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Metro Manila (CNN Philippines, January 26) — A Senate body on Tuesday passed a bill that would allow the deferment of higher monthly contributions to the Social Security System, deeming it a priority measure amid the COVID-19 pandemic.
The Senate Committee on Government Corporations and Public Enterprises said it will consolidate three bills that either outrightly orders a postponement in charging the 13% contribution rate among employed members, or allows the Philippine president to make the decision.
The measures are slated to be taken up at the plenary this afternoon, according to the office of panel chairman Senator Richard Gordon. He added that he’s inclined to leave the decision to the President, similar to the bill passed by two House committees last week.
“Given the current employment situation of the country as a result of the COVID-pandemic, there’s a need to ensure that workers and companies are able to fully recover,” bill author Sen. Joel Villanueva said during the committee hearing, adding that millions of Filipinos have lost their jobs.
The Employers Confederation of the Philippines also supported the deferment, saying the higher contributions would be an added burden to businesses, particularly small- and medium-sized firms. Business owners shoulder a portion of their workers’ monthly contributions.
The SSS insisted that the higher premiums translate to “relatively small” additional salary deductions, ranging from ₱15 to ₱100 for the employed, and ₱30 to ₱200 for self-employed and voluntary members, as well as overseas Filipino workers.
If the deferment is approved, employed SSS members will have the same deductions from last year, not the higher 13% rate scheduled for 2021.
SSS President Aurora Ignacio said while the relief is short term, permanent damage could be done to the pension fund.
“Currently, the long-term solvency of SSS is already threatened with trillions of unfunded liability,” she told lawmakers. “In simple terms, there is insufficient fund to enable us to support payments for the next generation of pensioners.”
Ignacio said the SSS has no funds to support an estimated ₱9.46 trillion worth of member benefits and pension payments in the next 30-40 years if the scheduled rate increase is postponed.
The SSS has enough funds until the year 2054. Without additional contributions, the agency said last week that it will not be able to collect ₱15 billion.
“If we have the choice, our original position is not to defer. The shorter the deferment, it would be better if (it’s just) three months,” the SSS chief added, noting that Filipinos without work will not be forced to contribute until they get new jobs.
Gordon’s bill allows the President to suspend the implementation of contribution hikes by up to six months, which can be extended for another six months if there’s a state of national emergency or calamity.
SSS monthly premiums will increase yearly until 2025, according to Republic Act No. 11199 or the Social Security Act of 2018.
