New GSIS loan buyout program offers debt relief

Keisha Ta-Asan – The Philippine Star

February 4, 2025 | 12:00am

MANILA, Philippines — State-run Government Service Insurance System (GSIS) has introduced a loan buyout program that allows government employees to consolidate their debts at significantly lower interest rates, providing much-needed financial relief for state workers.

Under the MPL Max program, qualified members can borrow up to 19 times their salary or P5 million, whichever is lower, with interest rates as low as six percent and repayment terms extending up to 10 years.

The program eliminates surcharges on existing GSIS loans, waives service fees and includes free loan insurance coverage. Borrowers also have the flexibility to pre-terminate their loans without penalties.

GSIS president and general manager Wick Veloso said the pension fund aims to shield members from excessive interest rates in the lending market.

“Through the MPL Max, we are throwing a lifeline to our members who are weighed down by debt,” Veloso said.

“This goes beyond consolidating loans – we are helping our members rebuild their lives by creating a clear path to financial recovery and stability,” he said.

To participate, a government agency must first sign a memorandum of agreement with the GSIS. Once enrolled, employees can apply to consolidate their existing loans into a single, lower-interest GSIS loan.

Upon approval, the GSIS will directly pay off the member’s outstanding loans to their respective lending institutions. Any remaining funds will be credited to the member’s GSIS eCard or regular ATM account. Monthly payments will be automatically deducted from the member’s salary.

To qualify, members must have paid at least one month of premium contributions within the past six months, have no existing multi-purpose loans and no defaulted GSIS Financial Assistance Loans.

They must be free of administrative or criminal cases. Members must also have sufficient net take-home pay as required by the General Appropriations Act.

Required documents include the application form, borrower loan agreement and loan voucher or other certified documents showing existing loans.

Also needed are statements of accounts from lending institutions with the borrower’s confirmation of correctness, along with a copy of the ID of the lending institution’s authorized representative who will claim the check from GSIS as well as the latest pay slip.

The GSIS said members should submit these documents in person after setting an appointment through its GSIS Touch facility.

“Our appointment system guarantees that each member receives proper attention when applying for this financial relief program,” Veloso said.

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