MANILA – (2ND UPDATE) President Rodrigo Duterte has approved a pension increase for Social Security System (SSS) members, which will be funded with an increase in contributions, officials said Tuesday.
Starting May 2017, the contribution rate will be increased by 1.5 percent to 12.5 percent, bringing the contribution range to P15 from P740, Presidential Spokesman Ernesto Abella said.
Duterte is “not amenable” to funding the increase with taxpayers’ money and the SSS should source it from contributions and investments, Abella said.
Half of the P2,000 increase will be given as early as this month, while the remainder will be paid out by 2022 or earlier, said SSS Chairman Amado Valdez.
However, a “slight delay” to around February is possible as the SSS “recomputes” its finances, fund president Emmanuel Dooc said.
“This is an obligation under the law. Actually, it’s not just an obligation under the law. It’s a moral obligation because you are building social protection,” Valdez said.
“I’m calling the attention of employers to really pay the contributions para yung delivery ng tinatawag na increase of benefits ay mabibigay namin sa kanila (so we can deliver the increase in benefits),” he added.
Dooc admitted that SSS collections were “weak” but refused to give an estimate. Fund officials said measures would be put in place to ensure that contributions are remitted on time and in full.
“You will see in the following days cases to be filed against erring employers. There will be some contempt charges against employers who do not respond to the summons of the court because the fund is social protection,” Valdez said.
Duterte's economic managers had warned against an increase that is funded with taxpayers' money, saying it would shorten the life of the fund and endanger the country's sovereign debt ratings.
Duterte promised to increase SSS pensions when he campaigned for the presidency last year. His predecessor, Benigno "Noynoy" Aquino III, vetoed a legislated adjustment saying it would endanger the funds finances.