A federation of teachers on Monday called for the cancellation of loan interest accrued during the lockdown as teachers continue to grapple with additional costs that come with the distance learning implemented by the Department of Education (DepEd).
Citing reports from the ground, the Alliance of Concerned Teachers (ACT) Philippines said that many teachers were shocked to learn that some private lending institutions (PLIs) have billed them accrued interests for their loans for the duration of the Enhanced Community Quarantine (ECQ).
ACT said the payments for those had been temporarily suspended by virtue of the mandatory grace period “without incurring interests, penalties, fees, or other charges” as provided for in Section 4 (aa) of RA 11469 or the Bayanihan to Heal as One Act.
“The continuous accrual of interests during the mandatory grace period came as a shock to teachers as this was not clearly explained to us by the government and the PLIs,” said ACT Secretary General Raymond Basilio. “Otherwise, we would have immediately contested such provision as it goes against the objectives of the Bayanihan Law to mitigate adverse effects of the pandemic to the people,” he added.
Basilio argued that the Implementing Rules and Regulations (IRR) revealed an inconsistency with Section 4 (aa) of the law when Section 5.02 of the former detailed that accrued interests may be paid on a “staggered basis over the remaining life of the loan.”
He noted that the IRR “subtly but distinctly” deviated from the Bayanihan Law when it articulated that the grace period shall effect without incurring “interests on interests, penalties, fees, or other charges” as cited in Section 3.01 of the IRR.
“This, to us, seems to be a deceptive move in favor of lending institutions, as such indicates that PLIs will garner more profit from the loans of low-salaried teachers amid one of the country’s most difficult times,” Basilio said.
Basilio said that almost all of these PLIs ceased their operations during the lockdown, which means less operational expenses.
Basilio noted that ACT has already submitted a letter to the Bangko Sentral ng Pilipinas (BSP) bearing the same demand against the accrued interests being charged by lending institutions for the last three months of grace period for loan payments.