Education Secretary Armin Luistro. INQUIRER FILE PHOTO
MANILA, Philippines—Education Secretary Armin Luistro has signed an agreement with the Land Bank of the Philippines that will enable teachers and employees of the Department of Education to procure livelihood loans at low interest rates, the department announced Saturday.
The livelihood loan facility is open to qualified rank-and-file employees who may borrow amounts equivalent to eight months of their gross pay, but not over P500,000, at a fixed interest rate of 10.5 percent per annum.
A bigger amount, not to exceed P1 million, may be borrowed by qualified DepEd officials at the same interest rate.
According to Luistro, the memorandum of agreement for the livelihood loan facility offers an “excellent opportunity for teachers and other DepEd employees to improve their financial welfare by availing themselves of low interest rates.”
Luistro said the interest rate offered by the Land Bank was much lower than that offered by most private lenders. The loan may be repaid through salary deductions.
“For a starting teacher borrowing at the maximum amount, the savings in amortization is approximately P1,000 per month, which goes a long way in increasing the net take home pay of teachers,” he said.
Luistro noted that the requirements of most lending companies such as collateral and security had made personal loans inaccessible. However, the Land Bank has agreed to accept as security the borrower’s assignment of funds in his bank account, including salaries, allowances, leave credits and other monetary deliverables.
With the agreement between the two agencies, the Land Bank will release the DepEd employees’ monthly salaries through automated teller machine cards and the borrowers can receive their loans through their bank accounts.
To qualify for a loan, a borrower must be a regular or permanent DepEd employee between 18 and 62 years old, who has been in the service for at least one year and maintains an LBP ATM payroll account.
Borrowers must also have a monthly net take home pay—the salary amount after deductions and amortizations on loans, including the livelihood loan applied for—of at least P3,000.
Borrowers should neither have any pending criminal or administrative cases nor pending applications for or are not due for retirement within the term of the loan.