SSS wants to increase members' contributions

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Metro Manila (CNN Philippines, October 3) — Thirty-five million members of the Social Security System may start the new year shelling out more.

The SSS is hoping to implement by January, at the latest, its proposal for a 1.5 percent increase in monthly contributions, from the existing 11 percent to 12.5 percent.

The higher contribution was supposed to have taken effect in May, alongside the P1,000 increase in pension, but this was excluded from President Rodrigo Duterte's executive order approving the pension hike. Since May, the SSS has been paying out P2-billion a month to cover the increase in pensions for 218,000 retired members.

The proposal could translate to P15 to P300 monthly increase in premium, depending on the contributor's salary.

This could be implemented through a new executive order or if amendments to the SSS Charter are approved. The proposed amendments to Republic Act 1161 or the Social Security Act have been approved by the House of Representatives, which include giving the SSS the authority to set the minimum and maximum monthly salary credits, schedule and rate of contribution, condone penalties  without the need for prior approval of the Philippine President.

The Senate Committee on Government Corporations and Public Enterprises tackles the measure this week.

SSS Chairman Amado Valdez stresses the need to immediately implement the increase in contributions to stabilize and prolong the life of the pension fund, "We want  na 50 years or 75 years ang life of the pension fund. It's (approval) something na pinagaaralan nila. Maari siguro next year. I hope it's earlier."

Officials say had it been implemented in May, the SSS could have collected P23 billion more this year.

Socioeconomic Planning secretary Ernesto Pernia admits that while the increase in contributions may burden employees and employers,  the effect could be tempered once the administration's tax reform measures are  approved  by January.  He says that with lower income taxes, Filipinos should still get a higher take-home pay.

"There will be some impact but I think a lot of them are capable. They have the willingness and ability to pay anyway. If they know what the benefits are then they should be motivated to comply, " says Pernia.

CNN Philippines' Claire Jiao contributed to this story.