Members’ Privilege for Savings Deposit Services
Any member of the Cooperative, in addition to his/her share capital subscription, may open a savings deposit account and/or a time deposit account, which shall earn an interest rate determined by the Board of Directors at the beginning of each fiscal year.
Interest Rates on Savings Deposit
The interest rates on savings deposits shall be computed on the basis of the current market rate as approved by the Board of Directors but in no case shall it exceed the rate prescribed by the Bangko Sentral ng Pilipinas; provided, that the required minimum balance for the month is maintained.
Terms and Conditions Governing Savings Deposits
The following are the terms and conditions governing savings deposits:
- Only savings deposits amounting to Four Hundred Pesos (P400.00) or more shall earn interest.
- Savings deposits not falling below Four Hundred Pesos (P400.00) during any calendar month shall earn compounded interest computed quarterly, based on the lowest monthly balance outstanding during the period.
- Cash deposit shall be accepted, provided, the amount to be deposited does not exceed Ten Thousand Pesos (P10, 000.00) per month.
- Withdrawal from savings deposit amounting to more than Ten Thousand Pesos (P10, 000.00) shall be paid out in a check.
- A fine in the amount prescribed by the Board of Directors at the beginning of each fiscal year shall be imposed on withdrawals after the second withdrawal made during a month.
- Any withdrawal from savings deposit shall be in accordance with the following steps:
- Depositor secures withdrawal slip from the Secretary of the Credit Committee (SCC).
- Depositor properly fills up the prescribed withdrawal slip and submits the same to the SCC.
- SCC enters into the slip Depositor’s savings deposit current balance and certifies correctness of entry.
- SCC forwards the slip to the Audit Committee (AC) for pre-auditing, then forwards the slip to the Treasurer.
- Treasurer prepares the payment voucher. If withdrawal is more than P10,000.00, Treasurer also prepares check in the amount corresponding to the amount being withdrawn.
- The payment voucher together with the withdrawal slip is transmitted to the Chairman for his/her approval and signature on the voucher (and check, if applicable).
- The approved voucher (and check, if applicable) is (are) returned to the Treasurer.
- The Treasurer pays the depositor.
- All withdrawals from savings accounts shall be evidenced by a duly accomplished withdrawal slips.
- Only withdrawal slips containing signatures in ink or other means of writing characterized by permanence shall be honored.
- Withdrawal through an agent or representative of a depositor must be duly authorized in writing executed by the depositor.
Documents on Savings Products
Transactions concerning savings deposits shall be properly documented, to wit:
- All deposits shall be evidenced by a receipt, savings deposit/withdrawal slip, duly signed by authorized signatory.
- Member depositor shall accurately fill up the appropriate deposit slip and shall not hold the Cooperative of any liability for losses caused by any and all inaccuracies in filling up deposit slips.
- Possession of a savings account passbook raises the presumption of ownership and the Cooperative shall not be held liable for payment made to any person who shall present such savings passbook unless the Cooperative shall have received prior notice to such payment and subsequently submit a notarized affidavit of loss from the depositor.
- No entries other than those executed by the Cooperative shall be recorded in the savings account passbook. In the event of any discrepancy between the entries in the passbook and the Cooperative records, the latter shall prevail.
- Savings account passbook shall not be transferable.
Any savings deposit which has been inactive for six (6) months, that is, neither withdrawal nor deposit has been made shall be considered a dormant account and shall not earn interest. The member concerned shall be notified of such amount.
Any regular or associate member in good standing shall be qualified to avail of any type of loan; provided he/she satisfies the requirements that are prescribed by the Board of Directors; provided further, however, that associate members shall not be eligible to Salary Bonus Loans and such other types of loans that are restricted only to regular members.
General Types of Loans
- Long Term Loans
- Personal Loans
- Regular Loan
- Special Loan
- Educational Loan
- Medical Loan
- Personal Loans
- Short Term Loans
- Petty Cash Loan
- Salary Bonus Loan
- Emergency Assistance Loan
Long Term Loans
Maximum Amount of Long Term Loans
As an exception to the provision stipulating the maximum borrowing capacity of a member, the maximum amount that may be borrowed through the different types of Long Term Loans shall be according to the following schedules:
- Regular Loan - up to P85,000.00
- Special Loan - more than P85,000.00
- Medical Loan - up to P50,000.00
- Educational Loan - up to P50,000.00
Terms of Payment of Loans
The terms of payment of loans may be from three (3) months to thirty-six (36) months and payment shall start on the payday immediately following receipt of the loan proceeds by the borrower. If the borrower is a bona fide employee of the PAGASA, his/her loan payments shall be through salary deduction, or if borrower is a retiree or an associate member, loan payments shall be made directly to the Treasurer, by hand or through the bank.
Fine/Penalty in Case of Default in Loan Payment
A fine equivalent to two percent (2%) per month of any unpaid installment shall be imposed.
Loan for a New Member
A new member may be granted a long or short term loan: provided that the required share capital corresponding to the amount of loan being applied for is satisfied by deducting the amount of the balance to the required minimum share capital; and provided further, that loan shall have a term of not more than twelve (12) months.
Release of Loan Proceeds
The proceeds of approved loans shall be released only to their respective borrowers or to his/her duly authorized representative.
Collection of Loan Payments through Salary Deductions
Authorized deduction from the salary of a member to meet his/her existing obligations with the Credit Cooperative shall be given priority over the request of said member that certain amount be deducted for deposit to his/her savings account or other obligations outside of the Cooperative, except for mandatory government deductions.
Direct Payment of Loan Installments
A member whose monthly net take home pay is not sufficient for the repayments for another loan or that his/her monthly net take home pay does not satisfy the P3,000.00 salary threshold prescribed by the GAA, may qualify for another loan; provided, that repayments be made directly to the Treasurer of the Cooperative; provided, however, that he/she can show proof of other source of income; provided further, that his/her application for loan, upon recommendation of the Credit Committee, shall pass approval of the Board of Directors of the Cooperative.
Liquidation of Member’s Accounts
A member who is resigning from the PAGASA or transferring to another agency shall be considered as falling under the involuntary termination of membership and shall therefore immediately liquidate his/her accounts with the Cooperative.
Requisites for Long Term Loans:
Co-makers as Requisite to Securing Loans
Borrower of any Long Term Loan shall have at least ninety (90) days leave credits and three (3) co-makers who are members in good standing and active regular employees of PAGASA, regardless of the loan term.
Number of Co-makers Required in Securing Loans
The following operating policies shall apply in determining the number of co-makers that are required in securing certain types of loan:
- Only one (1) co-maker is required if the borrowing member has at least 200 days leave credits.
- No co-maker is required if the borrowing member has at least 300 days leave credits.
- No co-maker is required when the borrowing member uses his/her share capital as collateral to the loan applied for and that the aggregate amount of loan is equal to or lower than the share capital of the borrowing member.
- A borrowing member who is assigned in a PAGASA field station where there are only two (2) members of good standing, including the borrowing member, shall be allowed to have only one co-maker in a loan.
- A member of good standing can only act as a co-maker in a maximum of four (4) loans at any given time.
- When any of the co-makers in a loan becomes delinquent, resign or transfer from PAGASA and/or goes abroad the said co-maker shall immediately be replaced. The Credit Committee shall inform the borrower accordingly of the need for a replacement.
- No spouse of a borrowing member shall be accepted as a co-maker in any type of loan the said borrowing member is applying for.
- One co-maker shall be added on top of the required number of co-makers for every 30 days or a fraction thereof of leave credits below 90 days.
Relief of Co-makers’ Liability on Overdue Loans
Co-makers shall be exempt from the payment accrued interests and fines on overdue loans, which shall be part of the liability of the borrower.
Liability of Co-makers
The liability of the co-makers in the payment of the loan balance of a borrower with whom they contracted the loan with the Cooperative shall be limited to the amount of the net loan balance which is defined below:
The net loan balance (N) of the borrower shall be the difference between the sum total of the borrower’s share capital, savings deposit and other accounts receivable, if any, and the total loan balances, and excluding the accrued interest and fines, as shown by the formula:
N = Lb – (Sc + SD)
where N = net loan balance; Lb = total sum of loan balances;
Sc = share capital; and SD = savings deposit
The statement of accounts of the borrower shall include a statement of the net loan balance that shall be paid by the borrower’s co-makers, if any.
Collection of loan installments from Co-makers
Collection of the net loan balance from the co-makers shall commence after the grace period prescribed in the third and final notice of collection of due and demandable loan balance has elapsed, which means that the default in payment has already reached three (3) months. Prior to starting the collection from the co-makers, the following stages must be observed:
- When the third and final notice of collection of due and demandable loan balance has been served, the co-makers shall be served notice that after a 15-day grace period elapsed and the loan balance was not settled, the net loan balance shall be collected from them in equal amounts as indicated in the final notice.
- When the grace period elapsed without the borrower settling his/her loan balance, the Credit Committee may recommend for the suspension or termination of the borrower from membership.
- At its discretion, the Board of Directors may suspend or terminate the membership of the borrower.
Requirements for Long Term Loans Under Special Situations
The following policies prescribes additional requirements in securing Long Term Loans under especial situations:
- A member who applies for a loan must have a share capital of not less than the amount shown in Table 1 (Schedule of Maximum Amount of Loan Versus Share Capital) and leave credits of at least 90 days.
- One co-maker shall be added to the required number of co-makers for every 30 days or a fraction thereof of leave credits less than 90 days
- A member may be granted a personal loan whose share capital is less than the required level as shown in Table 1 (Schedule of Maximum Amount of Loan Versus Share Capital); provided that the required share capital balance shall be deducted from the loan proceeds.
Renewal of loans
Any long term loan may be renewed; provided that 50% of the principal amount of the loan has been paid; provided further, that the applicant satisfies all other requirements for granting of loans. Emergency Assistance Loans and Petty Cash Loans may be renewed only when the previous loan has been fully paid.
Computation of Interests on Loans and Rebates
All interests on loans and rebates shall be computed by applying mathematical formulas that may be prescribed by the Board of Directors.
Interests on Long Term Loans
Interests on Long Term Loans that are payable on monthly installments shall be computed according to the following formula:
I = [PL x r x (N + 1)] / 2
where I = total interest on the loan balance; PL = Principal Loan amount; r = rate of interest per month on the balance; N = total no. of loan installments; 2 = constant
- The amount in excess of the maximum amount of Regular Loan, which is P85,000.00, combined in a single loan package shall be treated as Special Loan and therefore, shall be computed with an interest rate of 2.0% per month on the loan balance.
- In renewal of Regular, Special, Medical or Educational Loans, a rebate shall be computed in favor of the borrower in accordance with the following formula:
R = (Bal x r x n)/2
where R = the amount of rebate; Bal = the outstanding loan balance; r = the interest rate corresponding to the type of loan; n = total number of the remaining unpaid installments; and 2 is a constant number.
- Advanced payment of installments shall entitle the borrower with corresponding rebate; provided there has been no default in payments, and shall be computed as follows:
- When the loan balance is more than 50% of the Principal Loan:
R = (Pa x r x Na)/2
- When the loan balance is less than 50% of the Principal Loan:
R = (Pa x r x Na)/2
where R = is the amount of rebate; Pa = amount paid in advance; r = rate of interest on the type of loan; Na = the number of monthly installments paid in advance; and 2 (or 4) is a constant number.
- When the loan balance is more than 50% of the Principal Loan:
Long Term Loans
Operating Policies Governing Petty Cash Loans
- Any member who has not incurred default in any loan may avail of petty cash loan of not more than P4000.00 for every application, payable in two (2) months.
- Subsequent petty cash loans of not more than P4, 000.00 for every application may be granted to the same member; provided the previous petty cash loan or loans had been fully paid.
- Each application for petty cash loan for the first aggregate of P4, 000.00 during the same fiscal year shall be charged a service fee of 2%.
- Each application for petty cash loans exceeding an aggregate of P4,000.00 to be drawn in the same fiscal year shall be charged 4% service fee.
Processing of Application for Petty Cash Loan
Every application for petty cash loan shall be processed according to the following steps:
- Applicant must file properly accomplished petty cash loan application with the Assistant to the Treasurer of the Cooperative (ATC);
- ATC stamps date and time of filling on the application. The application should be filed not later than 9:00 AM of the day the loan is desired. The application filed after 9:00 AM shall be considered for the following day;
- ATC verifies if applicant has outstanding petty cash loan balance. If a balance exists, ATC requires applicant to settle his/her account;
- If applicant has no more balance, ATC will cause the issuance of a certification of the monthly net take home pay of the applicant and also certifies that applicant has no balance and then, forward the application to the Credit Committee;
- The Credit Committee evaluates the application and if found meritorious, approves the application and then, forward the same to the Audit Committee for pre-auditing;
- If the Audit Committee finds the application in order, the same is forwarded to the Treasurer for the preparation of the voucher, which shall again pass the Audit Committee;
- From the Audit Committee, the voucher is forwarded to the Chairman for final approval, after which the voucher is returned to the Treasurer for payment of the petty cash loan; and
- The borrower acknowledges receipt of petty cash.
Fixed Amount of Salary Bonus Loan
The fixed amount of Salary Bonus Loan shall be equivalent to one-half of the amount of the thirteenth month salary of any member and/or non-member, which may be granted in May and November of every year. Any member or non-member, who is an employee of the PAGASA, may apply for a Salary Bonus Loan in any month between December to May of the following year and between June to November of the same year.
Rate of Interest on Salary Bonus Loan
The loan shall bear an interest rate of 2% per month for members and 3% for non-members.
Emergency Assistance Loan
An Emergency Assistance Loan (EAL) with a maximum amount of Ten Thousand Pesos (P10,00.00) may be granted to a qualified borrower without interest and payable within a period of one (1) year; provided, however, that four percent (4%) service fee shall be deducted from the loan proceed in advance.
Reasons for Granting Emergency Assistance Loan
The loan shall only be granted for the following reasons:
- Hospitalization due to illness or accident of a member or his/her immediate member of family, which need not entail confinement to any hospital or clinic; provided emergency service of a physician is required;
- Death of an immediate member of the family of a member; and
- Loss or damage of property of a member due to natural or man-made disaster even as the residence of the borrowing member where loss or damage was sustained has not been declared part of a calamity area.
Supporting Documents Required when Applying for Emergency Assistance Loan
Every application for Emergency Assistance Loan must be supported by any or all of the following documents:
- Medical Certificate issued by an attending physician shall be required as supporting document for EAL, which must be attached to the loan application or submitted within thirty (30) days after the filing of application; provided if no medical certificate is submitted, the loan shall be treated as a Special Loan with corresponding Special Loan interest to be imposed.
- Birth Certificate or Marriage Contract of the patient, as the case may be, shall be required as supporting document for EAL, in addition to Medical Certificate, if patient is other than a member of the Cooperative.
- Death Certificate and Birth Certificate or Marriage Certificate of the deceased shall be required if the reason for applying an EAL if death of an immediate member of the family of a member.
- Barangay or higher Local Government Unit (LGU) Certificate attesting that a disaster caused loss or damage to the property of a member or a notarized affidavit of loss or damage due to disaster by the borrowing member shall be required if the reason for applying an EAL is loss or damage to property due to natural or man-made disaster.
Processing of Application for Emergency Assistance Loan
Every application for Emergency Assistance Loan shall undergo the following steps:
- Borrower fills up application form and submits the same together with the required documents (Medical Certificate, if purpose of loan is to pay cost of emergency hospitalization; Certificate attesting that the member is a disaster victim – at least from the Barangay Chairman, if purpose of loan is to cover expenses on emergency repair of house; or Death Certificate of deceased immediate dependent of member, if purpose of loan is to cover expenses on funeral services) to the SCC. A certification of the monthly net take home pay of the applicant is also required to ascertain that the applicant is eligible for a new loan;
- SCC checks if applicant has an outstanding EAL balance. If applicant has a balance, application is returned without action to the applicant with an advice that he/she may qualify to be granted an EAL if he/she settles first his/her outstanding EAL balance. If applicant has no balance, the Credit Committee computes for the loan proceeds, taking into account the monthly net take home pay of the applicant. After computation of the loan proceeds, the Credit Committee approves the application and forwards the processed application form, which now represents the loan note, to the Audit Committee (AC);
- AC pre-audits the loan note, and then forwards the same to the Treasurer for preparation of payment voucher. The loan note together with the voucher is returned to the AC for auditing of the voucher; and
- AC forwards the audited voucher and attachments to the Chairman for final approval of the loan and then the Treasurer receives the approved voucher for payment of the loan to the borrower.
Computation of Loan Proceeds
Schedule of Maximum Amount of Loan Versus Share Capital
The maximum amount of loan that a member may borrow, notwithstanding the given formula: PL = 3(S + Sc), shall be based on the schedule given in Table 1 below:
(paid up share capital)
Additional Share Capital for Incremental Increase of Loan
An additional amount of One Thousand Pesos (P1,000.00) in share capital shall be required to be deposited for every Five Thousand Pesos (P5,000.00) increase in the amount of loan exceeding One Hundred Thirty Thousand Pesos (P130,000.00).
Preference of Share Capital in Securing Loans
Members whose share capital exceeds the loan ceiling based on the formula: PL = 3(S + Sc), may borrow the full amount of his/her share capital.
Schedule of Interests and Service Fees on Loans
Interests on all types of loans and service fees shall be deducted from the gross proceeds of the loans. The schedule of interest and service fees on loans is as follows:
- An interest rate of 1.2% per month shall be charged for the balance of every Regular Loan.
- An interest rate of 1.5% per month shall be charged for the balance of every Educational Loan or Medical Loan.
- An interest rate of 2.0% per month shall be charged for the balance of every Special Loan.
- A simple interest rate of 2.0% per month shall be charged for every Salary Bonus Loan taken by members of the Cooperative.
- A simple interest rate of 3.0% per month shall be charged for every Salary Bonus Loan taken by any PAGASA employee who is not a member of the Cooperative.
- Petty Cash Loans are interest-free and payable in two (2) months, however, a service fee of 2% shall be charged for the first aggregate total of Four Thousand Pesos (P4,000.00) of Petty Cash Loan and a higher service fee of 4% for the next aggregate total of Petty Cash Loan taken during the same fiscal year.
- Emergency Assistance Loans are interest-free; however, a service fee of 4% shall be charged on every loan.