State-run pension fund Government Service Insurance System said Tuesday it reduced its outstanding loans by 39 percent through enhanced collection efforts.
GSIS president and general manager Wick Veloso said in a statement the agency was seriously adhering to the recommendations of the Commission on Audit following audit findings that showed uncollected service loans surpassing P45 billion.
“As part of our ongoing efforts to improve our collection practices, we have reduced our total loan receivables. In 2016, our receivables stood at P74.25 billion. We’ve managed to cut this by 39 percent to P42.01 billion in 2023,” he said.
“In the first four months of 2023 alone, we reduced our due and demandable loans by P3.57 billion or 7.83 percent from its 2022 balances of P45.58 billion, bringing our April 2023 level down to P42.01 billion,” he said.
He said the substantial reduction in outstanding loans was the result of numerous measures the pension fund instituted over the years such as various condonation and restructuring programs designed to alleviate borrower debts.
One such initiative enabled inactive members to repay loans over a three-year period at a 10-percent annual interest rate.
GSIS also undertook extensive reconciliation of loan accounts to spot discrepancies and correct them promptly.
The pension fund launched in 2018 the GSIS Financial Assistance Loan and overhauled its multi-purpose loan programs, providing borrowers with options to consolidate existing loans.
GSIS also collaborated with external partners including the Credit Information Corp. and payment service providers Bayad, M. Lhuillier, LandBank and Union Bank to bolster loan repayment.
The pension fund is set to engage a third-party collection agency in the coming months.
The COA praised GSIS’s “continuous actions in enhancing its system to achieve a more effective collection facility.”
It also cited the necessity for members and pensioners to make accurate and timely payments, a sentiment underscored by the issuance of COA Memorandum Circular No. 2017-015 on Aug. 8, 2017, which mandated agencies to comply with premium and loan deductions.