Pres. Duterte OKs PHP1,000 SSS pension hike, contribution increase

President Rodrigo Duterte (Pictured) has approved a pension hike for Social Security System (SSS) members along with a corresponding increase in contributions, Palace and SSS officials said Tuesday. (Photo: Presidential Communications (Government of the Philippines)/ Facebook)

MANILA –President Rodrigo Duterte has approved a pension hike for Social Security System (SSS) members along with a corresponding increase in contributions, Palace and SSS officials said Tuesday.

In a press briefing in Malacañang, Presidential Spokesperson Ernesto Abella said the President has approved a PHP1,000 increase for SSS pensioners starting this month.Duterte also approved a 1.5 percent increase in SSS contributions to be implemented starting May 2017 and an increase in monthly salary credit to PHP20,000 from PHP16,000.

“The contribution increase would raise the contribution rate to 12.5 percent from the current 11 percent, bringing the contribution range from PHP15 to PHP740,” Abella said.

The Palace official said that President Duterte approved the measures as he seeks to fulfill a social contract with the Filipino people, especially the elderly and the poor who gave the best years of their lives in service, “while exercising fiscal responsibility to sustain the economic sustainability and protect the gains made by those who have prudently invested in the nation’s future.”

“As the President has emphasized, he is the President of an entire nation and not just a particular social class. In this regard, the funds covering the increase will be through current contributions and investment reserved fund,” he said.

“The President is not amenable to using taxpayers’ money to fund pension increase since the SSS is a private pension fund,” Abella said.

But even with the thousand peso increase, Abella said the Fund life will continue until 2040 by May 2017 when the contribution rate and increase in monthly salary credit is implemented.

In the meantime, SSS chairman Amado Valdez said that while only PHP1,000 pension hike was approved for this month, half of the PHP2,000 package being asked would be given by 2022 at the latest.

He also clarified that the 1.5 percent hike in contributions would be on a yearly basis until the contribution rate reaches the threshold of 17 percent which was the rate approved by the country’s economic managers.

Valdez said that the 17 percent rate contribution could also be lessened once internal reforms are successful.

“Depending on the results of the internal reforms that are being presently instituted, we can give the remaining PHP1,000 as early as 2018 and we could also stop the 1.5 percent yearly contribution hike below the threshold,” he said.

Among the reforms being instituted to ensure sustainability of the Fund include legal action plans to reduce contribution delinquency and Executive interventions needed to improve collections through the issuance of an Executive Order.

The legal action plans include the intensified legal collection on referred delinquent and non-compliant employers; aggressive prosecution, settlement facilitation and speedy disposition of cases; close coordination with the Department of Justice and the creation of additional branch legal departments among others.

“You will see in the following days cases to be filed against erring employers. There will be some contempt charges against employers who do not respond to the summons of the court because the Fund is a social protection,” he said.

“This (SSS contribution remittance) is an obligation under the law. Actually, it’s not just an obligation under the law; it is a moral obligation because you are building social protection,” Valdez said.

Meanwhile, SSS president Emmanuel Dooc clarified that pensioners will have to wait until at least February to receive the increase.

“A slight delay is expected as we only learned of the approved hike Monday night and there will be some re-computations,” he said.

He said that they are also appealing to President Duterte to issue an EO that will mandate all business entities doing business with the government to produce an SSS clearance before a contract would be awarded to them.

An SSS clearance should also be required for those who are applying for and renewing a business permit as well as those who would be renewing their Professional Regulatory Commission (PRC) licenses among others.

“This would ensure that businesses and businessmen are regularly remitting the SSS contributions of their employees. This would also ensure the sustainability of the Fund,” Dooc said.