The Department of Education (DepEd) has issued a renewed reminder to its personnel not to use or surrender their ATM payroll cards as collateral for loans, highlighting the financial and security risks associated with the practice commonly known as “Sangla-ATM.”
The reminder was issued through DepEd Memorandum No. 049, s. 2026, dated August 12, 2026, and comes as a reiteration of the Department’s earlier policy against using payroll ATM cards to secure loans. The latest memorandum directs DepEd personnel to exercise caution when entering into loan agreements and to avoid informal or unauthorized lending arrangements.
For teachers, school heads, non-teaching personnel, and other DepEd employees who may be looking for additional financial assistance, the memorandum is an important reminder: having a legitimate loan is different from surrendering control of the bank account where a salary is deposited.
What Is DepEd Memorandum No. 049, s. 2026?
DepEd Memorandum No. 049, s. 2026 is titled “Reiteration of the Reminder to Refrain from Using ATM Payroll Cards as Loan Collateral.”
The memorandum reiterates an earlier Office Memorandum, OM-OSEC-2020-006, dated April 18, 2020, which reminded DepEd personnel not to use their ATM payroll cards as collateral for loans or participate in ATM “Sangla” arrangements.
The latest issuance also references the Bangko Sentral ng Pilipinas (BSP) advisory on the Sangla-ATM scheme issued in May 2023. DepEd describes the practice as a high-risk and potentially abusive lending arrangement because of the risks involving unauthorized withdrawals, financial exploitation, excessive indebtedness, and misuse of personal and sensitive information.
The Department has therefore made clear that the latest memorandum is a reiteration of an existing reminder, rather than an entirely new prohibition introduced for the first time in 2026.
What Is a Sangla-ATM Loan?
“Sangla-ATM” generally refers to a lending arrangement in which a borrower gives a lender possession or control of an ATM card as security for a loan.
In some arrangements, the borrower may also be asked to provide the card’s personal identification number, or PIN. This can give the lender access to the account where the borrower’s salary or other funds are deposited.
The BSP previously warned that such arrangements can make it difficult for cardholders to monitor withdrawals. The central bank also cautioned that creditors could potentially withdraw amounts exceeding what the borrower owes.
For a DepEd employee, the risks can be particularly serious when the account connected to the ATM card is also the account used to receive regular payroll.
Why Is DepEd Warning Teachers and Employees About Sangla-ATM?
DepEd's latest memorandum identifies several concerns associated with the practice.
First is the possibility of uncontrolled withdrawals. If another person has possession of an ATM card and the information needed to access the account, the employee may have less control over funds deposited into that account.
Second is the risk of financial exploitation. Informal lending arrangements may involve high interest rates, unfavorable terms, or other conditions that can make repayment increasingly difficult.
Third is excessive indebtedness. A quick loan may appear attractive when an employee needs money immediately, but expensive repayment conditions can create additional financial pressure.
Finally, DepEd emphasized the importance of protecting personal and sensitive information. Giving another party access to banking credentials can create security and privacy risks.
These concerns are consistent with the BSP's earlier warning that borrowers who surrender ATM cards and PINs can have difficulty monitoring transactions and may become vulnerable to unauthorized withdrawals.
Does the DepEd Memo Mean Teachers Cannot Take Loans?
No.
This is an important distinction.
DepEd's memorandum does not prohibit its personnel from obtaining legitimate loans. Instead, it reiterates the warning against using or surrendering ATM payroll cards as loan collateral.
DepEd personnel may still use legitimate loan programs and authorized lending facilities, provided they meet the applicable requirements and conditions.
The latest memorandum specifically encourages personnel to use accredited, authorized, and regulated lending facilities. These include government loan programs offered by the Government Service Insurance System (GSIS), DepEd Provident Fund, Land Bank of the Philippines, and Pag-IBIG Fund, as well as SEC-registered and duly licensed lending companies and other DepEd-accredited private lending institutions.
This means employees should not interpret the latest reminder as a ban on borrowing money. Rather, it is a warning to choose safer and properly regulated lending arrangements.
What Should DepEd Personnel Check Before Getting a Loan?
Teachers and other DepEd employees should carefully review any loan offer before signing an agreement.
One of the first warning signs is a requirement to surrender an ATM payroll card to the lender.
Employees should also be cautious if a lender asks for their ATM PIN or other banking credentials.
Before accepting a loan, borrowers should check the lender's identity, registration or accreditation, interest rate, repayment schedule, penalties, fees, and other conditions.
A loan advertised as being specifically for “teachers,” “government employees,” or “DepEd personnel” should not automatically be assumed to be an official DepEd loan.
Employees should verify information through appropriate official channels instead of relying solely on social media advertisements, agents, personal referrals, or informal lenders.
What Does the Earlier 2020 DepEd Policy Say?
The latest memorandum builds on DepEd's 2020 reminder.
In OM-OSEC-2020-006, DepEd reminded employees to refrain from using ATM payroll cards as collateral for loans or engaging in ATM Sangla arrangements. The earlier guidance also noted concerns regarding identity theft, unauthorized use of personal information, and over-indebtedness.
The 2020 memorandum further stated that surrendering ATM cards as collateral for loans was prohibited under the terms and conditions for entities accredited under DepEd's Automatic Payroll Deduction System.
The 2026 memorandum therefore reinforces a policy that has been in place for several years.
What Does the 2026 Reminder Mean for Teachers?
For teachers and other DepEd personnel, the practical message is straightforward:
Do not surrender your payroll ATM card to a lender as collateral for a loan.
If financial assistance is needed, employees should explore legitimate and regulated options instead.
The safest approach is to understand the complete loan agreement before signing it, verify the lender, compare repayment terms, and protect the banking credentials connected to the account where salary payments are received.
Employees should also remember that a loan with an easy application process is not necessarily the safest loan.
Does the Memorandum Apply to All Government Employees?
DepEd Memorandum No. 049, s. 2026 specifically addresses DepEd personnel.
The broader Sangla-ATM practice, however, is not limited to teachers. Similar arrangements can affect other government employees and private-sector workers.
The BSP has previously advised the general public to avoid Sangla-ATM arrangements because of the risks associated with surrendering ATM cards and PINs. The central bank has also encouraged borrowers to understand their loan agreements and inquire directly with banks and other supervised financial institutions about available loan facilities.
Therefore, employees outside DepEd should check the rules and policies applicable to their own employer, agency, bank, or financial regulator.
Bottom Line: DepEd's ATM Payroll Card Warning in 2026
As of August 13, 2026, DepEd's position is clear: its personnel are being reminded not to use or surrender their ATM payroll cards as collateral for loans.
The latest reminder comes through DepEd Memorandum No. 049, s. 2026, issued on August 12, 2026. The Department considers Sangla-ATM a high-risk lending practice that can expose personnel to unauthorized withdrawals, financial exploitation, excessive debt, and misuse of sensitive personal information.
The memorandum does not mean that teachers and other DepEd employees are prohibited from borrowing money. Legitimate and regulated loan facilities remain available.
The key difference is how the loan is obtained and what the lender requires from the borrower.
For DepEd personnel, protecting the payroll account should be a priority. Before accepting any loan, employees should verify the lender, carefully read the terms, understand the total cost of borrowing, and avoid arrangements that require them to surrender their ATM card or banking credentials.
When a financial emergency arises, a fast loan may seem like the easiest solution. But protecting long-term financial security is just as important as getting immediate access to cash.