SSS launches low-interest loan program to avoid ‘Sangla-ATM’

MANILA, Philippines — The Social Security System (SSS) on Tuesday urged its retiree-pensioners to avail of the agency’s low-interest pension loan program (PLP) to cover their financial needs instead of borrowing from “Sangla-ATM” money lenders.

“ATM-Sangla” borrowing is a loan scheme in which a person would need to surrender his/her ATM card until the money borrowed is paid. Its interest is usually high and may reach up to 20%.

Rolando Macasaet, president and chief executive officer of SSS, announced the launching of the PLP for private sector workers, which features a notably low annual interest rate of 10%, distinctly more favorable compared to the rates charged by other loan providers.

“Aside from low-interest rate, SSS will not require them to surrender their ATM cards as collaterals, unlike the practice of some private lending institutions. We also do not charge any processing or service fee when they avail of the pension loan,” Macasaet said.

Eligible retiree-pensioners have the option to secure a loan amount ranging from three, six, nine to 12 times their basic monthly pension, including the additional P1,000 benefit, or their combined monthly pension, with a maximum loan cap of P200,000.

SSS also said that they will ensure that the retiree-pensioners’ net take-home pension is at least 47.25% of their aggregate monthly pension when they start paying the monthly amortization for the pension loan.

To be eligible for the PLP, retiree-pensioners of the SSS must satisfy the following criteria:

For individuals utilizing the PLP, the initial monthly payment for pension loans is expected in the second month following the approval of the loan by SSS.

Additionally, the 1% service fee is omitted to assist in covering the expense of the borrower's premium for Credit Life Insurance.

Upon approval, the funds from the loan will be deposited into their designated bank account or UnionBank quick card. This process takes three working days for online applications and five working days for those submitted in person at an SSS branch.