New SSS guidelines widen access to business, social loans

Social Security System (SSS) has cut down its interest rates and relaxed its lending requirements to enable more companies to avail themselves of its social and business loans, a top official said.

SSS president and chief executive officer Emilio de Quiros Jr. said the agency revised its loan guidelines to give companies easier access to credit, boost employment and expand SSS membership.

“The revised guidelines allow monthly adjustments of interest rates based on prevailing market rates. Our lending programs now offer their lowest rates since the launch of our first corporate loan facility in 1988,” he said.

The interest rate of loan granted will remain fixed for a period of one year. The loan will be subject to change based on the prevailing interest rate on its anniversary month to match market rates.

The agency offers loans through participating financial institutions at terms of up to 15 years, which are longer than the 10-year maximum term offered by private banks and investment houses. To be eligible, companies must be updated in remitting contributions and loan amortization of employees.

“Based on figures for August 2011, our maximum interest rates for companies now range from 7.5 to 11.25 percent, depending on the loan term. This is up to three percentage points lower than fixed interest rates of 10.5 to 13.5 percent prior to the implementation of new guidelines a month ago,” De Quiros said.

Under the new guidelines, employers can use the loan to acquire existing structures, expand and diversify businesses and fund projects on forest development and sustainable energy.

“To support the local economy, we also opened our loan programs to the extractive industry such as mining, dredging, oil and gas exploration,” De Quiros said.

But borrowers intending to extract minerals, oil and gas must first secure an environmental compliance certificate from the Department of Environment and Natural Resources and other concerned agencies, he said.

“We now also allow schools, hospitals and tourism businesses to use the loan as working capital to tide them over during the lean months, which was not possible in the past,” De Quiros said. “It eases financing needs of hospitals waiting for payments of patients using health cards or credit cards.”

SSS business loans include the Industry Loan Program, Special Financing Program and Financing Program for Tourism Projects. The SSS also offers social loans under Financing Programs for hospitals and educational institutions, including vocational and technical schools.

De Quiros said other eligible borrowers include start-up and existing enterprises engaged in agri-business, food processing, manufacturing, services, commercial production, real estate development, utilities, transportation and communication.

In a span of over 23 years, SSS has released more than P23 billion to fund 5,072 projects that have generated 99,300 jobs, created 4,125 hospital beds and provided school facilities for almost 168,000 students.

Interested employers can contact the SSS Corporate Bonds and Loans Department at 920-6401 local 5113 and 5115 or send an email to urbanogm@sss.gov.ph and carandangao@sss.gov.ph. PNA