The Social Security System (SSS) released a total of P189.05 million in business loans last year for growth and expansion projects of nine private enterprises that include service providers, real estate and construction firms, and traders of various consumer goods.
SSS Assistant Vice President for Lending and Asset Management Ma. Luz C. Generoso said the nine firms, which made up the first annual batch of borrowers under the SSS Business Development Loan Facility (BDLF) launched in 2012, benefited from SSS corporate loans of P1 million up to P43 million.
“The BDLF is part of SSS’ commitment to support state efforts to spur national economic growth by providing private sector employers wider access to credit. This loan privilege is extended to SSS-registered employers that are seeking funds to expand or diversify their businesses,” she said.
Registered Barangay Micro Business Enterprises, as well as new and existing companies that are classified as single proprietorship, partnership, cooperative or non-government organization, and with at least 60 percent Filipino ownership are eligible to borrow under the BDLF.
The loan must be used for working capital, site development, acquisition, enhancement or modernization of existing facilities, building construction and repair, or for the acquisition, repair or upgrading of machinery, equipment and furnishings. BDLF loans may also be utilized to acquire land, but only up to 50 percent of the land cost. Based on BDLF availments in 2012, majority of the loans were used as working capital, followed by building construction.
In a departure from its previous business loan guidelines, SSS has recently allowed companies with overdue SSS contributions and loan payments to still borrow from the BDLF, provided they submit a letter of conformity that allows SSS to deduct their overdue amount from the loan proceeds. Companies that are under an installment-payment plan for their SSS delinquency may likewise borrow from the BDLF.
Generoso stressed that this move ensures that SSS is able to collect all due contributions and loan payments from employers. “The deduction will be credited as payment for the company’s delinquency,” she said.
Accredited conduits where companies can apply for BDLF loans are Development Bank of the Philippines, Land Bank of the Philippines, Philippine Veterans Bank, Planters Development Bank, Valiant Rural Bank – Iloilo, Philippine National Bank and Banco de Oro Unibank, Inc.
“The companies that availed themselves of BDLF loans last year were able to create 43 additional jobs,” she noted. “This number may seem small, but it is still in line with our objective of generating employment that will have a multiplier effect on the national economy and in the lives of workers and their families as well.”