Recto approves lower interest rates, faster processing for SSS calamity loans

Department of Finance (DOF) Secretary and Social Security Commission ex-officio Ralph Recto has authorized the lower interest rates and faster activation process of the Social Security System’s (SSS) Calamity Loan Program (CLP) to speed up financial aid for members in disaster-hit areas.

Following President Ferdinand R. Marcos Jr.’s directive, SSS announced on June 25 that it would be implementing the revised CLP Guidelines to help its members affected by various natural disasters, including Tropical Storm Crising and the succeeding typhoons Dante and Emong, which struck various parts of the country with heavy rains and strong winds.

Covered areas include Cavite, Quezon City, Umingan in Pangasinan, and Calumpit in Bulacan.

Under the revised program, the SSS will enhance the delivery of financial assistance by granting the reduction of the interest rates for calamity loans from the current rate of 10 percent to seven percent per annum. 

The lowered interest rate is said to be available to the eligible members who have a good credit history, including those borrowers who have not received any penalty condonation within the last five years. 

Recto stated that included in the revised guidelines include the streamlining of the release process, which will allow the members to activate the program within seven working days prior to the calamity event date, compared to the previous activation period of one month.

“This is very good news for our fellow Filipinos in need of urgent financial assistance. Before, it took a month to receive the loan; now it only takes seven days. On top of that, we’ve also lowered the interest rate to make it more affordable,” said Recto, who is also Social Security Commission ex-officio chair.

The calamity loan is payable for as long as two years, with the installment spread across 24  monthly bills.

Repayment will begin in the month following the loan’s approval with a one percent service fee deductible from the total loanable amount.

The agency stressed that the loan can be renewed six months after the previous loan as long as the borrowers ensure on-time payments for their existing calamity loan. 

In addition, the loan proceeds will be released through the member’s active Unified Multi-Purpose ID (UMID) ATM Cards or through any active single account of the borrower in any PESONet participating banks, furtherly ensuring transparency and efficiency throughout the process. 

Eligible applicants are given a 30-day availment period after the announcement of the CLP to acquire the program. 

To complement the assistance delivery, the Government Service Insurance System also opened its emergency loan program for its members affected by the typhoon. 

In 2024, the Social Security System has already spent Php 10 billion in disbursing the calamity loans to its over 560,000 affected members. 

This year, the agency is set to allocate approximately Php 20 billion to further strengthen the procurement of the loan program.