Press Release
September 26, 2012

ARMM in dilemma over P2.15 billion unpaid premiums,
loan amortizations, says Drilon

The current administration of the Autonomous Region of Muslim Mindanao (ARMM) is in a quandary regarding the payment of unpaid and unremitted contributions and loan amortizations to the Government Service Insurance System (GSIS) and Home Development Mutual Fund (HDMF) to the tune of P2.15 billion, said Senator Franklin M. Drilon.

Of the amount, Drilon said, only P907.06 million corresponds to unpaid shares in premium and loan amortizations, while a bigger portion of P1.24 billion refers to interests that accrued over the years due to the non-and late payments.

"This is a ghost of the past that continues to haunt us. This is a manifestation of how the past administration and the past leaders of ARMM remissed in their obligations to the public," said Drilon who also chairs the Senate Committee on Finance that reviews the country's proposed expenditures.

"The interests would continue to balloon if the problem is not settled at the soonest time. The interests would accumulate to a point that it has already surpassed the principal amount like where it is now, and to a point where the government budget will only go to the payment of interest rates," said Drilon.

Drilon vowed to look into the problem which he described as "a source of disappointment and burden for teachers and retired personnel of the Department of Education in the ARMM."

"This sorry scenario continues to frustrate our teachers in the ARMM because they could not avail of their GSIS and Pag-IBIG benefits like housing and salary loans due to the discrepancies in the premiums," stressed Drilon.

Drilon said that based on the document submitted to him by ARMM Governor Mujiv S. Hataman, the discrepancies in the contributions to the GSIS started in 1997. A memorandum of agreement was entered into in 2004 in a bid to settle the dispute.

However, it is only in 2006 that the Congress was able to appropriate P250 million for the payment of unpaid contributions, but only P127 million was released by the Department of Budget and Management and which the GSIS applied to both the principal and the interest, explained Drilon.

He also said that there appears to be a misunderstanding between the DepEd-ARMM and the DBM and the GSIS insofar as the payment of interest rates is concerned.

Of the P2.15 billion, Drilon said, P877.25 million and P213.15 million refer to unremitted contribution to the GSIS for the period 1997 to 2003 and 2004, respectively.

Another P877.24 million corresponds to unremitted loan deductions for 17 months within 2001 to 2004. Also, P243.83 million is for the unremitted contributions and loan amortizations to the Pag-IBIG Fund.

The DepEd-ARMM owes the Philippine Public School Teachers Association (PPSTA) an amount of P31.93 million which corresponds to the unremitted loan payments for the period of April 2003 to September 2005, noted Drilon.

Lastly, P160.39 million is being charged by the GSIS for delayed payments.

"The situation merits an investigation. It has to be settled before a similar case blows up in our face," said Drilon.

Hataman, meanwhile, has vowed to go after the officials responsible for the mess.

This has resulted in demoralization among teachers in the ARMM. According to ARMM-DepEd Secretary Jamar M. Kulayan, "they received less than the amount actually due them for retirement because their creditable service was reduced corresponding to the actual number of their unremitted contributions and are receiving lesser monthly retirement benefits."

Summary of unremitted contributions and amortizations of DepEd-ARMM

Item Period Covered Principal Interest Total (P) 
Unremitted contributions to the GSIS 1997 to 2003  384,793,448 237,829,920 622,623,368
Unremitted loan deduction 2001 to 2004 309,854,512 567,394,099 877,248,612
Unremitted contributions to the GSIS 2004 64,712,281  148,438,613  213,150,894
Penalty for delayed payments 2003 to 2011   - 160,391,189 160,391,189
Unpaid Pag-Ibig contributions and
2001 to 2006 115,765,260 128,066,679 243,831,939
PPSTA  2003 to 2005 31,932,132  - 31,932,132
 Total   907,057,633  1,242,120,500  2,149,178,133
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