New law lets Duterte hold SSS contribution hikes

by Christina Mendez (The Philippine Star), 29 May 2021

MANILA, Philippines — The bill granting the President the power to hold off Social Security System (SSS) contribution hikes during the coronavirus pandemic has been signed into law.

By signing Republic Act 11548, President Duterte now holds the power to suspend for the duration of the health crisis the one-percent increase in contribution rates for 2021 and the monthly salary credits provided under the law.

SSS contributions were supposed to increase from 12 percent to 13 percent of a member’s monthly salary starting Jan. 1, 2021.

But in March 2020, Duterte through Proclamation No. 929 placed the entire country under a state of calamity due to the pandemic. Through another proclamation, he extended its duration to Sept. 12, 2021.

Sen. Joel Villanueva hailed Duterte’s signing into law of the bill he authored and thanked the President, who he said now has the “power to pull the trigger” and afford private sector workers some relief.

“The law the President recently signed gives him power to press the ‘pause’ button on the scheduled increase,” said Villanueva. “The fate of the law is now in his hands. It will not automatically take effect. It is up to the President to exercise that prerogative.”

The chair of the Senate labor and employment committee believes that Duterte would invoke that provision of the new law and order a freeze.

“Otherwise, he would have vetoed it. There is no point in affixing your signature on a law you do not intend to implement,” Villanueva said.

He said doing so would not hurt the financial viability of the state-run pension fund for private workers “as it is temporary, not permanent.”

“The suspension is not a forgiveness but a freeze, for the time being and not forever. It will not cover the entire monthly contribution but only the increase that is supposed to take effect this year,” Villanueva explained.

The law also provided that kasambahays who are receiving a monthly income lower than the monthly salary credit prescribed under the Act shall pay contributions based on their actual monthly salary.

Meanwhile, the rate of penalty on unpaid loan amortizations shall be determined and fined by the Commission from time to time through rules and regulations on the basis of applicable actuarial studies, rate of benefits inflation and other relevant socioeconomic data.