This document outlines guidelines for employers to avail of a program to condense penalties for unremitted or delinquent employee loan amortizations due on or before April 1, 2010. Key details include: 1. The program applies to penalties on loans due before April 1, 2010, with interest at 10% annually. 2. Employers have 6 months to avail of the program by fully paying arrears or submitting an installment proposal. 3. Upon settling arrears, employees' short-term loan privileges will be restored subject to existing guidelines.

1. SOCIAL SECURITY SYSTEM
Y M
CIRCULA NO. 2010-005
AR
TO:
OYERS
ALL EMPLO
SUBJECT:
GUIDELINE FOR THE CONDONA
ES E ATION OF
PENALTIESS FOR UNREMITT
TED OR
DELINQUENT LOAN AMORTIZAT
A TIONS OF
EMPLOYEE BY EM
ES MPLOYERS DUE ON
OR BEFOR 01 APRIL 2010
RE L
Pursuant to the implementation of the Contribution
P
Penalty Cond
P donation Proggram for Emp
ployers, and
the approval of the Penal Condonati
t lty ion Program
for
f Unremitted or Delinque Loan Amo
ent ortizations of
Employees b Employers by the Pres
E by s sident of the
Philippines on 03 June 20
P 010, as recom
mmended by
the Social Security Commission (S
t SSC) under
Resolution No. 238-s.2010 dated 25 M
R March 2010,
t following guidelines an procedures are hereby
the nd s
issued: or com
i mplicated term
ms.
WHAT ARE T
W THE TERM AND
MS
WHO CAN AVAIL OF THE PRO
N F OGRAM CO
ONDITIONS
• Employers who are delin
s nquent in the r
remittance of 1. The Program shall apply only to pe
m y enalties on
their employees' loan amortizations, including the
a un
nremitted or delinquent loan am
r t mortizations
following: (pr
rincipal and interest) due on or befor 01 April
re
2010.
• Those with pending or ap
h pproved proposal under the
Int
terest is compu uted based on the interest r
n rate of 10%
Installment Payment Sch
t heme of the SS
SS
per annum. It is defined as the amount due on the loan
e
• Those with pending or approved application under
h a until its full settle
ement. In case of the expiry of the two-
e
the Progra for Accepta
am ance of Prope erties Offered year loan amortiz zation period, interest is com
mputed from
through Da
acion en Pago of the SSS; an
nd such date up to the filing of ap pplication for c
condonation
under this Progra am.
• Those with pending cases before the SSC, Courts
h
or the Offic of the Prose
ce ecutor. enalties on loa amortizatio
Pe an ons falling due thereafter
e
shall not be cove ogram but shall be paid as
ered by the Pro
• Employers with
s emp
ployees with delinquent
pre
escribed under existing guide
r elines.
loans/arrea
ars.
• Employers who are also delinquent in the payment
s
of their S
SSS contributioons must first settle their
t 2. Period of the Program
delinquent contributions in full through outright
s
Avvailment of the Program is w
e within six (6) m
months from
payment o submission of an installm
or ment proposal
the issuance of th correspondi office issua
e he ing ances.
under the SSS Condona ation Law of 20 (R.A. No.
009
9903)
ww
ww.sss.gov.ph | SSS Main Building, Eas Ave. Q.C. | phone 917.7777 | Trunklin 920.6401
h st ne

2. 3. Restoration of loan privileges
Upon remittance of the delinquent loan amortizations in full or approval of the installment proposal of the employer under this
Program, the short-term member loan privileges of their employees shall be restored, subject to the existing guidelines on
salary loan granting. However, said privileges shall again be suspended in the event of violation of any terms and conditions
hereof.
4. Loan amortizations paid before effectivity of the program
Employers who settled all their loan amortization arrears before the effectivity of the Program shall not have their past
penalties waived and refunded. Since application of payments is to penalty and interest first, payments to penalties can no
longer be waived which differs from policy on contribution where payments are applied to principal first.
Those who settled their arrears partially before the effectivity of the Program should pay the balance in full or in installment
under the Program for their accrued penalties corresponding to said remaining arrears to be waived.
5. Effect on pending or approved proposals under the Installment Payment Scheme of the SSS
Upon remittance of the delinquent loan amortizations in full or approval of the installment proposal of the employer under this
Program, a pending or approved proposal submitted under other rules issued by the SSC allowing employers to pay their
delinquencies in installment shall be considered withdrawn and the corresponding post-dated checks submitted shall be
returned.
6. Effect on pending or approved application under the Program for Acceptance of Properties Offered through
Dacion en Pago of the SSS
Upon remittance of the delinquent loan amortizations in full or approval of the installment proposal of the employer under
this Program, a pending application submitted under other rules issued by the SSC allowing employers to settle their
delinquencies through dacion en pago shall be considered withdrawn.
Further, upon submission of an installment proposal by an employer under this Circular, an approved dacion en pago
application submitted under such other rules shall be considered annulled if the title of the property has not been transferred
yet to the SSS.
7. Effects of failure to remit or default in installment
In case the employer fails to remit in full the required delinquent loan amortizations or defaults in the payment of any
installment under the approved proposal within the period provided therein, the penalties are deemed re-imposed on the
remaining balance of the amount due after payments made under the approved installment proposal under this Condonation
Program has been considered, to accrue until the delinquent account is paid in full.
HOW TO AVAIL OF THE PROGRAM
Modes of Availing the Program
1. An employer has the following modes of availing the Program:
• Remit within the period of the Program the full amount of delinquent loan or portion in arrears through any SSS
Branch with tellering facility or authorized collection agent of the SSS; or
• Submit a proposal within the period of the Program to pay the delinquent loan amortizations in installment to the
SSS Branch having jurisdiction over its place of business.
In any case, the employer shall first secure a loan delinquency report from its servicing branch for reconciliation and
confirmation, and as basis for payment. Upon payment or submission of an installment proposal, it shall also submit
the corresponding Collection List (SS Form ML-2) within the period of the Program.

3. 2. Installment Proposals
If the employer opts to submit an installment proposal, the Head of the SSS Branch to which the proposal was submitted
shall give due course to approve and grant the same within five (5) working days from date of submission, subject to the
following requirements:
• Together with the proposal, the employer shall submit an instrument promising to pay the balance of the
delinquency in equal monthly installment within a period not exceeding twenty-four (24) months from the date of the
approval of the proposal;
• The first monthly installment shall fall due on the 10th day of the succeeding month after the approval of the
proposal.
• The installment payments shall bear an interest of three percent (3%) per annum based on a Schedule to be issued
by the SSS (Annex A).
• If the employer is an association, partnership, corporation or any other institution, its managing head, director or
partner shall sign the proposal and the promissory note, attaching therewith the Secretary’s Certificate in case of a
corporation or an equivalent instrument in case of an unincorporated employer, authorizing such officer to sign the
proposal on behalf of the employer.
• In case the employer has already ceased its operations, its managing head, director or partner shall sign the
proposal and the promissory note in his personal capacity.
3. Post-approval Requirements
Upon approval of the proposal, the employer has the following obligations:
• It shall issue the corresponding post-dated checks payable to the SSS to cover all monthly installments, and cause
the replacement thereof whenever necessary (e.g., change in check signatory, closure of account). The employer
shall issue a separate set of post-dated checks payable to SSS if the employer also has an approved installment
proposal under the SSS Condonation Law (R.A. No. 9903).
• It shall remit current loan amortizations of its employees every month as they fall due.
Failure by the employer to comply with the above requirements shall automatically terminate the approved
installment proposal and shall have the same effect as in case of default in the payment of any installment under the
approved proposal.
All other provisions of existing rules and regulations not covered by this Circular shall continue to be observed and
implemented.
Please be guided accordingly.
(sgd)
SEC. ROMULO L. NERI
President and CEO
Approved by:
SOCIAL SECURITY COMMISSION
(sgd)
THELMO Y. CUNANAN
Chairman