debt overload among government employees

The joke among government workers that their net take home pay cannot take them home owes mainly to debt overload. Their loan deductions are such that some have to be plotted at the back of their payroll, making them describe their lives as “loan-loan kasakit,” a Visayan wordplay for pure misery.

What leads government workers to over-indebtedness? Bad economy, for sure, is one. But I’m more inclined to believe that this culture of debt is something promoted and abetted by a bureaucracy that is in itself debt-ridden.

Let me explain. Because the government cannot afford a decent wage increase, it does what it thinks is the next best thing---offer a slew of loan opportunities that civil servants in dire straits could not resist! The loan windows alone of Pag-IBIG and GSIS, if availed of simultaneously, are enough to put any worker in the red due to humongous amortizations.

Multiple availment has become the name of the game. Before, only GSIS offered salary loans to government employees, but now government financing institutions (GFIs) like Land Bank, PNB, Quedancor, and Small Business Corporation, not to mention enterprise banks (EBs), have followed suit! Just recently, the GSIS offered yet another P5,000-worth of emergency loan assistance to members who have become e-card holders.

The government of late has changed the rules on loan renewal from one year to six months. This mires the worker in deeper debt as he restructures his loan in shorter cycles and thus pays a new interest without enjoying rebates from the previous loan’s pre-paid interest.

For the government to argue that people at work are not compelled to access these loan facilities is to disregard the Pinoy culture of taking advantage of every (loan) opportunity that comes their way. And so just because the facility is there and everybody is accessing it, people also avail it even if they have no project in mind. Inevitably the proceeds go to the purchase of non-essentials like a new cell phone.

The government seems to realize the adverse effects of this compulsive loaning disorder because it now imposes a debt cap by having the Commission on Audit require all government workers to maintain a monthly minimum take home pay of P3,000.00. But trust these wage earners to subvert this COA policy by colluding with co-employees from the accounting department to window dress the payroll by not declaring some of their deductions. Given this, the certification by the disbursing officer on the borrower’s net take home pay required by GFIs and EBs is actually not worth the paper it’s printed on.

As with any vicious cycle, we’ll never see the end of this. And because I subscribe to the thesis that generally man works basically for money, I refuse to think of the impact that all this wreaks on bureaucratic efficiency and productivity.

Research says that over-indebtedness affects many aspects of life, and the anxiety it brings contributes to conditions such as heart attacks, insomnia, uncontrolled emotion and difficulty completing daily tasks. As debt spirals, other priorities like medical care fall by the wayside because people who lack the money to pay their regular bills are often reluctant to seek medical attention that they require. This leads to medical conditions that worsen over time, which could easily be overcome with early treatment.

Debt can be devastating, so we people at work should take the necessary steps towards debt-free living. We should identify how and why we got into debt overload. We should start by knowing where our money is leaking out, then prioritize our debts and settle them. Because regardless of what they say, debt elimination is still the best investment. Then and only then will payday feel like payday.