Our social security law 60 years after

It is but only a month from now on June 18, and the Social Security System shows no intention of commemorating that day 60 years ago when President Ramon Magsaysay signed into law Republic Act 1161 or the Social Security Law of 1954 —“An Act To Create A Social Security System Providing Sickness, Unemployment Retirement, Disability And Death Benefits For Employees.”

In fact, the picture of Magsaysay signing the law is displayed prominently in almost all SSS photo exhibits, which is similar to that of President Franklin Roosevelt signing the US Social Security Act on August 14, 1935, the 75th anniversary of which the Americans observed in 2010.

Manuel Hizon, the Actuary of the Government Service Insurance System then, was immediately appointed SSS acting administrator after the signing of R.A. 1161. The governing board Social Security Commission was also constituted shortly on July 6 with Secretary of Health Paulino Garcia as chairman, and included the Secretary of Labor, Social Welfare Administrator and GSIS General Manager as members. Immediately, the SSC set the start of the law’s implementation to December 1 that same year.

But SSS took more than three years to implement its program in full, choosing to declare September 1, 1957 as its official first day of program implementation.

Why?

Magsaysay’s enthusiasm to have a social security law passed by Congress was beyond question. Sworn into office as the seventh Philippine president on December 30, 1953, he succeeded in having Congress quickly pass the social security law in less than six months.

In fact, Presidents Manuel Quezon, Sergio Osmeña, Manuel Roxas and Elpidio Quirino during their administration all tried to, but failed in having a social security law passed for lack of supportive legislators who were steadfast enough to face the strong lobby of employers against its passage.

Quezon succeeded, however, in approving a law on November 14, 1936 that created the Government Service Insurance System. Twenty years later, GSIS would serve the needs of SSS by offering its actuaries—Hizon, Emeterio Roa, Sr. and Agustin Mercado – and other technical personnel as the pioneer nucleus employees of SSS.

Magsaysay may have thought that the passage of a law that was consolidated from bills filed earlier would be enough to establish a successful compulsory national social security program.

He underestimated the strength of the opposition to its establishment that came from the American companies and even from the country’s leading mining, lumber and insurance industries. They dominated the country’s economy then and claimed that social security would slow down the country’s industrialization and discourage the inflow of investments into the country. They even criticized the actuarial and technical defects in the drafting of the law.

Thus, the implementation was first postponed from December 1, 1954 to December 1, 1955. But even this date was deferred indefinitely after a big labor delegation trooped to Malacañang to also oppose the scheduled implementation.

By January 1956, President Magsaysay had a more reconciliatory proposal to review R.A. 1161 by consulting continuously all affected sectors. Soon the social security program gained their support but as a compromise, several amendments had to be made to the original law.

But Magsaysay died on March 17, 1957 in a tragic plane crash. President Carlos Garcia, his successor, also supported social security law and pursued his initiatives.

By June 21, 1957 he successfully signed into law R.A. 1792 which amended R.A. 1161. It removed unemployment benefits, changed the contribution rate from 3 percent of salary for each worker and employer to 2-1/2 percent for worker and 3-1/2 for employer, and provided representations to workers and employers in the Social Security Commission.

SSS finally opened to the public on September 1 that year, thenceforth seldom mentioning that this was because of R.A. 1792. Magsaysay would have been 50 years old the day before on August 31.

Magsaysay tried to give us a good social security program in 1954 through R.A. 1161.

But workers and employers -for fear that it would adversely affect their business or weaken their existing company pension benefits – caused the delay in the original law’s implementation and eventually watered down his original pension and unemployment benefits.

Sixty years after the enactment of R.A. 1161, they still fear SSS initiatives and continue to be the stumbling block in improving its program. Even the last miniscule increase in contribution rate by 0.6 percent of salary was first strongly opposed by them. The part of salary that they allowed to be covered by the program at P16,000 is only about one and a half times the mandated minimum wage.

Can the SSS be blamed for granting meaningless benefits? How else can we describe its average pension of P2,977, which is less than the P466 daily minimum wage for seven days?

After sixty years, it is time to improve the SSS pension program. Adopting what they have in other countries may be inappropriate but simply adopting for SSS the pension system of our government employees is justified.

Then we can grant the same minimum pension of P5,000 for SSS and GSIS pensioners. –Horace Templo, Manila Standard Today