FINANCE Secretary Carlos Dominguez III on Thursday urged the state-run Land Bank of the Philippines and the Government Service Insurance System to come up with an easy-to-pay, low-interest refinancing program for loans incurred by public school teachers to free them from exorbitant borrowing rates.
Dominguez said the loan restructuring scheme would enable debt-saddled teachers to pay their loans to private lending institutions and provide them with better borrowing rates than those offered by private money lenders.
Th refinancing program, Dominguez said, would prove to be highly beneficial for teachers, as they get to pay lower interest on their existing loans and at the same time allow them to save up for their retirement funds.
“The teachers pay less, [the government financial institutions (GFIs)] earn more than leaving (their money) in government securities, and the funds that teachers earn anyway goes back to the them as their retirement fund,” Dominguez said.
A report by the GSIS during a recent Executive Committee meeting of the Department of Finance showed the Department of Education had a high default rate of almost 40 percent on its GSIS loans.