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WHEREAS, the duty of agencies to prioritize loan amortizations due to the System is clearly stated in Section 37 of the General Appropriations Act (GAA);

WHEREAS, GSIS has been continually seeking ways to improve its collection efficiency, particularly in the collection of loan amortizations from member-borrowers;

WHEREAS, there is a need to provide policies and implementing guidelines to cover cases where the concerned agency official and/or employee failed to deduct the full amount of GSIS loan amortizations due from agency employees, thereby resulting in non-remittance or under-remittance of loan payments to the System;

RESOLVED, to APPROVE and CONFIRM the Policy and Procedural Guidelines (PPG) on the Failure by Concerned Agency Officials and/or Employees to Deduct the Full Amount of GSIS Loan Amortizations Due from a Member-Borrower, as proposed by the Senior Vice President, Corporate Services Group and Corporate Planning Office, in her Memorandum dated 6 December 2013.

A copy of the PPG on the Failure by Concerned Agency Officials and/or Employees to Deduct the Full Amount of GSIS Loan Amortizations Due from a Member-Borrower is made an integral part of this Resolution.

Attachment:

Policy and Procedural Guidelines No. 251-14

Failure by Concerned Agency Officials and/or Employees to Deduct the Full
Amount of GSIS Loan Amortizations Due From a Member-Borrower

I. BACKGROUND/RATIONALE

The System is mandated to persistently collect members and agency obligations, i.e. premium contributions and loan amortizations. Delinquent agencies are given the option to enter into Memorandum of Agreement (MOA) with GSIS to settle their unpaid premium contributions. However, unpaid loan obligations are not included ill the MOA.

Consistent with the System’s vision to pursue its social mission with a member-focused orientation, the Board has held that the non-payment of loans will not result in the suspension of loan privileges of employees of delinquent agencies. There is thus a need to provide policies and implementing guidelines for the Operations Group for cases where the concerned agency official and/or employee failed to deduct the full amount of amortization for a loan from the member.

II. LEGAL BASIS

Section 41, Item (w) of Republic Act No 8291 (The Government Service Insurance System Act of 1997) provides that:

SEC. 41. Powers and Functions of the GSIS. - The GSIS shall exercise the following powers and functions:

(a)	x x x;
(w)	to ensure the collection or recovery of all indebtedness liabilities and/or accountabilities, including unpaid premiums or contributions in favor of the GSIS arising from any cause or source whatsoever, due from all obligors, whether public or private. The Board shall demand payment or settlement of the obligations referred to herein within thirty (30) days from the date the obligation becomes due, and in the event of failure or refusal of the obligor or debtor to comply with the demand, to initiate or institute the necessary or proper actions or suits, criminal, civil or administrative or otherwise, before the courts, tribunals, commissions, boards, or bodies of proper jurisdiction within thirty (30) days reckoned from the expiry date of the period fixed in the demand within which to pay or settle the account;
x x x.

Moreover, Section 37 of the General Appropriations Act (GAA) provides that:

SEC. 37. Authorized Deductions. - Deductions from salaries, emoluments or other benefits accruing to any government employee shall be chargeable against the appropriations for Personal Services for the payment of the individual employee’s contributions or obligations due the following in the order of preference stated below:

(a) BIR, PHILHEALTH, GSIS, and HDMF;
(b) xxx

III. OBJECTIVES

This PPG aims to:

1. Provide the policy for the treatment of agencies and its officials and employees who are responsible for the failure to deduct the full amount of loan amortization due from the member-borrower; and
2. Provide policies to guide the Operations Group in their treatment of delinquent agencies and enhance their monitoring and collection function.

IV. COVERAGE

This PPG shall cover all national government agencies (NGAs), local government units (LGUs), government-owned or controlled corporations (GOCCs), government financial institutions (GFls), the constitutional commissions and the judiciary.

V. POLICIES

VI. PROCEDURES

The detailed procedures contained in the Manual of Operations shall conform to general guidelines set forth in this PPG.

Activity	Responsible Unit
	Central Office	Branch Offices
1. Generate positive billing every 3rd week of the previous month. Example: If the due month is March, billing generation is on the 3rd week of February.	ITSG/TSD
2. Validate positive billing within the day from receipt of billing files	Accounts Management Division (AMD) AMD	Billing, Collection and Reconciliation Division (BCRD) BCRD
3. Distribute positive billing to agencies every 1st week of the due month. Example: If the due date is March, the billing distribution shall be on the 1st week of March.
4. Monitor payment of the Remitting Agency (RA)
4.1 If payment was remitted on or before the due date, post payment. Example: If the due month is March, the payment must be remitted by the RA on or before April 10.		Treasury Unit
4.2 If payment was not remitted within due date, request for a meeting with the head of agency to be held not later than seven (7) days from due date, in accordance with Section V.D.2.a.	NCR I, II, III and QC Manager	Branch Manager/Head
5. Monitor payment of the RA after seven (7) days from next remittance due date.	AMD	BCRD
5.1 If payment is remitted, post payment		Treasury Unit
5.2 If payment was not remitted after seven (7) days from the next remittance due date, send Demand Letter (DL), copy furnished the AAO and the head of the employees’ union or association or the Human Resources (HR) unit of the agency for posting in its bulletin boards.		BCRD
6. Monitor payment of the RA after receipt of DL	AMD	BCRD
6.1 If payment is remitted within 30 days, post payment.		Treasury Unit
6.2 If payment is not remitted within 30 days, send a Second Demand Letter (SDL), copy furnished the AAO and the head of the employees’ union or association, or the HR unit for agencies without employee’s union or association.	NRC I, II, III, and QC Manager	Branch Manager/Head
7. Monitor payment of the RA after receipt of SDL.	AMD	BRCRD
7.1 If payment is remitted within five (5) working days, post payment.		Treasury Unit
7.2 If payment is not remitted within five (5) working days, refer to LSG	SVP concerned
8. Prepare and send Final Demand Letter (FDL) to delinquent agency within 15 days, copy furnished OUC.	LSG
9. Monitor payment after receipt of the FDL.	AMD	BCRD
9.1 If payment is remitted within 30 days, post payment		Treasury Unit
9.1.1 Inform LSG of the payment through concerned SVP, Operations Groups	NCR I, II, III, and QC Manager	Branch Manager/Head
9.2 If payment is not remitted within 30 days, inform LSG through concerned SVP, Operations Groups, for filing of appropriate legal action.
10. Within 30 days upon approval by the Board, file appropriate legal action against the head of the delinquent agency and all responsible officials and/or employees, as provided in Section 52(g) of Republic Act No. 8291.	LSG
END OF PROCESS

All Office Orders, Policy and Procedural Guidelines, Circulars which are inconsistent herewith are hereby superseded, modified, or repealed accordingly.

This PPG shall take effect after fifteen (15) days from the date of its publication in the Official Gazette or in a newspaper of general circulation.

(SGD) ROBERT G. VERGARA
President and General Manager
Date Signed: 03 January 2014