Provident Fund Loan Guidelines and Other Concerns

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Pursuant to DepEd Order No. 36, s. 2007, the guidelines and requirements in securing the said loan must be strictly followed to ensure equal opportunity from teaching and non-teaching personnel to be benefited from the said fund/loan.

The loan shall be used for emergency needs of the teacher/employee, or immediate and other members of his/her family up to the fourth degree of civil consanguinity or affinity:

  1. Hospital and/or medical expenses resulting from an accident/serious illness;
  2. Death of immediate and/or other members of his/her family up to the fourth degree of affinity and consanguinity;
  3. Educational loans

The following reasons for loan application are hereby discouraged:

  1. House repair
  2. Buy-out of loans from other lending institutions
  3. Business and similar ventures

The maximum total amount loanable shall be twenty five thousand pesos only (P25,000.00) subject to the availability of funds, the actual need of the teacher/employee-applicant, and to other pertinent limitations set forth, without prejudice to other pending applications for new loans.

The loan requirements are as follows:

  1. Accomplished application form stating, among others, the specific purpose for which the loan will be used, including the appropriate supporting documents,
  2. Latest payslip/payroll indicating monthly salary deductions (borrower and co-maker); and
  3. Nationally paid Casual employee-borrowers shall also submit a copy of his/her latest appointment in addition to the above requirements.

The Provident Fund loan shall have an interest rate of six percent (6%) per annum, addon and straight computation. Repayment period shall be at the option of the borrower, subject to his/her capacity to pay and computation of his/her net take home pay which shall not be reduced to less than three thousand five hundred pesos (Php3,500.00) after all deductions including the Provident Fund loan amortization. The borrower may opt for a repayment schedule of twelve months (1 year) up to a maximum period of sixty months (5 years) equal monthly installments. In all cases, repayment of loans shall be through automatic deduction from the borrower’s salary either by agency payroll or OSD-IBM deduction (RPSU deduction).

The National Regional Boards (Division Secretariat) may allow renewal of loan provident that fifty percent (50%) of the previous loan has been paid, there is no pending application for new loan(s), and the balance of the principal amount shall be deducted from the new loan.

In addition to the above mentioned requirements, the teacher/employee applicant must also comply with the following:

  1. Teacher/employee applicant must submit necessary documents to support the application loan:

a. Medical certificate for hospitalization/medical expenses
b. Death certificate
c. Registration card/schedule of tuition fee payment

Processing of Provident Fund Loan Application:

The foregoing process shall be followed prior to the approval of the loan application:

  1. The teacher/employee applicant shall accomplish the application form and submit the same with the necessary supporting documents to the Schools Division Office through the Receiving Section.
  2. The application form will then be given to Accounting Unit for the computation of the amortization schedule according to the repayment period of the loan chosen by the applicant;
  3. Final approval will come from the Committee Chair;
  4. After approval, the application form will be returned to the Accounting Unit for processing of the Disbursement Voucher, subject to availability of fund.

June 01, 2007

DepEd Order No. 30, s. 2007

AMENDMENTS AND ADDENDUM TO DEPED ORDER NO. 12, S. 2004 (Revised Implementing Guidelines for the DepED Provident Fund)

To:

Undersecretaries
Assistant Secretaries
Bureau Directors
Directors of Services/Centers and Heads of Units
Regional Directors
Schools Division/City Superintendents

1. Pursuant to Resolution Nos. 02 and 03, s. 2007 of the National Board of Trustees of the DepED Provident Fund, the pertinent provisions of DepED Order No. 12, s. 2004, entitled Revised Implementing Guidelines for the DepED Provident Fund are hereby amended as follows:

a. Section X.4

The loan shall be used for emergency needs of the teacher/employee, or immediate and other members of his/her family up to the fourth degree of civil consanguinity or affinity:

i. Hospitalization and/or medical expenses resulting from an accident / illness;
ii. Death of immediate and/or other members of his/her family up to the fourth degree of consanguinity or affinity;
iii. Educational loans;
iv. Minor but immediately needed repair of the house of the teacher/employee; and
v. Other emergency expenses to be specified by the teacher / employee-applicant.

b. Section X.5

The maximum total amount of loans shall be One Hundred Thousand Pesos (P100,000.00), subject to the availability of funds, the actual need of the teacher/employee-applicant, and to other pertinent limitations set fourth, without prejudice to other pending loan applications for new loans.

c. Section X.7

The loan requirements are as follows:

i. Accomplished application form stating, among others, the specific purpose for which the loan will be used, including the appropriate supporting documents;
ii. Latest pay slip/payroll indicating monthly salary deductions; and
iii. Casual employee-borrowers shall also submit a copy of his/her latest appointment .in addition to the above requirements.

d. Section X. 10

The Provident Fund loan shall have an interest rate of six percent (6%) per annum, add-on and straight computation. Repayment period shall be at the option of the borrower, subject to his/her capacity to pay and computation of his/her net take home pay which shall not be reduced to less than Three Thousand Pesos (P3,000.00) after all deductions including the Provident Fund loan amortization. The borrower may opt for a repayment schedule of twelve (12, one (1) year) up to a maximum period of sixty (60, five (5) years) equal monthly installments. In all cases, repayment of loans shall be through automatic deduction from the borrower’s salary, either by agency payroll or PSD-IBM deduction.

e. Section X. 11

The National Regional Boards may allow renewal of loan provided that fifty percent (50%) of the previous loan has been paid, there are no pending applications for new loans, and the balance of the principal amount shall be deducted from the new loan.

2. The following is an additional provision in the implementing guidelines pursuant to Board Resolution No. 03, s. 2007:

The Chairpersons of the National/Regional Boards shall set aside an amount of One Million Pesos (PI,000,000.00) per annum to be used in granting additional loans to teachers and non-teaching employees subject to the following conditions:

i. Availability of funds;
ii. The additional loan shall be granted in case the borrower is not qualified for renewal of loan when he / she has paid less than 50% of his/her previous loan;
iii. The loan shall be used for extreme emergency cases only, as may be determined by the Chairpersons of the National/Regional Boards of Trustees. Examples of extreme emergency cases are: (1) payment for hospital bills of the teacher/employee or member of his/her family within the third civil degree of consanguinity/affinity; (2) death of a member of the borrower’s family within the third degree of consanguinity/affinity; or (3) borrower is a direct victim of a natural or man-made calamity, such as typhoons, lire, robbery, armed conflict, etc.;
iv. The total loan account of the bprrower shall not exceed the amount of One Hundred Thousand Pesos (PI 00,000.00);
v. The net take home pay of the borrower shall not be reduced to less than Three Thousand Pesos (P3,000.00) after the deduction of the amortization for the additional loan; and
vi. Other conditions as maybe imposed by the National/Regional Boards of Trustees.

Applications for the additional loan shall be submitted to the concerned Secretariat which shall initially screen and evaluate the same as to the amount of additional loan that may be availed of by the loan applicant taking into consideration his/her net take home pay, existing loan account and other conditions set forth. Thereafter, the loan application shall be forwarded to the Board Chairperson who shall determine and decide the specific amount of additional loan that may be granted to the loan applicant based on the information provided by the Secretariat.

3. Qualified casual employees, including contractual employees with appointment and co-terminus employees, who have been in the service with the Department for at least two (2) years of continuous service, may avail of the Provident Fund loan up to a maximum amount of Twenty Thousand Pesos (P20,000.00) only, and shall be payable up to a maximum of two (2) years (24 months).

4. Provisions in the implementing guidelines in DepED Order No. 12, s. 2004 which are inconsistent with the above amendments and addendum are hereby rescinded while those that are not affected shall continue to be observed.

5. Immediate and wide dissemination of this Order to all concerned is directed.

TEODOSIO C. SANGIL, JR.
Undersecretary
Officer-in-Charge

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