15/08/2026
9.66% LANG BA TALAGA ANG COST NG 6–7 YEAR LOAN NG DEPED?
A Financial Literacy Check by DemoAlam
Kapag sinabi sa borrower na ang contractual interest rate ay 9.66% per annum, madaling isipin na iyon na ang kabuuang cost ng loan.
Pero may importanteng distinction:
> CONTRACTUAL INTEREST RATE ≠ EFFECTIVE COST OF BORROWING
Kaya sinubukan naming i-audit mathematically ang computation samples sa Annex D-1 hanggang D-7 ng latest DepEd issuance.
What did we find?
For the 1- to 5-year samples, the amortization and disclosed interest-rate computations are generally consistent, subject to normal rounding.
Pero may significant discrepancy sa Annex D-6 (6 years) at D-7 (7 years).
6-YEAR SAMPLE
The Annex shows:
Contractual Rate: 9.660%
Term: 72 months
Monthly payment: ₱1,835.49
Disclosed EIR: 11.805%
Pero kapag sinuri ang actual cash flows for the complete 72-month term, the EIR is approximately:
12.632%
Interestingly, 12.632% is also the EIR stated in the main body of the DepEd Order.
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7-YEAR SAMPLE
The Annex shows:
Contractual Rate: 9.660%
Term: 84 months
Monthly payment: ₱1,642.61
Disclosed EIR: 7.303%
Pero kapag isinama ang buong 84 monthly payments, the cash-flow-derived EIR is approximately:
12.310%
Again, this corresponds to the 12.310% EIR stated in the main body.
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WHERE DID THE DISCREPANCY COME FROM?
This is the most interesting part of our mathematical audit.
For the 6-year sample, the Annex's "Total" figures correspond to the cumulative figures only through Month 70, even though the loan has 72 months.
For the 7-year sample, the same thing happens:
The "Total" figures correspond to Month 70, even though the loan has 84 months.
That affects the reported:
Total interest
Nominal interest rate
Effective Interest Rate
So the issue appears to be in the summary/EIR calculation, not in the basic 9.66% declining-balance amortization itself.
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WHY SHOULD BORROWERS CARE?
Because 9.66% is a contractual rate.
A borrower should also understand:
How much will I actually receive?
How much will I pay every month?
How much will I pay in total?
How much of that is interest?
How long will the deduction remain on my payslip?
What is the effective cost when upfront charges and actual cash flows are considered?
And most importantly:
> A lower monthly amortization does not automatically mean a cheaper loan.
A 7-year term may reduce the monthly payment, but it also extends the repayment period and can increase the total contractual interest paid.
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THIS IS THE KIND OF FINANCIAL LITERACY WE WANT TO PROMOTE.
Don't look at the 9.66% alone.
Look at the REAL PESO FIGURES behind the loan.
Before signing a 6- or 7-year loan, ask:
"How much money will I actually receive?"
"How much will I actually repay?"
"When will my deduction finally end?"
"What is the effective cost of this loan?"
And:
"What happens to my financial position if I renew again before this loan matures?"
Financial literacy is not telling you whether you should borrow.
Financial literacy is giving you enough information to understand what you are actually signing.
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DemoAlam | Practical Financial Literacy
This post is for educational and financial-literacy purposes. The calculations discussed above are based on mathematical analysis of the figures presented in the referenced DepEd issuance and should not be interpreted as legal advice or an accusation of intent. Borrowers should review their actual loan disclosure, contract, charges, and repayment schedule before making a borrowing decision.
