Resigning? SSS Will Deduct Your Loan Balance from Your Last Pay

The purpose of this article is to inform the public about this policy of the Social Security System (SSS), the government-owned insurance company for those employed in the private sector.

I just learned about this a few months ago when my company announced a workforce reduction program. Among the sad discussions is about this policy of SSS regarding loans in cases of resignation or retrenchment. Section G-2 of the SSS Loan Terms and Conditions (at the back of the loan application form) explicitly says the following:
"The employer shall deduct the total balance of the loan from any benefit/s due to the employee and shall remit the same in full to SSS, in case the member-borrower is separated voluntarily (e.g., retirement or resignation) or involuntarily (e.g., termination of employment or cessation of operations of the company)."



In other words, you will be required to pay the rest of your loan (including the interest) when you change employer or employment status. If your last pay and benefits won't suffice, your next employer will require you to pay the rest. I'm taking about up to ~33,000 Pesos plus 10% interest per year. That can be huge amount for those trying to make the ends meet.

So there you go, if you're thinking of resigning or if you think you will lose your job anytime soon, consider the policy above and see if it will be better to postpone the loan.


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  2. Thank you for giving such clarification! By the way, here is a helpful post about the courtesy of resigning from your work: https://ndvlaw.com/how-to-resign-properly-in-the-philippines/.

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  7. Hi just want to check if someone can answer this question. If your loan has already been approved for a week already and the status is on check generated but then due to the stressful work he is having right now he suddenly decide to resign. Will the employer hold the loan?

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