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After PhilHealth, lawmakers now seek to stop SSS rate hike
This undated image shows a Social Security System office.
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After PhilHealth, lawmakers now seek to stop SSS rate hike

Xave Gregorio (Philstar.com) - January 6, 2021 - 6:21pm

MANILA, Philippines — After succeeding in stopping a hike in contributions in the state health insurer, a handful of lawmakers are setting their sights on doing the same at the Social Security System (SSS).

CIBAC party-list Reps. Eduardo Villanueva and Domingo Rivera filed Tuesday House Bill 8304 that seeks to halt the implementation of the contribution hike in the pension fund for 35 million private sector workers and suspend any further adjustments during a pandemic.

Villanueva’s son, Sen. Joel Villanueva, filed Monday a counterpart measure in the Senate.

“The deferment in SSS rate hike means undiminished level of disposable income for our Filipino workers and employers which will help them cope and survive these hard times,” the older Villanueva said in a statement.

Another proposal from the leftist Makabayan bloc take a step further, with their House Bill 8310, filed Wednesday, seeking to completely stop all scheduled SSS contribution increases. “The Filipino people will be burdened with higher contribution rates even under the current Philippine situation,” the bloc said.

However, the increase in SSS monthly contribution to 13% from 12% is already being enforced, and it remains unclear, given the lengthy and tedious legislative process, whether the bills would get enough support and pass on time to block the current adjustment.

But if PhilHealth’s case is of any indication, the best outcome for the legislators would be to sway the SSS management, led by Finance Secretary Carlos Dominguez III, to postpone the increase. Dominguez did not respond to request for comment on Wednesday, but had insisted over the yearend that the additional premium is needed to keep SSS afloat.

As it is, higher SSS payments were mandated by lawmakers themselves. Under Republic Act 11199 or the Social Security Act of 2018, SSS contributions are scheduled to go up yearly to 15% until 2025, costs to which will be shouldered mostly by employers.

For 2021, contributions of monthly earners of P24,750 and above increased by P200 to P2,600. Previously, maximum earners of P19,750 and above paid only P2,430 a month.

Those who earn over P20,000 would now also contribute to a “mandatory provident fund,” which results in additional deductions between P65 and P650, depending on salary level.

Labor groups and employers have earlier appealed to postpone the additional premium as the unprecedented health crisis crippled the economy and pushed joblessness up to a historic peak of 10.4% last year. That appeal had not been granted. 

Tinkering with the SSS contributions and pensions had been highly political in recent years. In 2017, President Rodrigo Duterte deferred a P1,000 pension hike without a commensurate premium increase over fears the retirement fund would get depleted by as early as 2027. In the twilight years of the Aquino administration in 2015, the government lost political capital after it rejected a bill that would have raised pensions at no additional costs to members.

In 2019, the first year a 1% increment in SSS rates was implemented, audit showed SSS booked a net income of P55.68 billion, more than double the previous year’s P22.58 billion. 

HOUSE OF REPRESENTATIVES SOCIAL SECURITY SYSTEM
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