SSS seeks Senate support to avert rate-hike halt

THE Social Security System sought Senate support Tuesday to avert a suspension of its collection of higher contributions from SSS members, as mandated by law.

Facing a hearing held by the Senate Committee on Government Corporations, SSS President and Chief Executive Officer Aurora Ignacio justified the increased contribution, saying the financial status of SSS was impacted by the pandemic, and suspending the mandated contribution rate hike will further hamper the agency’s efforts to deliver services.

She admitted the agency’s critical financial status is likely to impact on the benefits for the next generation.

In the House of Representatives, meanwhile, lawmakers on Tuesday passed on second reading the bill granting the President the power to suspend the scheduled increases in the Philippine Health Insurance Corporation (Philhealth) premium rates. Labor and some legislators had sought to stop the rate hikes in both SSS and Philhealth, citing the impact of the pandemic on displaced workers.

At the morning’s hearing at the Senate, the SSS chief aired concerns that if the higher contribution is not enforced, the SSS is projected to incur P14.9-billion deficit this year.

Ignacio estimated that about a trillion pesos worth of “unfunded liability” of SSS cannot be paid for lack of available funds. This was because the SSS pension benefits for its members were increased “25 times” but the contribution rate was increased “only eight times,” she explained.

Recalling the SSS had raised by P1,000 the monthly benefit allowance in 2017, Ignacio also cited the expansion of maternity benefits to 105 days since 2019, as well as the grant of unemployment insurance, even as nothing was added in the SSS fund for the extra benefit.

Ignacio further recalled that in accordance with the law, the SSS only increased its members’ contribution from 12 to 13 percent of members’ salary.

Among the pending remedial legislations under consideration are Senate Bill 1996 granting the President of the Philippines the power to suspend the scheduled increases in SSS contribution rates, and Senate Bill 1965 and Senate Bill 1970, deferring the increase in contribution of the SSS.

These were all filed amid a clamor from labor and other groups for a halt in the enforcement of the higher contribution rate this year, given the still-difficult times in which millions of workers languish under the continuing impact of the pandemic and its resulting lockdowns.

This was reiterated by Sen. Joel Villanueva, chairman of the Labor committee, in his opening remarks at the Senate hearing. Villanueva had filed Senate Bill 1965 to “provide a reprieve to our battle-weary workers and employers through the suspension of the

mandated increase in social security contribution rate in the event of a pandemic.”

He cited the October 2020 Labor Force Survey showing the unemployment rate in the country at 8.7 percent, equivalent to around 3.8 million unemployed Filipinos, and much higher than the unemployment rate of 4.6 percent in October 2019.

An SWS survey report in August 2020 highlighted an even “bleaker picture” on the country’s employment crisis, with around 27.3 million Filipinos or 45.5 percent of the labor force losing their jobs during the pandemic, Villanueva said.

“Many companies implemented alternative work arrangements, such as reduction of workdays and forced leaves, just to stay afloat during the pandemic. As a result, many of our workers are forced to receive lower take-home pay and compensation,” he noted.

Philhealth halt

TO provide financial relief amid the pandemic, the House of Representatives on Tuesday passed on second reading the bill granting the President the power to suspend the scheduled increases in the Philhealth premium rates.

House Bill 8461 was principally authored by Speaker Lord Allan Velasco and Marikina Rep. Stella Luz Quimbo.

Under the measure, which amends Section 10 of the Universal Healthcare (UHC) Law, “the President of the Philippines may, in consultation with the Secretary of Finance and the Secretary of Health as chairperson of Philhealth, suspend the implementation of the scheduled increases in premium rates in times of national emergencies when public interest so requires.”

The UHC law mandates increases in member premiums by increments of 0.5 percent every year, starting 2021 until it reaches the 5-percent limit in 2025.

For her part, Quimbo said the Philhealth’s P163-billion reserve fund is sufficient to cushion the impact of the hike deferment.

According to Quimbo, the forgone revenue from the rate suspension is estimated at P433 million in 2021.

Velasco said the approval of the bill is meant to ease the financial burden faced by Filipinos amid the Covid-19 crisis.

“These are extraordinary times, thus the remedy needed to further unburden our countrymen [is] also extraordinary,” he said.