DepEd Usec. Sevilla's personal take on the 30-day grace period on loan payments

The 30-day mandatory grace period to all loans within the enhanced community quarantine has gained various interpretations and confusions especially to those affected by this. With the set of implementing rules and regulations, DepEd employees, mostly teachers, are still puzzled on how exactly the government is planning to render this that will truly be beneficial to them in this challenged time.

DepEd Undersecretary Annalyn M. Sevilla shares her personal take on this mandatory 30-day grace period to shed some light on all concerned personnel especially in DepEd.

Here is the full text of her personal take on this matter and hopefully this helps you understand this 30-day grace period more effectively:

Sharing with you my 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 Department is finalising its procedural policies on the same:

1. Various interpretations will lead to various executions. And at the end of it all, we need to carefully analyse, widely consult and promptly decide to make the implementation of the law and its IRR at its SIMPLEST way and to the most BENEFICIAL use of all employees (both to those who will process this and to those who will get the refund).

2. “May be...” vs “WILL” - when the IRR from DOF and advisory from BSP were released on April 1, 2020, I said deped “MAY” refund the withheld loan payments back to employees which were deducted from the April 2020 payroll. Some particular groups and organizations made their own tweaking of my statement and posted as headline announcement (with my name and picture on it) that the Department “WILL” refund already. This created confusion and misrepresentation to all concerned units particularly our payroll units and finance offices. Deped has NOT YET issued any instruction on this but instead, our office released an ADVISORY to all private lending institutions (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. (See copies of memo and advisory in this post).


3. DepEd has identified several options available for borrowers to implement the law but all of these have implications (pros/cons; benefits/risks) and we are in the process of coordinating directly with DOF and BSP as the loans enrolled under the automatic payroll deduction system (APDS) program of deped require a different implementing provisions. The IRR is beneficial for personal, individual and corporate loans that can easily be traced and monitored as to its loan due dates and count 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.

4. “Moratorium” vs “grace period” - many of our employees are expecting and have believed that the law and IRR pertain to “moratorium” but in fact, what was provided is “GRACE PERIOD”. There is a big difference in these terms and our employees have to realise that they need to exercise strict discipline in PAYING BACK the loan payment due for april payroll as soon as the 30-day grace period has ended. The employee has to pay this back over-the-counter. If it is paid past due the grace period, it will incur interest and will possibly have accumulating interests and penalties. We also do not want to expose both our payroll processors and finance units who will remit back the deductions; and the employees to be exposed during public health emergency situations. This is against the commitment of deped to help government make its employees stay safely at home.

5. I shared my thoughts in advance of the official interpretation and implementing guidelines of the department to drive to a point. “There is already a law (in which DepEd is not a part of team that drafted provisions on loan payment provisions); and the Law and IRR do not speak of MORATORIUM, only grace period to pay.” If we can only wish and approve our own law, eh mas madali and masaya di bah! We will push for a moratorium✌️😉, but we have to also consider that there are constraints to implement a blanket moratorium on contractual obligations such as LOANS (impairment of contract principle- geneally speaking, this clause was added to the Constitution in order to prohibit state from interfering with private contracts. The clause states that, 'No State shall... pass any... Law impairing the Obligation of Contracts...), hence what government can offer is only grace period. this is also why we are asking for your understanding on why we need sometime to coordinate with DOF, BSP and PLIs and negotiate with them the most beneficial arrangement that can be provided to deped employees.

6. DepEd needs to provide uniform interpretation of the law and IRR through FAQs cards so our 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 assure will be looked into and appropriately considered in the procedural policy.

Therefore, pls allow and TRUST that your department through our Secretary Leonor Magtolis-Briones (who is 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 the most BENEFICIAL use to all employees, without exposing you further to risks and improper personal financial education/literacy.

Salamat sa inyong pagiging responsable at magigiting na kawani ng Kagawaran ng Edukasyon. Hindi man tayo frontliner ngayon sa hamok na mayroon ang gobyerno laban sa COVID-19, pero malaki ang papel natin sa maraming paraan.
🤗❤️🇵🇭

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