Budget chief presses hike in SSS contributions | Inquirer News

Budget chief presses hike in SSS contributions

By: - Reporter / @bendeveraINQ
/ 07:25 AM October 09, 2017
Benjamin Diokno

Benjamin Diokno

An increase in contribution rate is needed to extend the fund life of the Social Security System (SSS) following the pension increase approved by President Duterte early this year, according to Budget Secretary Benjamin Diokno.

But a party-list group has slammed the SSS plan to increase the contribution rate of members to over 12.5 percent of the monthly salary credit, saying there are several ways to cope with the recent pension increase without passing the burden on to the employees.


In a joint statement on Sunday, Bayan Muna Rep. Carlos Isagani Zarate and former Rep. Neri Colmenares maintained that the SSS should improve its collection efficiency and collect billions in unremitted contributions by delinquent employers, as well as the fines imposed by the courts on them.

Asked if the agency could opt to not jack up the contribution rate even as President Rodrigo Duterte had given his go-ahead to do so, Diokno told reporters over the weekend that the pension fund for workers in the private sector “has to think in behalf of the membership.”


Long-term fund viability

Without an increase in contributions, the SSS “will jeopardize the long-term viability of the fund,” the budget chief said, as the pension hike would reduce its fund life by 10 years.

“So you cannot be a populist … The populist stand there is, it will be a problem of the future generation,” he said.

The SSS president, Emmanuel Dooc, has said the Social Security Commission would approve the increase in the contribution rate to over 12.5 percent to coincide with the implementation in January next year of the first package of the tax reform program that would reduce personal income tax rates.

In January, Mr. Duterte approved a two-stage monthly pension increase of P2,000, of which P1,000 a month has been been disbursed to each pensioner since March.

The President also ordered that the SSS members’ contribution rate be adjusted upward in increments of 1.5 percentage points per year until 2020 when it will have reached 17 percent from the current 11 percent.

The SSS was unable to implement the contribution rate increase in May, as initially scheduled, as it had to wait for the passage of the first tax reform package, which would increase the take-home pay of workers.

But the SSS chair, Amado D. Valdez, said last week that the agency was still studying the possible implementation and effects of a monthly contribution rate increase.


“The contribution increase is our last option,” Valdez said.

Should an increase be needed to extend the fund life of the SSS, “the contribution rate increase will be at the minimum amount only,” he added.

Selling properties

Valdez noted that members’ contributions during the first half climbed 9.6 percent year on year to P78.6 billion, while investment income jumped 12.3 percent to P18.4 billion.

He said the SSS was looking at various income-generating schemes. The SSS will also sell over P3.45 billion in real estate property starting this year until 2022 to augment its revenues.

But for Diokno, selling properties will not be enough. “When you sell properties, it’s a one-time [gain] … It doesn’t follow that if you have cash, the SSS becomes richer. Selling properties is not the solution.”

Latest data showed the net revenue of the SSS slid 60 percent year-on-year to P6.561 billion in the first half mainly due to the pension increase.

Colmenares said that “instead of harping on increased contributions,” the SSS should cut down the bonuses and perks given to its board members and recover the disallowed P200-million retirement package given to the board members in 2009. —WITH A REPORT FROM VINCE F. NONATO

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Benjamin Diokno, Carlos Isagani Zarate, Emmanuel Dooc, Neri Colmenares, Rodrigo Duterte, Social Security System, SSS contributions
For feedback, complaints, or inquiries, contact us.

News that matters

© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.