Separate Senate committees on Tuesday approved proposed measures which seek to suspend the Social Security System contribution hike, but it was unclear if the approvals included provisions for the President to suspend the increase or it will be made through legislation.
The Committee on Government Corporations and Public Enterprises and the Committee on Labor, Employment and Human Resources Development, in a joint hearing, tackled 3 bills on the postponement of increasing monthly contributions of the SSS to 13% of the salaries of members from the current 12% to be implemented this month and giving the Philippine President the power to do so.
Senator Richard Gordon, chairman of the Senate committee on government corporations, said the President should still be given authority to make a decision on the matter.
Under one of the Senate bills being deliberated, the President will be allowed to defer the contribution hike during times of national emergency or calamity for a period not exceeding six months.
"If the President is the one who is going to make the suspension or deferment, you have more leeway because that's the executive doing their job. But if the Senate says suspended right away, talagang medyo kakalog ang SSS. That's just my personal opinion," Gordon said.
Since they are giving respect to the SSS, Gordon said they can lobby the President and make an appeal.
“Of course, you wanted it suspended because you won’t pay, but there’s also a need to preserve- those to be inherited by the public. We need to preserve what the public will get from SSS when they retire, when they die or when they lose their job,” also said Gordon.
In the same hearing, Sen. Joel Villanueva said the scheduled increase in SSS contribution should be deferred given how the COVID-19 pandemic caused job losses and company closures.
Villanueva said he filed Senate Bill No. 1965 “to provide a reprieve for 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 pointed out that the deferment is needed considering that people would only be able to pay their SSS contributions if they have jobs or a source of livelihood.
SSS President president and chief executive officer Aurora Ignacio objected to the postponement, saying “it will tend to imperil probably on a permanent or a temporary basis the sustained benefits of the members and the benefits that’s supposed to go to the members.
She disclosed that at present, the long-term solvency of SSS is already threatened with trillions of unfunded liability. In simple terms, she noted that there is insufficient funds to enable SSS to support payment for the next generation of pensioners.
Furthermore, she said the new SSS contribution hike was a “long overdue reform” since the agency has increased its pension benefits 25 times while it has only so far adjusted its contribution rate only eight times.
Ignacio also told the Senate committees that the deferment of the contribution increase be shortened to three months.
To this, Gordon said it would be up to the President to decide on how long the postponement will be. “It’s a very flexible six months,” he said.
Jose Kato, director of the legal and legislative cluster of the Joint Manning Group, Inc. proposed that different sectors also be allowed consultation with the President.
“I think that it’s common consensus that we’ll give a free hand to the President, would it also be possible—since the SSS will also have the chance to lobby its own interest—can the different sectors directly give an opinion directly to the President in as much as perhaps there are sectors that are hurting more than the others,” Kato said.
“Because we are talking of a blanket suspension or a blanket non-suspension, maybe, perhaps, to be fair also, some sectors should be consulted separately depending on their situation,” he added.
Gordon responded, saying the committee could add to the proposal that the decision on whether to defer the contribution hike would be “upon consultation with the SSS and the other sectors of the economy who may be affected. Some more severely and some less.”
Meanwhile, Gordon, as chairman of the Senate Committee on Government Corporations and Public Enterprises, proposed a bill granting the President of the Republic the power to defer the increases in contributions of the Social Security System (SSS) in times of declared national emergency or state of calamity.
The President should be given the authority during times of national emergencies such as this pandemic to defer the payment of increased rates by the members of the SSS," said Gordon.
He noted the public has no money to pay the increase due to the pandemic.
“My position, therefore, would be to make the SSS law nimbler and leave the deferment of contribution increase for the President to decide, provided that there is a consultation with the SSS and affected stakeholders, he said.
The bill amending Section 4(a)(9) of R.A. No. 11199 or the Social Security Act of 2018 states that deferment of the rise in contributions shall only be in effect for a limited period of six months, which may be extended for another six months.
“We want to look into giving our people financial breathing space to be able to adjust to the on-going national emergency, while we also take into consideration SSS’ financial viability. ".
He also pointed out that while deferring the increase in contributions is the fastest way to respond to the problem, the SSS can lobby and appeal to the President anytime.