Teachers’ group cries foul over loan deductions from take-home pay

Mara Cepeda
Teachers’ group cries foul over loan deductions from take-home pay

LeAnne Jazul

Education Secretary Leonor Briones says public school teachers' loans are now at P300 billion: 'Are you going to suffer the pain now and look for solutions or continue the same practice until your loans will accumulate?'

MANILA, Philippines – The Teachers’ Dignity Coalition (TDC) slammed an order released by the Department of Education (DepEd) allowing loan payments to be deducted from teachers’ salaries, leading to a meager take-home pay.

The coalition, composed of around 30,000 teachers, said DepEd Order No. 38, series of 2017 gives the go signal to deduct payments for Government Service Insurance System (GSIS) and Home Development Mutual Fund (Pag-IBIG Fund) loans from teachers’ salaries.

This has since led to several teachers receiving salaries way below the mandated net take-home pay (NTHP) of P4,000 since the DepEd order’s release on July 31. (READ: Recto: Keep DepEd P30-B budget to increase teachers’ allowances)

“In effect, many teachers, initially in Metro Manila, received less than P1,000 for the month of October. Most of the teachers who [sought] the help of the TDC discovered that they will only receive P600, some a little more than P300,” said the TDC in a statement.  

The DepEd order stated that new salary deductions may not be allowed if these would reduce the NTHP of borrowing employees to an amount lower than the P4,000 threshold. 

But the same order also stated that “deductions already incorporated in the payroll, shall be continued, even if this effectively reduces the NTHP to lower than the P4,000.00 threshold.” This is to comply with the constitutional guarantee that no law impairing the obligation of contracts shall be passed. 

“Otherwise, discontinuing or reducing existing deductions could result in the imposition of penalties upon borrowers that would be very disruptive, as it would require significant changes in the payroll system, and would also lead to unreasonable exercise of discretion as to which deductions should be retained or postponed,” reads the DepEd order.

Briones: Teachers need financial literacy 

The TDC had written a letter addressed to Education Secretary Leonor Briones on Sunday, October 22, asking her to consider lifting the order. 

They said it is “unimaginable” for a teacher’s family to survive on just P600. 

“Madam, we recognize that there is a problem [with] the mindset of most of our employees in relation [to] financial management, but we also believe that this abrupt and unforeseen solution of the DepEd creates more problems than solutions,” said the TDC in its letter.

“May we appeal for your consideration to immediately suspend the implementation of the DepEd Order No. 38, s. 2017 and initiate the widest consultation possible so that we will all be able to discuss the situation in the field and come up with a better solution.”

Briones addressed the TDC’s concerns during the Kapihan sa Manila Hotel forum on Monday, October 23. The Cabinet official said public school teachers now owe private lending institutions (PLIs) around P170 billion as of December 2016.  

Teachers also owe the GSIS P120 billion worth of loans. Briones said the GSIS has been complaining and is threatening to sue the DepEd and the teachers concerned if the loans remain unpaid. 

“Between GSIS and PLIs, teachers owe more than P300 billion and it is getting bigger and bigger so something has to be done,” Briones said. 

She explained teachers are aware that they have been overborrowing loans “and that the only reason they get P4,000 net is the GSIS loans are not being deducted.”

“They think that by just delaying payments, they are postponing it. But no, they are just postponing the pain. So the question is: Are you going to suffer the pain now and look for solutions or continue the same practice until your loans will accumulate?” asked Briones.

The DepEd chief also said the best solution to the problem would be to give teachers financial literacy classes. – Rappler.com

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Mara Cepeda

Mara Cepeda specializes in stories about politics and local governance. She covers the Office of the Vice President, the Senate, and the Philippine opposition. She is a 2021 fellow of the Asia Journalism Fellowship and the Reham al-Farra Memorial Journalism Fellowship of the UN. Got tips? Email her at mara.cepeda@rappler.com or tweet @maracepeda.