Malacañang Backs SSS Contribution Rate Hike Despite Calls for Suspension
Table of Contents
- 1. Malacañang Backs SSS Contribution Rate Hike Despite Calls for Suspension
- 2. Government Should Not Interfere with SSS Operations
- 3. Political Motivation Suspected
- 4. SSS Contribution Hike Sparks Debate: Suspension or Subsidy?
- 5. Call for Suspension
- 6. SSS Defends Hike, Proposes Option
- 7. Balancing Act: Member Needs and Long-Term Viability
- 8. SSS Chief Urges Collaboration Rather of cancelling Contribution Hike
- 9. Prioritizing Long-term Viability
- 10. Fulfilling Social Security Obligations
- 11. Supporting National Efforts
- 12. How does teh proposed SSS contribution subsidy program aim too mitigate the financial burden on low-income members while ensuring the long-term sustainability of the SSS fund?
Malacañang has given the green light to the Social Security System (SSS) to proceed with its planned contribution rate increase, stating that the decision is based on thorough actuarial studies.
Government Should Not Interfere with SSS Operations
Executive Secretary Lucas Bersamin emphasized the importance of respecting the SSS’s autonomy. During a press conference, he asserted, “Increases like that, they are well-studied based on actuarial considerations. It’s hard to say,’Don’t implement an increase.’ We cannot be that arbitrary. We have to recognize that the SSS has a very respected actuary.They have studies about that.”
Bersamin cautioned against undue government interference, arguing that it could have negative consequences. He expressed his belief that the SSS should be allowed to manage its affairs without external pressures. “If you always meddle in their management in their affairs where they specialize, it may not work.It may even have a negative impact,” he explained.”Why don’t we just let that process continue and let it produce results.”
Political Motivation Suspected
Bersamin also raised the possibility that the calls for suspending the contribution increase were politically motivated. This came after former SSS president Rolando Macasaet, who is currently running for a party-list position in the upcoming midterm elections, was among the first to advocate for a postponement.
The SSS contribution rate hike has been a topic of debate, with some stakeholders arguing that it adds financial burden on members while others emphasizing the need for the agency’s financial sustainability to ensure future benefits for retirees and pensioners.
SSS Contribution Hike Sparks Debate: Suspension or Subsidy?
The impending increase in social Security System (SSS) contributions has sparked a debate, with some calling for its suspension while others favor a subsidy program to cushion the impact on members.
Call for Suspension
Former SSS president Rolly Macasaet, who is currently running for public office, has urged president Ferdinand Marcos Jr. and the SSS to suspend the contribution hike. Chief Justice Alexander Bersamin acknowledged the request, stating, “you must understand where the call is coming from. It’s coming from a candidate. That’s Rolly Macasaet, who used to be the president of SSS.” Bersamin added that the government will seriously consider the request once it is formally submitted.
Several groups and lawmakers have echoed Macasaet’s call, citing concerns about the added financial burden on SSS members.
SSS Defends Hike, Proposes Option
SSS President Robert Joseph de Claro defended the contribution hike, emphasizing that it is not expected to impact the fund’s long-term viability. He stressed that the increase is necessary to meet the immediate needs of SSS members, particularly in providing financial assistance during calamities.
De Claro explained that the additional P51 billion generated from the hike will be channeled towards various services, with a significant portion allocated to calamity loans. In 2023,the SSS disbursed approximately P9.8 billion in loans to those affected by natural disasters.
He highlighted that the contribution increase is mandated by Republic Act 11199, or the Social Security Act of 2018, which outlined a phased increase starting in 2019. This year marks the final stage of the increase, bringing the total contribution rate to 15 percent.
Rather than suspending the hike, de Claro proposed an alternative solution: a contribution subsidy program. He urged lawmakers to consider this option,suggesting that the government could subsidize a portion of the increase to alleviate the financial burden on SSS members. He expressed the SSS’s willingness to collaborate with lawmakers in implementing such a program.
“Instead of suspending the increase,” de Claro proposed, “why don’t we sit down and discuss how we can help our workers by entering into an agreement with SSS on a contribution subsidy program, which is open to all?”
Balancing Act: Member Needs and Long-Term Viability
The debate surrounding the SSS contribution hike highlights the delicate balance between addressing the immediate needs of members and ensuring the long-term sustainability of the fund. While the increase is essential for the SSS to continue fulfilling its mandate, concerns about its impact on members, particularly those facing financial hardships, need to be carefully considered.The proposed subsidy program could offer a potential solution, ensuring that the SSS remains financially sound while providing much-needed support to its members.
SSS Chief Urges Collaboration Rather of cancelling Contribution Hike
In a move to ensure the long-term stability of the Social Security System (SSS), President and CEO Michael G. de Claro has called for partnerships with lawmakers and private individuals instead of pushing for the cancellation of the recent premium hike.
Prioritizing Long-term Viability
De Claro highlighted that the contributor rate increase, which will bring the rate to 15 percent from 14 percent, is crucial for securing the future of the SSS fund. This adjustment, alongside increases in minimum and maximum monthly salary credits, is projected to extend the fund’s lifespan until 2053, effectively doubling its duration to 28 years.
“With this last tranche of contribution rate and MSC increases, the SSS fund is projected to last until 2053 — doubling the fund life to 28 years (versus 2032 or 14 years when an actuarial valuation study was performed in 2018),” de Claro elaborated.
the SSS chief emphasized the importance of this strategic financial move, stating, “This will allow us to fulfill our social security obligations to current and future members during times of contingencies.”
The contribution adjustments are estimated to generate an additional P51.5 billion this year. Notably,P18.3 billion of this sum will directly bolster the Mandatory Provident Fund (MPF) accounts of SSS members.
Supporting National Efforts
De Claro further underscored the broader impact of these changes, explaining, “Such additional collection amount also enables SSS to support the national government in times of difficulty, particularly as regards granting calamity loans.”
By fostering collaborative efforts and ensuring the fund’s long-term sustainability, the SSS aims to provide critical support to Filipinos for generations to come.
How does teh proposed SSS contribution subsidy program aim too mitigate the financial burden on low-income members while ensuring the long-term sustainability of the SSS fund?
Interview with dr. Maria Santos, Economist and social Security Policy Expert, on the SSS contribution Hike Debate
Archyde News: Thank you for joining us today, Dr. Santos. The recent announcement of the SSS contribution rate hike has sparked critically important debate. As an expert in social security policy, what are your thoughts on the increase?
Dr. Maria Santos: thank you for having me. The SSS contribution hike is a complex issue, but it’s crucial to understand that it’s rooted in actuarial studies and long-term financial planning. The SSS is tasked with ensuring the sustainability of the fund, which directly impacts the benefits of millions of Filipinos, especially retirees and pensioners. While the increase may seem burdensome in the short term, it’s a necessary step to secure the system’s future.
Archyde News: Critics argue that the hike adds financial strain to members, particularly during these challenging economic times. How do you respond to that?
Dr. Santos: That’s a valid concern. Many Filipinos are still recovering from the economic impact of the pandemic, and any additional financial burden can feel overwhelming. However, it’s crucial to balance immediate needs with long-term sustainability. The SSS has a responsibility to ensure that the fund remains robust enough to provide benefits for future generations. Without this increase, the fund could face depletion, which would be far more detrimental in the long run.
Archyde News: Some stakeholders, including former SSS president Rolly Macasaet, have called for the suspension of the hike, suggesting it’s politically motivated. What’s your take on this?
Dr. Santos: It’s not uncommon for such calls to arise, especially during election seasons. However, it’s important to separate political rhetoric from policy necessity. The SSS contribution hike is mandated by Republic Act 11199, which was enacted after thorough deliberation. While it’s natural for candidates to advocate for measures that resonate with voters, we must ensure that decisions are based on sound financial principles rather than short-term political gains.
Archyde News: SSS President robert Joseph de Claro has proposed a contribution subsidy program as an alternative to suspending the hike. Do you think this is a viable solution?
Dr. Santos: Absolutely. A subsidy program could be an effective way to mitigate the impact on low-income members while still maintaining the integrity of the SSS fund. By providing targeted financial assistance, the government can help ease the burden on those who are most vulnerable without compromising the system’s sustainability. It’s a balanced approach that addresses both immediate concerns and long-term goals.
archyde news: Executive Secretary Lucas Bersamin emphasized the importance of respecting the SSS’s autonomy. Do you agree with this stance?
Dr. Santos: I do. The SSS operates based on actuarial studies and financial expertise. Excessive government interference could undermine its ability to make sound decisions. While oversight is necessary, it’s equally important to allow the SSS to manage its affairs independently. This ensures that decisions are made in the best interest of the fund and its members, free from political pressures.
Archyde News: what message would you like to convey to SSS members who are concerned about the hike?
Dr. Santos: I understand their concerns,and I want to reassure them that this increase is not arbitrary. It’s a carefully calculated measure to ensure that the SSS can continue to provide benefits for years to come. While it may be challenging in the short term, the long-term benefits far outweigh the costs. I also encourage members to explore the subsidy program if it becomes available, as it could provide much-needed relief.
Archyde News: Thank you, Dr. Santos, for your insights. We appreciate your time and expertise.
Dr. Santos: Thank you. It’s always a pleasure to discuss such important issues.
