AFPSLAI cuts interest rates to spur lending

MANILA, Philippines - The Armed Forces and Police Savings and Loan Association, Inc.(AFPSLAI) has slashed interest rates for salary and pension loans across all terms to provide more affordable loan packages to members. In a press release, AFPSLAI Tuesday said the following interest rates now apply: * 9% (from 13%) for one-year loans; * 11% (from 13.3%) for two-year loans; * 12% (from 13.6%) for three-year loans; * 12.25% (from 13.9%) for four-year loans; and * 12.5% (from 14.2%) for five-year loans. The last cut in interest rates, which involved a one-percentage point reduction across all terms, was in July 2007. "The rate reduction on salary and pension loans was approved to make loans more affordable for members," Rowena Fontillas, AFPSLAI marketing analyst said in a telephone interview Tuesday. She explained that the financial institution pays huge dividends to its depositors but only a few members avail of the loan packages. "We just want to balance the number of loans and the depositors," she added. The AFPSLAI is a non-stock savings and loan institution that provides financial assistance to active and retired member-partners from the Armed Forces of the Philippines, Philippine National Police, Bureau of Jail Management and Penology, Bureau of Fire Protection, their civilian personnel and dependents, and employees of the Department of National Defense. Members who wish to avail of the new rates may file their applications while those with existing loans may qualify for loan renewal of higher amount with the same or even lower monthly amortization. — Louella D. Desiderio, BusinessWorld