In response to recent audit findings from the Commission on Audit (COA) that revealed uncollected service loans surpassing P45 billion, state pension fund Government Service Insurance System (GSIS) President and General Manager Wick Veloso, said in an interview this morning that GSIS is serious about adhering to COA’s recommendations and continually improving its processes.
“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% to P42.01 billion in 2023. In the first four months of 2023 alone, we reduced our due and demandable loans by P3.57 billion or 7.83% from its 2022 balances of P45.58 billion, bringing our April 2023 level down to P42.01 billion,” Veloso said.
According to Veloso, the substantial reduction in outstanding loans is the result of numerous measures the pension fund has instituted over the years.
These include 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% annual interest rate.
In addition, GSIS has undertaken extensive reconciliation of loan accounts to spot discrepancies and correct them promptly.
In 2018, the pension fund launched the GSIS Financial Assistance Loan (GFAL) and overhauled its Multi-Purpose Loan programs, providing borrowers with options to consolidate their existing loans.
GSIS has also collaborated with external partners, including the Credit Information Corporation and payment service providers Bayad, M. Lhuillier, LandBank, Union Bank, to bolster loan repayment.
Further, the pension fund is set to engage a third-party collection agency in the coming months.
COA praised GSIS’s “continuous actions in enhancing its system to achieve a more effective collection facility.”
The Commission also emphasized 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 August 8, 2017, which mandated agencies to comply with premium and loan deductions.