To: Regional Directors
Assistant Regional Directors
Schools Division/City Superintendents
District Supervisors
Heads, Public Elementary and Secondary Schools

1. The program to review and re-accredit private lending institutions has been concluded and the Department is formalizing or has formalized the memoranda of agreement with those PLIs who will be allowed to use the Automatic Payroll Deduction system, either at the Central Office or through regional payroll services. The revamp of the system includes the following notes for all administrators to observe and abide by.
2. The Office of the Secretary, through the Undersecretary (Finance & Administration), shall be the only office that can assign lending codes, whether this is for national or regional lending purposes. No region shall be allowed to assign separate codes. Application must be made to the Central Office only.
3. Private lending institutions allowed to use the system are limited to organizations that are regulated by the following regulators:
   1. Bangko Sentral ng Pilipinas (banks and banking institutions)
   2. Insurance Commission (insurance companies)
   3. Cooperatives Development Authority (cooperatives)
   4. Securities and Exchange Commission (other non-stock, non-profit organizations with mandates to lend)
   5. No lending investors or sole proprietorships will be allowed in the system.
4. Private lending institutions shall only be allowed to lend to teachers in regions where they have offices. Any inclusion of loans incurred outside of the regions identified in their MOAs will not be entertained under the APDS.
5. An agent who is not an employee of the lending institution or member of the teacher cooperative/association is not considered an “office”. Any DepEd administrator, principal or teacher who serves as an agent for a private lending institution shall be deemed to have a conflict of interest and can be administratively charged or suspended for such.
6. The private lending institutions that will be allowed to use the APDS have agreed to charge no more than 18% interest per annum (1.5% per month or 9.75 -10.25% deducted up front) and no more than 6% of the principal borrowed as service fees and other charges. Any private lending institution found to be charging higher than these rates will be in violation of the MOA and can have their lending codes revoked.
7. The APDS limits service charges on collections to: 0.5% for non-stock non-profit organizations including teacher cooperatives and associations, and 1.0% for commercial lenders. This is based on a Monetary Board circular (No. 153) issued in January 30, 2003 limiting service fees charged to non-stock, non-profit savings and loans associations to 0.5%.
8. Attached is a list of the re-accredited private lending institutions and the regions where they can operate and use the DepEd APDS. Included in the list are their rates of interest and service fees. The list will continue to be updated on a regular basis. A region- by-region list will be provided for posting in all schools.
9. The Department has worked hard to clean up the system. We ask for the full cooperation of all DepEd administrators to ensure that the system remains transparent, accountable and well-governed.
10. For information and strict compliance.

Reference.
None
Allotment: 1—(D.O. 50-97)

To be indicated in the Perpetual Index under the following subjects:
EMPLOYEES
POLICY
SALARY