DepEd warns personnel against Sangla-ATM loan schemes, cites high risks

CEBU CITY, Philippines — The Department of Education (DepEd) has reminded its personnel not to surrender or use their ATM payroll cards as collateral for loans, citing risks of financial abuse and unauthorized access to their salaries.

In DepEd Memorandum No. 49, s. 2026 issued Wednesday, August 12, the agency said the practice, commonly known as “Sangla-ATM,” could expose employees to uncontrolled withdrawals, excessive debt, misuse of personal information, and other forms of financial exploitation.

Warning against Sangla-ATM

Sangla-ATM is a high-risk informal lending practice in which borrowers hand over their ATM cards and personal identification numbers (PINs) to lenders in exchange for cash.

Lenders then use the cards to withdraw the borrowers’ salary or pension payments when these are credited, typically until the loan and its high interest charges are fully settled.

DepEd personnel were urged to avoid informal or unauthorized lenders that charge excessive interest or impose unfair, oppressive, or otherwise unfavorable loan conditions.

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“All DepEd personnel are strongly advised to exercise utmost prudence and diligence when entering into loan agreements,” part of the memorandum read.

The department also reminded its personnel to protect their ATM payroll accounts, as well as their personal and sensitive personal information, from unauthorized access or misuse.

READ: Beware of ‘sangla-ATM’ schemes, warns BSP

Use authorized loan facilities

Instead of informal lending arrangements, DepEd encouraged employees to obtain loans only from accredited, authorized, and regulated providers that comply with existing government rules and DepEd policies.

These include loan programs offered by the Government Service Insurance System, DepEd Provident Fund, Land Bank of the Philippines, and Pag-Ibig Fund.

Employees may also seek financing from lending companies registered with the Securities and Exchange Commission and duly licensed, as well as other private lending institutions accredited by DepEd.

According to the department, these authorized facilities are expected to provide clearer terms and more accountable lending arrangements for borrowers.

The latest memorandum reiterates the prohibition under Office Memorandum (OM)-OSEC-2020-006 dated April 18, 2020, which warned personnel against using ATM payroll cards as loan collateral or participating in ATM Sangla arrangements.

DepEd also cited the Bangko Sentral ng Pilipinas advisory on the “Sangla-ATM” scheme issued on May 20, 2023, in reinforcing the prohibition.

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