The Social Security Commission (SSC) said that the scheduled increase next year in the monthly contribution of members of the Social Security System (SSS) will ensure the long-term viability of this pension fund and increase the benefits to be enjoyed by them and their beneficiaries.  

It said the full implementation by 2025 of the restructured rates and other reforms set in Republic Act (RA) No. 11199 or the Social Security Act (SSA) of 2018 will offset the financial impact to the Fund of the P1,000 increase in the monthly pension of all member-pensioners that was implemented in 2017.  

This was stressed by Finance Secretary and SSC Chairman Carlos Dominguez as the SSS is set to hike beginning in January 2021 its monthly contribution rate by one percentage point to 13 percent from the current 12 percent of their respective salaries, but not to exceed the prescribed maximum monthly salary credit (MSC).

He expressed the hope that SSS members would see their higher monthly contributions as their savings and safety net against the future hazards of sickness, maternity, disability, unemployment, old age, death, and other contingencies resulting to loss of income or financial burden for them and their beneficiaries.  

Dominguez pointed out that the restructuring of the SSS contribution rate, along with the minimum and maximum MSCs and the other provisions of RA No. 11199, will “ensure the long-term viability of the SSS Fund, expand its coverage and provide more and higher benefits for its current and future members and their beneficiaries.”  

The MSC is the determining factor for contributions and benefits, which is based on the member’s monthly earnings.  

“Upon full implementation in 2025, the reforms under the SSA of 2018 will offset the adverse financial impact of the P1,000 pension increase granted in 2017,” Dominguez said in a statement.  

Through the SSA of 2018, the SSS last year introduced the Unemployment Benefit for members involuntarily separated from their jobs, and extended the MSC cap for the computation of benefits to P20,000.  


The upgrade in the MSC cap, meanwhile,  increased the amount of benefits that members and/or their beneficiaries are entitled to receive, such as sickness, maternity, unemployment, retirement, disability, death, and funeral.  

“Any drop in collections may lead to cash flow and liquidity issues. This could endanger the SSS’ ability to provide its members and their beneficiaries with benefits and loan privileges,” Dominguez said.  

However, he assured the public that “the SSS’ investments are well-managed and has allowed the pension fund to respond to the needs of members despite the drop in collections during the pandemic.”

From January to October 2020, the SSS disbursed a total of P159.47 billion in social security and employees’ compensation benefits to 3.56 million members and beneficiaries, representing a decrease of 2.6 and 4.8 percent, respectively, from the benefits released in the same period last year.

This decline is a result of the COVID-19 pandemic, which affected the number of benefit disbursements from late March to May.  

However, benefit disbursements to SSS members and their beneficiaries started to slowly recover or increase in the following months with the easing of quarantine restrictions and continuous digitization of the SSS system.

SSS member loan releases from January to November 2020 totaled P58.03 billion for 3.20 million members, a respective increase of 54.5 percent (P20.48 billion) and 76.7 percent (1.39 million members) from the same period last year.  

Pension loan releases from January to November 2020 reached P3.17 billion combined for 69,813 retiree-pensioners, an increase of 61 percent (P1.20 billion) and 11.5 percent (7,210 pensioners), respectively, from the same period last year.  

With many workers being unemployed as a result of the no-work-no-pay policy or the reduced working arrangements arising from the COVID-19 pandemic, SSS contribution collections from January to October 2020 totaled only P169.73 billion, or a decrease of 5.4 percent from the P179.34 billion collected in the same period last year.

For employed members, land-based OFW members in countries with Bilateral Labor Agreements with the Philippines, and sea-based OFW members, the additional one percent will be divided equally between them and their employers, bringing the contribution rate breakdown to 8.5 percent for their employers and 4.5 percent for them.  


The minimum MSC will be raised to P3,000 from P2,000 (except for Kasambahay and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively), while the maximum MSC will be at P25,000 from P20,000.  

The SSS will also open a Worker’s Investment and Savings Program (WISP) for the portion of member contributions in excess of the P20,000 MSC up to the prescribed maximum MSC of P25,000.  

For example, under the P25,000 MSC, a member who will be paying the new monthly contribution of 13 percent rate will actually shell out P3,250, of which P2,600 will go to the Regular Social Security Fund (RSSF) and the remaining P650 to the WISP.  

The WISP will mean additional pension income to members contributing under it.

The SSS’ total portfolio was designed to be ready for certain liquidity challenges such as the current decline in collections resulting from COVID-19 or the higher demand for calamity loans from natural disasters.  
In the third quarter, for instance, the SSS accessed its investments in government securities for the higher liquidity needs to fund calamity loans of its members.  

SSS calamity loans accounted for 52.3 percent of the total amount of member loan releases from January to November 2020.  

“The SSS expects to further improve its financial performance and have better collections in the years ahead as the economy recovers from the coronavirus pandemic and regains its pre-COVID growth momentum,” Dominguez said. ###