SSS sour loans now P27.51 billion

Delinquency in payment of loans to the Social Security System (SSS) turned for the worse under the watch of NBN-ZTE scandal witness Romulo Neri who had been tasked in the previous administration to improve the state-owned firm’s financial performance, the Commission on Audit (CoA) reported.

In the 2009 SSS audit report released recently, the state audit body also revealed that 11,436 checks amounting to P313.47 million “bounced” or were issued without sufficient funds as of audit period that ended December 31, 2009.

Of the total number of outstanding dishonored checks, at least 7,013 checks have been referred to the SSS legal department for possible legal action.

CoA records show that the already poor loan repayment efficiency of the SSS has worsened when Neri headed the agency as its president in 2009.

The delinquency rate increased at an average of 5.86 percent per year since 2004 “due to inadequate enforcement of collection strategies.”

The 2009 SSS annual audit report prepared by a team of auditors headed by CoA Director Luz Loreto Tolentino indicated that a “significant increase of delinquent salary/educational/ calamity/separated/emergency (SECSE) loans from P20.73 billion in 2004 to P27.51 billion in 2008.”

Tolentino said the 2009 figure already represents 62.38 percent of the total SECSE account or a total 6,684,653 accounts.

“An account is considered delinquent by management when the borrower fails to pay his loan amortization on the month it is due,” the audit report explained.

State auditors revealed that despite the implementation of a loan condonation program from October 1, 2004 to October 31, 2009, the delinquent loans remained high.

The program disregarded collection of imposable surcharges on delinquent loans.

However, easing loan repayment failed to reduce delinquency.

“Total collection for principal loans of P2,173,413,291 for the last five years was only 7.90 percent of the total delinquent loans,” CoA stated.

Government auditors asked SSS to intensify efforts to collect delinquent loans and consider preparing collection efficiency rating to monitor the status of payments.

In the same report, CoA auditors also chided the SSS for failing to immediately record repayments for salary loans, mainly as a result of the delayed or non-submission of collection lists by employers.

On the other hand, the SSS management was noted to be likewise delinquent in refunding SECSE loan overpayments made by borrowers.

According to CoA, a total P979.49 million remained in the SSS coffers despite the fact that the amount represent loan overpayments made by a total 2,191,005 members who borrowed money.

“Most of the members avail of SSS short-term loans because of financial needs. Giving back immediately their loan overpayments is equally important to them,” the state audit agency said. –BEN R. ROSARIO, Manila Bulletin