Members urged to sell SSS stock shares for loan payment
MANILA, Philippines – Despite the loan condonation program offered by the Social Security System (SSS) in the past, there are still some members who let their loans balloon under the Stock Investment Loan Program (SILP) and the Privatization Fund Loan Program (PFLP).
Thus, SSS is encouraging them to avail of the option to sell their shares of stocks under the said programs.
In the late 1980s, SSS offered the SILP to members as an opportunity to invest in the stock market.
As of end-2014, there are 3,037 delinquent SILP loan accounts, amounting to P304.44 million ($6.87 million), inclusive of penalties and interest.
In 1994, PFLP was offered to enable SSS members to participate in the initial public offering of Petron shares which at that time was entirely state-owned.
The PFLP was also open to SSS members who were interested in buying shares of stock of the Manila Electric Company (Meralco) that it was disposing at that time.
To date, there are 5,755 delinquent PFLP loan accounts, totaling P304.19 million ($6.86 million), with penalties and interest.
In September 2014, the Social Security Commission approved the option to sell shares of stocks to lessen these delinquent accounts that total over P608.63 million ($13.74 million).
How to sell shares
Under the option to sell shares, the member-borrower will execute a Special Power of Attorney authorizing the SSS to sell his shares of stocks at the prevailing market price, based on the quotation of an accredited broker and subject to the usual broker’s commission, taxes, and other fees.
Net proceeds from the sale of the shares of stocks will then be applied to the member’s outstanding SILP or PFLP loan balance.
“Any excess amount after application to the outstanding SILP/PFLP loan balance will be applied to his delinquent salary or housing loan, if any,” SSS senior vice president May Catherine Ciriaco said.
If none, or if there is still excess amount, then this will be refunded to the member-borrower, Ciriaco added.
The member though shall be required to pay the remaining amount either in cash, from a salary loan renewal, or from the final benefits (total disability, retirement, and death), if the net proceeds from the sale of the shares of stock are not sufficient to cover the outstanding SILP or PFLP loan balance.
However, the remaining balance will continue to be charged with interest and penalties until fully paid, SSS said.
Ciriaco clarifies that the option to sell shares is not the condonation program the members are waiting for, but it is the next best way for members to finally pay off their outstanding loans under the SILP and PFLP to ensure that they fully enjoy their SSS benefits without deductions. – Rappler.com
US$1 = P44.31