Deped told to let Landbank handle teachers’ salary loan deductions

 

By Rose de la Cruz

 

To ease the burden of deducting the loans obtained by teachers from private lenders in their salaries, the Land Bank of the Philippines is proposed to do this service, being the depository bank of the state.

 

The proposal was raised by Rep. Salvador Belaro Jr., 1Ang Edukasyon partylist and assistant majority leader, so that the staff of DepEd can do their main function and core competencies.

 

Tens of thousands of public school teachers are saddled with debt, especially from salary loans of banks and other financial institutions. This is the painful reality. Public school teachers get loans to make ends meet, pay for the education of their kids and other dependents, buy medicines, and finance medical emergencies, he said.

 

He said he understands the reluctance of the DepEd to function as the intermediary between the teachers and the lenders.

 

DepEd administrative personnel need not be burdened with the extraneous task of salary deductions of personal loans the teachers get from lenders. This salary deduction function is a nuisance distraction to DepEd staff because it takes time away from doing their primary roles of attending to the official concerns of DepEd.

 

He said he understands the impact of this salary deduction situation of teachers on the banking community, some of whom have teachers as among their major clientele base.

 

As a compromise, he proposed a win-win solution to all concerned by asking the DepEd to enter into a memorandum of agreement with its depository bank, the Land Bank of the Philippines. With the MOA, the DepEd can transfer to Landbank all the salary deduction processing roles and functions. In the agreement, DepEd can also have Landbank conduct the needed financial literacy and advise the teachers to get their finances in order.

 

In this scenario, Landbank’s gain is the new business and the service charges that necessarily come with being the processor of the salary deductions. Landbank can also offer salary loans to the teachers and it should do so at rates that are equal to or preferably lower than those of private lenders.

 

Dealing with the private lending institutions is not a core function nor competency of the DepEd. That would be more in the expertise of Landbank.

 

It is much better for DepEd to let Landbank to handle this situation.Teachers still get to get and pay their loans through salary deduction. DepEd does not turn out as the bad guy. Landbank gets hundreds of thousands of clients. Private lenders continue to do business with the teachers, but now with Landbank as the intermediary, not the DepEd.

 

Disruption is avoided. Possible lending catastrophe averted.

 

 

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