DBM urges hike in SSS contributions

MANILA, Philippines — Following the implementation of the tax reform law, the Department of Budget and Management (DBM) is urging the Social Security System (SSS) to raise its members’ contributions to strengthen the financial condition of the state pension fund.

In an interview, Budget Secretary Benjamin Diokno said “this is the best time” for the state-run SSS to hike the rate of its members’ contributions as Filipinos are now enjoying higher take-home pays after the implementation of the Tax Reform for Acceleration and Inclusion Act (TRAIN).

“This is the best time to raise it because the take-home pay of (employees have increased)...because of the TRAIN,” Diokno told reporters on the sidelines of the First Global Forum On Infrastructure Strategies in Pasay City.

Republic Act 10963 or the TRAIN Law aims to simplify the country’s tax system and adjust the personal income taxes of Filipinos.

Under the law, taxpayers with an annual taxable income of P250,000 and below are exempted from the personal income tax.

The budget chief maintained there is a need to hike the contributions of the SSS to preserve the fund’s viability amid the growing disbursement of benefits from the state pension fund.

Earlier, Diokno warned the non-adjustment of SSS members’ contribution may jeopardize the viability of the state pension fund with rising expenditures brought about by the increasing number of pensioners and the increase in their benefits.

President Duterte in January last year approved the P1,000 increase in  benefits of SSS pensioners. The increase was retroactively implemented in March.

According to the SSS, the move has shortened the actuarial life of the SSS fund to 2032 from 2042.

To preserve the viability of the fund, Duterte also approved a corresponding 1.5 percentage contribution rate hike originally scheduled in May 2017 and an increase in monthly salary credit to P20,000 from P16,000.