Marcos urged to suspend 15% hike in SSS contributions

MANILA, Philippines — Filipinos are set to see an increase in their monthly contribution to the Social Security System (SSS) as the state-run pension fund implements a 15% contribution rate hike starting in January 2025.

This will be the final scheduled increase, according to the Social Security Act of 2018. However, the rate hike can be deferred or rescheduled if President Ferdinand Marcos Jr. chooses to do so.

Civil society groups, former SSS President Rolando Macasaet, and some lawmakers are calling for the suspension of the rate hike.

On January 4, Macasaet urged Malacañang to delay any premium increases, arguing that the SSS' fund life would not be significantly affected.

“The SSS had an income of over P80 billion in 2023 and a banner year of over P100 billion in income for 2024,” he added.

Meanwhile, Senate Minority Leader Aquilino “Koko” Pimentel III said on Monday, January 6, that the “increase in premium contributions does not lead to increases in members’ benefits,” agreeing with calls for immediate suspension. 

“SSS should be fully transparent on the bonuses that they give to their bigwigs. The performance of the board as well as the funds must be audited and assessed, judged by the members themselves,” he said in a statement. 

Former Bayan Muna Rep. Neri Colmenares, who pushed for the increase in SSS pension, also said that the rate hike is “an additional burden” to Filipino workers who have to face price increases in basic goods and services. 

He stressed that the new rates should be suspended, especially when SSS “has not even explained its current collection rate.” 

“It's absolutely unconscionable that SSS implements another premium increase while its pensioners receive a measly P1,200 monthly pension for those with 10 credited years of service, or P2,400 for those with 20 years,” Colmenares said in a statement on Monday.

Labor union group SENTRO described the rate increase to 15% “unjust” and “ill-timed” amid the salaries of Filipino workers that remain stagnant. 

“The government must recognize that workers cannot be made to pay the price for systemic failures. This premium hike will strip families of their hard-earned income at a time when every peso counts,” SENTRO said in a statement on Monday.

What can the president do? Colmenares told Philstar.com in a message that Marcos could issue an executive order or administrative order detailing the reason for a suspension, indicating what kind of calamity the country is facing. 

Republic Act 11548, which was signed in 2021, grants the president the ability to defer increases in SSS contributions during a state of calamity. 

While no suspension has been implemented, how much of a Filipino worker’s salary will be deducted monthly solely for the SSS contribution following the rate hike?

How much will you contribute? The 15% contribution rate will be split between the employer and the employee. The employer will cover 10% of the monthly salary credit, while the employee will contribute the remaining 5%.

For example, if a Filipino earns a monthly salary of P20,749, their corresponding monthly salary credit will be P20,000.

Employees would be paying P1,000 for the Regular Social Security program alone. Meanwhile, the employer would be shouldering P2,000. 

This would be equivalent to a take-home pay of around P19,749, without other contribution payments like PhilHealth and Pag-IBIG. 

Contributions for the Employees’ Compensation Program are also being paid for but not part of the 15%. For the Mandatory Provident Fund, contributions for this are being made only by those earning above P20,250 a month.  

In other words, more than P1,000 is taken from a Filipino who earns a little over P20,000. 

The new schedule of contributions can be found here. 

How were the increases made? The law mandates the SSS to increase the contribution rate by 1% every two years until it reaches 15%. In 2019, the contribution rate was 12%, where 8% was shared by the employer and 4% by the employee.   

Every time the contribution rate increased, both the employer's and employee's shares rose equally by 0.5 percentage points. As a result, in 2021, the employer's contribution rate became 8.5%, while the employee's share increased to 4.5%. 

Rep. Arlene Brosas (Gabriela Women’s Party), one of the first lawmakers to call out the rate hike, called the implementation a “cruel New Year’s gift” for Filipinos.