Updated: July 28, 2020
What is AFPSLAI? How does it work? Is it good to invest in it? Is my money safe in AFPSLAI?
Those are the questions that we will try to answer today as I know a good number of people are actually interested to know them.
A friend of mine, who works at the PNP, recently told me that he had put money into AFPSLAI, which then inspired me to write this post.
Anyway, for those who don’t know, AFPSLAI stands for Armed Forces and Police Savings & Loan Association, Inc.
It is a private, non-stock and non-profit savings and loan association established and registered with the Securities and Exchange Commission since 1972. It is supervised by the Bangko Sentral ng Pilipinas and one of the leading providers of financial products and allied services to the AFP, Army, Air Force, Navy, PNP, BFP and BJMP.
What exactly is AFPSLAI?
In simple terms, it is a savings and loan “corporation”. It is NOT a bank, but operates LIKE a bank. And not everyone can open an account with them, or in more exact terms, become a member of the association.
Regular Membership is limited to:
- Military Officers
- Military Enlisted
- AFP/PNP Retiree/Pensioner
- AFP/PNP Pensioners (Widow/Widower/Orphan)
- Inactive/Reserved Officer
- PNP Officer/Non-Officer
- Civilian Employees (AFPSLAI-accredited institutions)
- Resigned from Service/Honorably Discharged (for AFP/PNP military/police only)
- BFP/BJMP Officer/Non-Officer.
Meanwhile, Associate Membership is open to:
- Legitimate spouse of regular married member
- Legitimate children of the regular married member (21 years old and above)
- Philippine Veterans Administration Office (PVAO) pensioners
- PNPA/PMA/PAF Cadet
- Candidate Officers (OCS and NOCC)
So if you don’t qualify to any of those, then AFPSLAI is not for you. However, if you are, or if you know someone who is qualified, then better read on.
How does AFPSLAI work?
The easiest way to understand how AFPSLAI operate is to compare it to a bank. Currently, they have twenty-one (21) offices and fifty (50) extension offices around the country. Their “main branch” or head office is located at EDSA cor Bonny Serrano Rd., Camp Aguinaldo, Quezon City.
As a member of AFPSLAI, you have access to their loan products which can help you with your financial needs. They offer salary loans, personal loans, housing loans, auto loans and even business loans to name a few. The interest rates, in my opinion, are actually very competitive.
More importantly, members of AFPSLAI can avail of their deposit products. Particularly, the Capital Contribution Account (CCA) which is a high-dividend earning “savings” account; the Pension Account for pensioner remittances, and the simple Savings Deposit Account, which gives a tax-free 3% per annum interest (better than any commercial bank I know).
AFPSLAI also has other products and services such as ALMS, which is similar to life insurance; AMD, an automated investment service; APEX, for remittance of pensions; and SMS, a text-message service. They also offer college scholarships.
AFPSLAI as an Investment
Members of AFPSLAI are very lucky because they have access to one of the best investment products I’ve seen, the Capital Contribution Account (CCA), which according to reports for the past 10 years, have produced an incredible, average tax-free dividend of at least 18% per year. That’s as good as the stock market!
CCA regulations limit a member’s contribution to only P30,000 per quarter. However, one can be exempt from the P30,000 per quarter limit if the member enrolls in the Automatic Monthly Deduction (AMD) service.
Moreover, there is a maximum total contribution of P3M for Regular Members and only P1M for Associate Members. So if your contribution reaches that limit, you can no longer place money in CCA.
So assuming you have P3M placed in CCA, that’s P45,000 per month dividend for you – not bad, right? If I am qualified to be a member, I’d definitely place some of my money here.
UPDATE: Figures above are from 2013, the year this article was written. As of 2017, the dividend has been reduced to 16%, which is still high. The limit has also been reduced to P15,000 per quarter. And Associate Members can no longer make a contribution.
Is it safe to put money in AFPSLAI?
I took time to read their 2012 Annual Report and found their finances to be stable.
Personally, the biggest risk with AFPSLAI is poor investment decisions and mismanagement. The last reported news related to this happened in 2006, where they lost money in their investments with Centennial Savings Bank and Centennial Financing Corp. (Source) But I think AFPSLAI has already recovered from that loss and members have not been severely affected by it during that time.
Short to say, I believe your money is safe in AFPSLAI.
I have good faith with them and believe that it is stable and currently managed by competent people. But for risk-averse individuals, I’d advise not to put all your money in there.
So there you have it, a primer on the Armed Forces and Police Savings & Loan Association, Inc. or AFPSLAI. To learn more about them, you can visit their website at www.afpslai.com.ph.
If you are a member of AFPSLAI, or know somebody who is, then I hope you can give below as a comment your experience with them. Thank you.