Deped memorandum on the Deferment of the release of remittance on loans for the payroll month of April 2020, read below to know more of this memo.

UPDATE: Here is the official facebook post of Usec. Annalyn Sevilla Sharing her personal take and analysis of the “30-day grace period in the payment of loans”. see it below:

Sharing with you my personal take and analysis of the “30-day Grace Period in the payment of loans” pursuant to the Bayanihan Law and its IRR, while the Department is finalising its procedural policies on the same:

1. Various interpretations will lead to various executions. And at the end of it all, we need to carefully analyse, widely consult and promptly decide to make the implementation of the law and its IRR at its SIMPLEST way and to the most BENEFICIAL use of all employees (both to those who will process this and to those who will get the refund).

2. “May be…” vs “WILL” – when the IRR from DOF and advisory from BSP were released on April 1, 2020, I said deped “MAY” refund the withheld loan payments back to employees which were deducted from the April 2020 payroll. Some particular groups and organizations made their own tweaking of my statement and posted as headline announcement (with my name and picture on it) that the Department “WILL” refund already. This created confusion and misrepresentation to all concerned units particularly our payroll units and finance offices. Deped has NOT YET issued any instruction on this but instead, our office released an ADVISORY to all private lending institutions (PLIs) and to all deped internal stakeholders to DEFER the release of loan remittances to PLIs pending the issuance of policy and procedural guidelines on this. (See copies of memo and advisory in this post).

3. DepEd has identified several options available for borrowers to implement the law but all of these have implications (pros/cons; benefits/risks) and we are in the process of coordinating directly with DOF and BSP as the loans enrolled under the automatic payroll deduction system (APDS) program of deped require a different implementing provisions. The IRR is beneficial for personal, individual and corporate loans that can easily be traced and monitored as to its loan due dates and count the 30-day grace period; while the APDS has a batching process of remittance to PLIs and involves almost 650,000 individuals with more or less 8.7B monthly remittance to various PLIs.

4. “Moratorium” vs “grace period” – many of our employees are expecting and have believed that the law and IRR pertain to “moratorium” but in fact, what was provided is “GRACE PERIOD”.

There is a big difference in these terms and our employees have to realise that they need to exercise strict discipline in PAYING BACK the loan payment due for april payroll as soon as the 30-day grace period is has ended. The employee has to pay this back over-the-counter. If it is paid past due the grace period, it will incur interest and will possibly have accumulating interests and penalties. We also do not want to expose both our payroll processors and finance units who will remit back the deductions; and the employees to be exposed during public health emergency situations. This is against the commitment of deped to help government make its employees stay safely at home.

5. DepEd needs to provide uniform interpretation of the law and IRR through FAQs cards so our employees will better understand and appreciate the intention of the law. We are also grateful for the inputs/feedback/suggestions we got from the field, which we assure will be looked into and appropriately considered in the procedural policy.

Therefore, pls allow and TRUST that your department through our Secretary Leonor Magtolis-Briones (who is a former National Treasurer of the Philippines) is working hard to find useful provisions in the law that will lead to the SIMPLEST way possible and to the most BENEFICIAL use to all employees, without exposing you further to risks and improper personal financial education/literacy.

Salamat sa inyong pagiging responsable at magigiting na kawani ng Kagawaran ng Edukasyon. Hindi man tayo frontliner ngayon sa hamok na mayroon ang gobyerno laban sa COVID-19, pero malaki ang papel natin sa maraming paraan.

End of Facebook Post of Usec. Sevilla.

On March 24,2020, President Rodrigo Duterte signed into law the “Bayanihan to Heal as One Act” granting him additional powers to address the emergency health crisis the country is now facing due to the coronavirus disease (COVID-19) threat.

Under Section 4(aa), the President is authorized to “Direct all banks, quasi-banks, financing companies, lending companies, and other financial institutions. public and private, including the Government Service Insurance System, Social Security System and Pag-ibig Fund, to implement a (30)-day grace period for the payment of all loans, including but not limited to salary, personal, housing, and motor vehicle loans, as well as credit card payments, falling due within the enhanced Community Quarantine without incurring interests, penalties, fees, or other charges, persons with multiple loans shall likewise be given the minimum (30)day grace period for every loan;”.

Pursuant to this, the Department of Finance (DoF) has Issued on April 1,2020 the implementing rules and regulations (IRR) directing all lenders to grant a 30-day grace period or extension for the payment of all loans, falling due within the enhanced community quarantine (ECQ) period, without slapping Interest on interest or any additional charges and fees on the borrowers.

Disclaimer: This post is created for information, education and dissemination purposes only, NO copyright infringement intended, for more questions and inquiries contact us at [email protected]

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