — one payment only
Penalties are excluded in determining the base amount used for computing the required fraction.
The base amount is the sum of the unpaid principal and interest, and it is used to compute the required 20% precondition.

The amnesty program is implemented in stages:
- The borrower/loan availee applies in writing for acceptance to the Amnesty Program at the appropriate ROU.
- After orientation on the guidelines, the loan availee selects the preferred means to settle the initial 20%.
- The application is evaluated by the Project Officer/Evaluator and submitted with recommendations to the Regional Supervisor for action.
- Upon approval, all penalties are deemed condoned.
Penalty condonation is ineffectual if there is non-compliance with or non-completion of the succeeding provisions of the amnesty package.
After penalty condonation, the outstanding balance is restructured up to a maximum term of three (3) years, considering:
- the amount of unpaid principal and interests to be settled; and
- the cash flow of the assisted business (if still existing) or the borrower’s capacity to pay.
The restructured account begins only after:
- completion of the 20% initial payment, and
- official approval of the application for penalty condonation.
The restructured account uses the current interest rates of the modified livelihood program for the adjusted repayment period.
A promissory note for the restructured account is prepared by the concerned ROU and is notarized at the expense of the applicant.

The restructuring applies after the penalty condonation and is limited to a maximum term of three (3) years.
Current interest rates govern the adjusted repayment period for the restructured account.
Foreclosure/cancellation consequences attach if the program is not successfully availed or completed (see next section).

Borrowers who fail to avail of the Amnesty Program or fail to complete the initial application phase have their accounts automatically become due and demandable.
Such due and demandable accounts are subject to immediate foreclosure/cancellation.
In a case of a non-completed term of payment under the amnesty program, partial payments are applied in this order:
1. penalties,
2. interest, and
3. principal.

Borrowers with accounts already foreclosed with property titles or proofs of ownership in case of chattel mortgage, but whose titles/proofs are still not consolidated in the name of OWWA, may avail of the program if they pay all expenses relative to the foreclosure plus the accrued interest on the loan from the time of foreclosure.
Foreclosure proceedings are suspended during the effectivity of the Amnesty Program to allow borrowers to avail of the benefits of the program.
Exceptional amnesty program loan cases that cannot be resolved at the regional level may be referred to the Office of the Administrator for resolution.

Collections resulting from implementation of the Amnesty Program are retained in the ROUs as part of the Expanded Livelihood Development Program’s financial resources.
Collections from NLSF and ELF accounts (whether individual or group projects) augment existing funds of the LDPOs Direct Lending For Individual Entrepreneurs.
Collections from Non-collateralized accounts augment existing funds of the Re-Entry Loan for Displaced Workers.

There are no processing or other fees charged to availees under the Amnesty Program.

The memorandum is adopted on February 23, 2001 by (SGD.) VIRGINIA DG. SON, Officer-in-Charge.
It requires that loan availees avail within one year upon signing and after publication requirements are complied with.
It accepts applications until the last day of implementation of Executive Order No. 329 to ensure full accommodation of applicants within the executive order’s operational period.