What is Multi-Purpose Loans (MPL) in the Philippines

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As any other employer, Filipino government agencies cannot stay irrelevant to struggles its employees face, be it a working or a financial conundrum. The Government Service Insurance System (GSIS) and Pag-IBIG Fund implemented multi-purpose loans (MPL) to rescue government members from imminent financial difficulties. The purpose of this initiative is to release the economic burden and prevent people from accumulating a debt amount to the point they will be left without any retirement and other benefits.

In this article, we will explain how GSIS and Pag-IBIG MPLs work, who is eligible for such a loan, what the MPL loan requirements are, and how to apply for a MPL loan online or offline.

What is the GSIS Multi-Purpose Loan and its Purpose?

The multi-purpose loan (MPL) granted by the Government Service Insurance System (GSIS) is a financial tool that helps the GSIS members cover their existing GSIS debts by providing them with an additional credit line. MPL consolidates the loans that the member is unable to pay and liquidates their due balances. In the end, the member is left with one loan, which usually has less strict terms, lower interest rates and smaller payments.

As the name states, the GSIS multi-purpose loan covers various types of loans such as salary, emergency, and educational assistance loans with one exception ― housing loans.

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Who is Eligible for the GSIS Multi-Purpose Loan?

MPL is exclusive to GSIS regular and special members. The latter include constitutional commissioners, judges, etc. To be eligible for a loan, they still have to match the following criteria:

• To have made payments for at least three months
• To be an active paid member (not on a leave)
• To have no open criminal or administrative cases
• To belong to a agency with a status other that ‘Suspended’ and a memorandum of agreement on MPL
• To have a net pay exceeding the sum required under the General Appropriations Act upon all mandatory deductions.

What are the MPL Requirements for Application?

GSIS doesn’t require its members to provide an overload of paperwork to apply for an MPL loan. The only documents you will need are:

• A filled-in application form (1) and
• A photocopy of the Unified Multi-Purpose ID (UMID) card or eCard.

How to Apply for a Multi-Purpose Loan Online and Offline?

There are four ways to apply for a GSIS MPL. If you want to apply at your convenience, you can apply for a multi-purpose loan online. Here are the four processes, just follow the step-by-step procedure:

Online via eGSISMO:

• Log in to your personal account.
• Go to Loans Application and select Multi-Purpose Loan. Choose whether you want to request a new one or would like to extend the existing one.
• Upload your picture holding either your UMID card or your temporary. If you don’t have the UMID or eCard at hand, 2 valid IDs will do. The images should be JPEGs or PDFs.
• Read the Loan Agreement, confirm it, and click Save.

Via email

• Fill in the application form.
• Take a picture of you holding either your UMID or eCard. You can also present 2 valid IDs if your UMID and eCard are not available. Make sure to take a shot of the front and the back of your IDs.
• Convert your paperwork into JPEG or PDF files.
• Email your files to the relevant GSIS branch. You can find the list of GSIS offices’ emails in the Contact Us (2) section on the official website.

Via the GSIS Wireless Automated Processing System (GWAPS) Kiosk

• Go to the nearest GWAPS kiosk.
• Put your UMID/eCard in the card reader and touch the biometrics scanner with your finger. Your data will then appear on screen.
• Press the Loan Windows and go to Multi-Purpose Loan. The system will show you the estimated loan terms. Now you may modify the loan amount or the payment term as per your liking.
• If you agree with the terms and wish to proceed with your application, put the same finger on the scanner.

Once you submit your application, you will have to wait for an email or a text message from GSIS regarding the loan decision and the approximate calculation.

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What is the loanable Amount?

The maximum amount GSIS can loan a member is calculated considering the member’s Period with Paid Premium (PPP), Basic Monthly Salary (BMS), and the employment status.

All members are entitled to receive 14x of their BMS, however the maximum loanable amount should not exceed PHP 3 mln. While submitting the application, a GSIS member should indicate a preferable loan sum corresponding to their PPP. If they fail to do that, GSIS will take it if they’d applied for the maximum amount they are qualified for.

For your convenience, we have summarized the principle of calculating the maximum loanable amount in the table below:

PPP	Maximum Loanable Amount
	Permanent Without Term/Tenure	Permanent and Non-permanent With Term/Tenure
3 -19  months	1 x BMS	—
20 months to less than 10 years	3 x BMS	3 x BMS
3 years to less than 5 years	4 x BMS	4 x BMS
5 years to less than 10 years	7 x BMS	7 x BMS
10 years to less than 15 years	10 x BMS	10 x BMS
15 years and above	14 x BMS	14 x BMS

What is the GSIS Multi-Purpose Loan Term?

The loan terms are based on the employment status, PPP, and BMS. The terms for the regular members are outlined in the table below:

PPP	Loan Terms
	Permanent Without Term/Tenure	Permanent and Non-permanent With Term/Tenure
3-19 months	3 years	—
20 months to less than 3 years	5 years	2 years
3 years to less than 5 years	5 years	2 years
5 years to less than 10 years	5 years	2 years
10 years to less than 15 years	7 years	5 years
15 years and above		5 years

Note that special members have a maximum loan term of 7 years.

What are the Interest Rates for GSIS Multi-Purpose Loan?

GSIS MPL annual interest rates also depend on the period that a member has chosen to pay Premiums:

• 8% in cases when a PPP is less than 3 years
• 7% in cases when a PPP is over 3 years.

What is GSIS Multi-Purpose Loan Plus (GSIS MPL PLUS)?

GSIS MPL Plus (3) is an upgrade of the regular MPL program based on the member’s feedback and suggestions. As a result, the new initiative introduced in April 2022 manages to offer more flexibility and better fulfills the needs of the GSIS members.

Just as in the case of the classic MPL, your employment status, PPP, and BMS will determine how much and for how long you’ll be able to borrow within MPL Plus. Take a look at the tables below to determine your potential maximum loan sum and term of payment:

PPP	Maximum Loanable Amount
	Permanent Without Term/Tenure	Permanent and Non-permanent With Term/Tenure
3 -19  months	1 x BMS	—
20 months to less than 10 years	3 x BMS	3 x BMS
3 years to less than 5 years	4 x BMS	4 x BMS
5 years to less than 10 years	7 x BMS	7 x BMS
10 years to less than 15 years	10 x BMS	10 x BMS
15 years and above	14 x BMS	14 x BMS

 

PPP	Loan Terms
	Permanent Without Term/Tenure	Permanent and Non-permanent With Term/Tenure
3-19 months	3 years	—
20 months to less than 3 years	5 years
3 years to less than 5 years		2 years
5 years to less than 10 years	10 years
10 years to less than 15 years		5 years
15 years and above		9 years

Note that the conditions of the program have changed. Here are some differences between MPL and MPL Plus:

• The credit limit has been increased up to PHP 5 mln, and the maximum payment term for permanent members ― up to 10 years.
• The 8% rate has been canceled, and the 7% interest was made applicable to all borrowers. It is calculated and added in advance.
• GSIS members with arrearages in the housing loan are now qualified to apply.

What are the differences with GSIS MPL?

GISIS MPL Plus (3) is the enhanced MPL program that gives active members an additional credit line that will help them consolidate and settle their outstanding GSIS loan balances. The basis will depend on the borrower’s employment status, periods with paid premiums, and basic monthly salary.

The MPL program was enhanced based on the member’s feedback, resulting in offering a program that best suits their needs. The difference between GSIS MPL Plus from GSIS MPL includes the following:

• Credit limit from PHP3 million to PHP5 million
• A uniform interest rate of 7 percent computed in advance will be applied to all borrowers
• Relaxed eligibility conditions to all prospective applicants. Previously, members with arrearages in their GSIS Financial Assistance Loan (GFAL) and housing loan are not qualified to avail of MPL. Now they can avail of MPL but their arrearages under GFAL will be deducted from the proceeds of their loan.
• First-time availees will have a one-time waiver on the outstanding surcharges on due and demandable GSIS loan accounts.

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What is Pag-Ibig Multi Purpose loan

All GSIS-covered employees are obligated to join the Pag-IBIG Fund.The main purpose of the Fund is to provide its members with housing through a savings scheme. It also offers investments in government securities, short-term and multi-purpose loans.

Pag-IBIG MPL (4) is a cash loan intended to help the Fund members with their financial needs and miscellaneous expenses that might range from initial business investments to small house improvements.

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Who is Eligible for a Pag-IBIG Multi-Purpose Loan

You can request an MPL from the Fund, if you comply with the following criteria:

• You have accumulated savings in Pag-IBIG for over 2 years.
• You made at least one contribution within the last 6 months.
• If you already have a Housing Loan, MPL and/or Calamity Loan, they must not be in default.
• You can prove your income source.

How to Apply and Pay for a Pag-IBIG Multi-Purpose Loan

You can request a Pag-IBIG MPL either online, via Virtual Pag-IBIG or in-person in the preferable Pag-IBIG Fund office. Submit your application form and proof of income, and it’s done.
You can pay your loan in 24 or 36 months. As an employed member, you can negotiate with your employer so that they deduct loan charges from your salary every month. If you are self-employed, work abroad, or want to settle your payments earlier, you can pay online, in the Fund office, or through a certified partner of the Fund as per your convenience.

How to Calculate a Pag-IBIG Multi-Purpose Loan

If you meet the loan requirements, you can borrow 60 to 80% of your total regular savings, which are a sum of your contributions every month and the dividends you’ve earned so far. If you have been saving for over 120 months or more, you can request up to 80%, otherwise, the maximum percentage you are getting won’t exceed 60%.

To determine how much you can get as a Pag-IBIG multi-purpose loan, you should multiply your membership term by your monthly contribution, and then calculate the percentage.

Let’s say you have been making monthly payments of PHP 1,000 for 5 years, and that means you can loan 60 percent of your savings. So the loanable amount will come to 60 x 1,000 x 60% = PHP 36,000.

Suppose you decided to postpone taking an MPL. Your saving term has grown to 11 years, or 132 months. Now you are entitled to 80% of your total contributions. The sum that you are allowed to take out will be 132 x 1,000 x 80% = PHP 105,600.

How much can I borrow under the Pag-IBIG MPL?

Qualified members can borrow up to 80% of their total Pag-IBIG Regular Savings, which consist of their monthly contributions, their employer’s contributions, and accumulated dividends earned.

If you have an outstanding Pag-IBIG Calamity Loan, the amount you may borrow shall be the difference between 80% of your total Pag-IBIG Regular Savings and the outstanding balance of your Pag-IBIG Calamity Loan.

How do I pay my Pag-IBIG MPL?

The loan is payable within 36 months and comes with a deferred first payment. Members may also opt to pay their loans in 24 months. If you are an employed member, you may pay your loan amortizations via a salary deduction arrangement with your employer. Should you wish to accelerate or advance your payments, you may do so via Virtual Pag-IBIG, at any Pag-IBIG Fund branch near you, or through any of the accredited collecting partners’ outlets or their online payment channels.

Self-employed individuals or Overseas Filipino Workers may pay their loan amortizations via Virtual Pag-IBIG, at any Pag-IBIG Fund branch near you, or through any of our accredited collecting partners’ outlets or their online payment channels.

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SUMMARY

Unexpected financial troubles could happen to anyone, but there’s no need to immediately sell your car or house. If you are a GSIS or a Pag-IBIG member, consider joining the MPL program. The government is able to consolidate your current loans, helping you out with lower interest rates and prolonged payment terms. However, if you don’t qualify for a multi-purpose loan, consider scoring an online loan from a reliable lender such as Digido.

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