Velasco's proposal seals Congress push to defer premium hikes
MANILA, Philippines — Legislators are upping the ante on Social Security System (SSS) to stop charging heftier premiums come January 15 to its members supposedly as a form of reprieve to pandemic-battered workers.
On Thursday, no less than House Speaker Lord Allan Velasco put forward his own proposal to fight the impending SSS contribution hike to 13% of monthly salaries from 12%, the bulk of which will be shouldered by employers.
A suggested permanent fix, Velasco is looking to restore the president’s power to call off a programmed rate hike at the SSS “in times of national emergencies when public interest requires.” The same will apply to the Philippine Health Insurance Corp. (PhilHealth) under Velasco’s House Bills 8316 and 8317.
Currently, the president had already delegated the power to tinker with contributions to respective boards of the SSS and PhilHealth through separate laws which the Duterte administration itself put forward in 2018 and 2019 to strengthen the Philippines’ health and pension systems. Velasco’s proposals ultimately give the chief executive back some of those powers.
“We are witnesses to the negative impact of this COVID-19 outbreak. Under this pretext, the sovereign government must be given the prerogative to bend the rules of the social security law in favor of the greater good,” Velasco said in a statement.
Growing calls
Velasco’s bills only add to the growing number of measures pending in both houses of legislature that seeks to stop premium increases, which employers and workers alike fully support. On Tuesday, Marikina Rep. Stella Quimbo filed a similar bill that seeks to give the president the power to suspend PhilHealth premium hikes “when public interest so requires.”
Quimbo was also among at least 54 lawmakers who authored a joint resolution moving for the deferment of this year’s PhilHealth rate hike.
In the same day, CIBAC party-list representatives Eduardo Villanueva and Domingo Rivera turned their attention to halting the SSS contribution increase in their bills. The leftist Makabayan bloc, meanwhile, went a step further and proposes a halt to all scheduled SSS premium increases that under the law will run until 2025.
For now, there is little chance for the bills to pass to prevent the charging of a bigger SSS contribution on the first payroll on January 15. However, the bills do put pressure on the pension fund, and its chair, Finance Secretary Carlos Dominguez III, to voluntarily postpone the adjustment. That remains to be seen however, as the pension fund said it is still drafting a response on the latest developments in Congress.
As it is though, Dominguez has stood pat on the increase mandated no less than by Republic Act 11199 or the Social Security Act of 2018 which legislators themselves enacted. The finance chief has not responded to repeated request for comments as of this posting.
With rising pressure from Congress however, all eyes would be on President Rodrigo Duterte now, especially after similar calls to defer PhilHealth’s increase in premiums forced the health insurer to suspend the hike until Congress passes a new law that would override the Universal Healthcare Act that mandates yearly adjustments.
Potential losses
While indeed not pushing through with heftier premiums give consumers bigger take-home pay, delays in larger premiums however threatens the longevity of pension funds heavily reliant on contributions to fund current and future needs. PhilHealth had earlier said it would lose P13 billion from the deferral, while SSS said the agency stands to lose a bigger P43 billion if additional premiums are not imposed.
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.
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