SSS Overcharged Salary Loan Interests

The Social Security System has overcharged its members on an advance interest on salary loans processed last year, 2011, which was totalled for about 778.842 million pesos.

The overcharged was revealed by the Commission on Audit (COA).

According to the COA, the excess was caused by the failure of SSS to adopt the accepted rule in computing the interest for installment of payment of loans. The said rule has been mandated by the Bangko Sentral ng Pilipinas (BSP) Manual of Regulations under Section X307.2.

“We recommend that management calculate interest using the method for normal installment type of credit prescribed by the BSP, and refund the excessive interest collected from borrowers,” -the Commission on Audit said in its 2011 Annual Audit report.

Let's hear it from the SSS.

According to the Social Security System (SSS), they are ready for a refund to all of its affected members.

"Meron na kaming remedy diyan at inaprubahan na ng aming commision na i-correct namin yung situation na yan," ... "Yung hindi nakapag-renew ng kanilang loan, ire-refund namin pero yung mga may existing loan, ibabawas na lang dun sa kanilang payable o kanilang principal na babayaran," - Marissu "Susie" Bugante, the Vice President for Public Affairs of SSS said on a radio interview.

We saved the technical details, some things are clear here. First, the COA did a good job of detecting the irregularities. Second, the SSS is mature enough to admit their mistake. And the most important thing is that SSS is willing to refund the excess to their members.