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PNP Pensioners Seek Automatic Deduction on Loan Amortizations

Consistent with the Association’s thrust of providing its members with fair and equitable returns for the use of their funds, AMWSLAI once again distributed dividends, as approved by the Bangko Sentral ng Pilipinas, at the rate of 9% amounting to P1.590 billion for the year 2014. The rate is a marked improvement from the prior year’s dividend rate of 8.75%. Payment of said dividends were made in July 2014 in the form of advance dividends and in February 2015. Retired personnel of the Philippine National Police (PNP) are asking the Chief of the PNP, to implement an Automatic Pension Deduction System (APDS) immediately to prevent the adverse effects of non-deduction of their monthly loan amortizations from their pensions.

In a statement, the PNP pensioner said “the APD is similar to what was implemented by the Armed Forces of the Philippines (AFP) for its pensioners whom a great majority also rely on savings and loan associations for their financial needs just like us.”

They pointed out that the system is also in line with the provisions of the law, particularly Section 7 of Republic Act 8367, “that authorizes the treasurer, cashier or paymaster of the office – notwithstanding the provision of any existing law, rule and regulation to the contrary – to make deductions from a member’s salary, wage, income or retirement pension pursuant to the terms of his loan, and all other deductions authorized by the member, and to remit such deductions to the association concerned.”

In their appeal, the police pensioners said while their pensions are release without delay under the present PNP leadership, they may incur penalties and surcharges as a result of the non-deduction of the amortizations to the loans they obtained while still in active service and even after their retirement.

“We are very grateful to the PNP leadership for all the efforts in ensuring the well-being of police pensioners, particularly the prompt release of pensions and other benefits of retired PNP personnel,” they said.

“Thus, we would like to reciprocate the leadership’s laudable efforts by paying our loans regularly so as not to tarnish the good image of the PNP,” they said.

Records show most of the loans obtained by PNP retirees were for small-scale business and livelihood projects, educational and medical expenses and for emergency needs of the members and their families.

In a related event, retired Col Ricardo L Nolasco Jr., Chairman of the Board and President of AMWSLAI and the incumbent President of the Confederation of Non-Stock Savings and Loan Associations, said the association has also sent a letter to the PNP to pursue the request of the pensioners APDS that was aired by AMWSLAI’s PNP pensioner member-borrowers themselves during the recent AMWSLAI Annual General Membership Meeting held at the association’s headquarters in Quezon City in December 2015.

According to Nolasco, the pensioners have expressed apprehensions that the penalties and surcharge imposed on their loans, while legally allowed, would greatly diminish the monthly pension they receive from the PNP.

Thus, Nolasco said “it would be prudent and in the best interest of the PNP pensioners if the request of an APDS would be granted and implemented immediately.” Nolasco further stated “the law governing the Non-Stock Savings and Loan Associations, the General Appropriations Act, the opinion of the PNP Legal Service, and the directive of the Department of Budget and Management allow the deduction of loan amortizations from the pensions of PNP retirees.”

He also pointed out that the automatic deduction for loans contracted by PNP personnel after retirement or separation is not tantamount to garnishment of government money as others may have asserted.

He emphasized that attachment by execution are legal proceedings which require court orders. Thus, the automatic deduction for loan contracted after retirement or separation is not prohibited under Section 77 of RA 6975. On the other hand, Section 7 of RA 8367 requires the PNP treasurer, cashier or paymaster notwithstanding the provision of any existing law, rules and regulations to the contrary, to make deductions from the retirement pensions of AMWSLAI-member borrower pursuant to the terms of the loan and to remit such deductions to the Association.

It was further emphasized that the application of Section 77 of RA 6975 as basis not to deduct the pensioner’s obligations is wrongly placed as this would amount to the impairment and/or elimination of the obligation of the contracting parties. Article III Section 10 of the Constitution specifically provides that “no law impairing the obligations of contracts shall be passed.”

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