News Column

No-Collateral Loans for TESDA Graduates Sought

February 6, 2014

PASAY CITY, Philippines, Feb. 6 -- The Philippines House of Representatives (16th Congress) issued the following news release:

A lady-lawmaker laments that many graduates of courses offered by the Technical Education and Skills Development Authority (TESDA) and other learning institutions find it difficult to secure employment.

This is the main reason why Rep. Evelina G. Escudero (1st District, Sorsogon) filed HB 3738 which calls for no-collateral, low-interest loans to said graduates.

"The inability to raise funds to cover the cost of processing applications hinders many of said young graduates to secure employment in foreign countries," Escudero said.

The measure, Escudero said, proposes a special loan for graduates of TESDA and other educational institutions duly accredited by the Commission on Higher Education with approved overseas jobs contracts.

Under HB 3738, each loan shall be payable within a period not exceeding five (5) years and shall be in an amount not to exceed P100,000 at the option of the graduate concerned.

She added that said loan program shall be consistent with safe and sound banking practices as provided under Republic Act 8791, otherwise known as "The General Banking Law of 2000."

The bill mandates all government and private banking and financial institutions to make the necessary provisions for extending said no-collateral, low-interest loans.

"The loans extended under the proposed law shall be used exclusively for meeting the credit needs of such graduates with approved overseas job contracts," Escudero added.

The bill provides that the Director-General of TESDA or the chairperson of CHED, whichever the case may be, be directed to enter into the necessary Memoranda of Agreement with the appropriate government and private banking and financial institutions to provide for the terms and conditions under which the loans shall be extended to beneficiaries.

The Monetary Board shall prescribe the interest rate on the loans which shall also be based on the lowest rate of interest for similar credit accommodations prevailing at the time of effectivity of the proposed Act.

All government and private banking and financial institution which shall extend the loans specified under HB 3738 shall also be granted development assistance incentives provided by the Bangko Sentral ng Pilipinas under Section 46 of R.A. 8791.

HB 3738 has been referred to the House Committee on Overseas Workers Affairs chaired by Akbayan Partylist Rep. Walden Bello for appropriate action.

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Source: Targeted News Service

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