The Social Security System (SSS) on Thursday warned that suspending the increase in the SSS contribution will result in P41.37 billion loss in the agency’s income.
During a hearing of the House Committee on Government Enterprises and Privatization, SSS President and CEO Aurora C. Ignacio opposed the approval of pending bills deferring the implementation in the hike of member-contribution as authorized under Republic Act No. 11199 otherwise known as the Social Security Act of 2018.
“At the outset, however, we would like to state that the provisions of the bills tend to weaken, rather than strengthen the SSS, especially in these difficult times,” Ignacio said in her statement before the panel.
Ignacio added that the SSS is against the move in view of its adverse impact on the financial health of the SSS, and eventually, on the benefits of pensioners, members and their beneficiaries.
“As the Honorable Committee may know, the SSS has implemented various Bayanihan measures as its institutional response to the Covid-19 emergency. These included the extension on contribution payment deadline, advance pension, Covid-19 calamity loan, unemployment insurance benefit and moratorium on loan payments. These have posed considerable strain on our liquidity, with the financial outflows outpacing the inflows,” according to Ignacio.
She added that postponing or stopping the implementation of the increase in member contribution will further exacerbate the SSS already dire financial position.
Ignacio said that aside from a projected loss of P41.37 billion in 2021, at least P14.9 billion projected deficit is expected this year once the premium hike will be stopped.
“We submit that the additional peso contributions are relatively small, ranging from P15 to P100 for employed members, from P30 to P200 for self-employed and voluntary members and from P80 to P200 for OFW members,” she explained.
“Pre-determined contribution schedule is a long overdue reform which will serve to offset the financial impact of improved and expanded benefits that the SSS has provided since 2017. Apart from the emergency Covid pandemic responses, these are the additional P1,000 monthly benefit allowance, expanded maternity benefit and unemployment insurance benefit, with no corresponding additional funding,” Ignacio said.
Ignacio maintained that the scheduled increase in contributions would be equivalent to around P41 billion of benefits and loans to 3.3 million beneficiaries.
“This amount should continue to enable the SSS to grant even more benefits and loans for the greater good of the SSS membership, both present and future,” she noted.
“At this time of the CoViD-19 pandemic, when members and pensioners have clamored for heightened benefits, including allowable loans, we would expect that proposed measures should clearly strengthen the SSS, not weaken it financially. Stopping the collection of this considerable amount would clearly weaken our institution established to provide social protection,” Ignacio added.