MANILA - To encourage economic activities, pension fund manager Social Security System (SSS) has slashed the interest rates on its social and business loans.
 
SSS president and chief executive officer Romulo Neri said in a statement that the agency reduced interest rates on loans with a term of one year or less to 5.5% from 6%, and those with a term of over 1-3 years to 6.25% from 7%.
 
Neri added that interest rates on loans to be paid in 3-5 years have been cut to 7% from 8%, while those on loans that will mature in 5-10 years to 8.5% from 9%.
 
"We lowered our interest rates to generate more employment by helping enterprises expand their operations and members set up their own businesses," he said.
 
According to him, the rate cuts would also help borrowers cope with the global economic slump that stemmed from the US financial crisis.
 
SSS extends loans of up to P50 million to small and medium enterprises, and anywhere between P51 million and P500 million to large-scale companies.
 
It also offers financing for tourism projects, for hospitals, and educational Institutions, including vocational and technical schools.
 
The loans are coursed through the pension fund’s accredited banks that charge a spread of not more than 4%.
 
So far, SSS has released a total of P305 million in social development and business loans this year.
 
To date, SSS granted more than P22 billion in loans to fund over 5,000 projects. These projects have generated nearly 100,000 jobs, benefited over 168,000 students, and created 4,100 additional hospital beds nationwide.
 
As of March this year, the investments of SSS reached P219.82 billion as of end-March while total assets amounted to P242.82 billion. The pension fund has an average return on investment of 12.7%.