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(NAR) VOL. 15 NOS. 3-4 / JULY - SEPTEMBER 2004

[ GSIS RESOLUTION NO. 44, February 27, 2004 ]


RESOLVED, to APPROVE the Salary Loan Condonation and Restructuring Program, the salient features of which are as follows:

1. Eligibility Requirements - All active members whose salary loan accounts are in arrears or in default will be eligible to apply for the restructuring of their loans.

2. Amount to be condoned - Only penalties/surcharges shall be condoned.  No part of the principal nor the interest shall be condoned.

3. Gross Amount of Loan - The gross amount of loan shall be the outstanding balance of the principal, unpaid interests of the salary loan account in arrears or in default (net of surcharges and penalties), service fees and salary loan redemption insurance (SLRI).

4. Repayment Period and Interest Rates - The restructured salary loan shall be repaid in a period of from two (2) years to four (4) years (at the option of the member-borrower), at an interest rate of 12% per annum, based on the declining balance of the restructured loan.

5. Monthly Installment - Formula for computing the Monthly Installment (MI) shall be as follows:


Monthly Installment Factor nt (MIF)*

  Gross Loan/1000

Where n = term; t = duration from loan grant to the first due date (in months and days) (Please see Annex A for MIF)

6. Due Date of the First Monthly Installment - Due date of first monthly installment shall be as follows:

Day of the Month that the Restructuring was Approved

Due Date of the First Monthly Installment
On or before the 10th of the monthEnd of the following month
After the 10th of the monthEnd of the next following month

7. Service Fee - A service fee of 1% shall be charged based on the outstanding balance of the principal plus unpaid interests (net of surcharges and penalties), which shall be included in the gross loan amount.

8. Loan Redemption Insurance - All restructured salary loans shall be covered by a redemption insurance and thus be charged a one-time premium to be added to the outstanding loan amount.  The benefit under the Loan Redemption Insurance (LRI) shall be Theoretical Outstanding Balance of the Loan at the time of death of a member-borrower.  Insurance coverage is automatically terminated upon expiration of the loan term, or upon renewal of the loan, or upon payment of the loan in full, whichever comes first.  The formula for computing the redemption insurance premium shall be as follows:

Repayment Period

Formula for Computing LRI Premium
24 months
P = 1.2% Loan Amount **
36 months
P = 1.6% Loan Amount **
48 months
P = 2.0% Loan Amount **

** Loan amount is the outstanding balance of the principal and unpaid interests of the salary loan in arrears or in default (net of surcharges and penalties)

9. Surcharge

A surcharge of 0.5% per month on delayed monthly installments.

10. Restrictions of Availment of Salary Loan

Member-borrowers with restructured salary loan accounts shall not be allowed to concurrently avail of the regular salary loan program.

11. Conditions for Renewal

Renewal of the restructured salary loan account shall only be allowed after payment of six monthly installments and if there is net proceeds on the renewal loan.  Terms and conditions on the renewal loan shall follow the regular salary loans.

RESOLVED FINALLY, to DIRECT Management to submit to the Board a report on the extent of, and the explanation on, the delinquency in the repayment of salary loan accounts.

Adopted: 27 Feb. 2004

* Not filed with ONAR.
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