By Merlina Hernando-Malipot
The Department of Education (DepEd) instructed all offices and units involved in the preparation and processing of loan remittances to temporarily hold the release of loan amortizations for this month until “further notice.”
DepEd Undersecretary for Finance Annalyn Sevilla, in a memorandum dated April 3, announced the deferment of the release of remittance on loans for the payroll month of April 2020.
In March, Sevilla noted that President Duterte signed into law the “Bayanihan to Heal As One Act” granting him additional powers to address the emergency health crisis the country is now facing due to the coronavirus disease (COVID-19) threat. Among the provisions in the law is the implementation of the “30-day grace period” of all loans that fall within the Enhanced Community Quarantine (ECQ) without incurring interests, penalties, fees, and other charges.
Pursuant to this, Sevilla said that the Department of Finance (DoF) has earlier issued the implementing rules and regulations (IRR) directing all lenders to grant a 30-day grace period or extension for the payment of all loans falling within the ECQ period “without slapping interest or any additional charges and fees from the borrowers.”
In order to “standardize and harmonize” the legal interpretations and implications of the implementation of DoF’s rules and regulations, Sevilla said DepEd is “closely coordinating” with the DoF, Government Financial Institutions (GFIs), and the Automatic Payroll Deduction System (APDS)-accredited Private Lending Institutions (PLIs) in the “crafting of DepEd’s internal guidelines.”
Pending the issuance of internal guidelines, Sevilla said that all offices/units that are involved in the process and preparation of loan remittance are “instructed to hold in abeyance the remittance of the loan amortization” for this April until further notice has been issued. “Rest assured that this office is committed to issue the internal guidelines at the soonest possible time,” she added.
Sevilla, in a Facebook post, also shared her “personal take and analysis” of the “30-day grace period in the payment of loans” pursuant to the Bayanihan Law and its IRR while the DepEd is finalizing its procedural policies on the matter.
“Various interpretations will lead to various executions,” Sevilla said. “And at the end of it all, we need to carefully analyze, widely consult, and promptly decide to make the implementation of the law and its IRR in its simplest way and to the most beneficial use of all employees, those who will process this and those who will get the refund,” she added.
Sevilla also clarified that when the IRR from DoF and advisory from BSP were released earlier, she said DepEd “may” refund the withheld loan payments back to employees, which were deducted from the April 2020 payroll. Soon after, she noted that “some particular groups and organizations made their own tweaking of my statement” saying that DepEd “will” refund already.
“This created confusion and misrepresentation to all concerned units particularly our payroll units and finance offices,” Sevilla said. DepEd, she clarified, has “not yet issued any instruction.” Instead, her office issued an advisory to all PLIs and to all DepEd internal stakeholders to “defer the release of loan remittances to PLIs pending the issuance of policy and procedural guidelines on this.”
Sevilla explained that DepEd has also identified several options available for borrowers to implement the law and that “we are in the process of coordinating directly” with DOF and BSP as the loans enrolled under the APDS program of DepEd “requires different implementing provisions.”
“The IRR is beneficial for personal, individual, and corporate loans that can easily be traced and monitored (in terms of) due dates and counting the 30-day grace period; while the APDS has a batching process of remittance to PLIs and involves almost 650,000 individuals with more or less 8.7B monthly remittance to various PLIs,” Sevilla explained.
Moreover, Sevilla clarified the meaning of “grace period” as well as the need for DepEd to “provide uniform interpretation” of the law and IRR through FAQs cards so its employees will better understand and appreciate the intention of the law.
“We are also grateful for the inputs, feedback, suggestions we got from the field, which we will look into and appropriately consider in the procedural policy,” Sevilla said.
Sevilla urged all concerned employees, however, to “allow and trust” DepEd, through Secretary Leonor Briones, a former National Treasurer of the Philippines, is “working hard to find useful provisions in the law that will lead to the simplest way possible and to utmost benefit of all employees, without exposing you further to risks and improper personal financial education or literacy.”