MANILA (UPDATE) - The Social Security System on Friday said the hike in its contribution rate is necessary to keep the pension fund afloat even as some sectors opposed it. 

The state-run social insurance and pension fund began implementing the 15 percent contribution rate for its members at the start of the year. This was up from the 14 percent rate last year.

Carlo Villacorta, SSS Head for Public Affairs and Special Events Division, said the higher rate is part of Republic Act 11199 or the Social Security Act of 2018. It mandates the SSS to increase its contribution rate every two years with the final increase in 2025.

In 2019, the contribution rate was set at 12 percent, in 2021 it rose to 13 percent and increased to 14 percent in 2023. The rate will be shared by the employer and the employee. For the 15 percent contribution rate this year, 10 percent will be shouldered by the employer, while the employee pays the remaining 5 percent.

“We are just fulfilling the last tranche of what is prescribed in the law. We started in 2019 with these increases,” said Villacorta.

For example, Villacorta said, a person earning P10,000 monthly, will now be paying a P1,500 SSS contribution, shared with the employer, from the previous P1,400. The amount goes up for those with higher salaries.

The minimum Monthly Salary Credit (MSC) has also been increased to P5,000, while the maximum MSC is now set at P35,000. Villacorta said this will have an impact on the benefits members may avail.

“Sa pag-adjust ng monthly salary credit pataas, tama tumaas ng bahagya ang kontribusyon, pero tataas rin ng bahagya o malaki ang ating benepisyo,” he said.

The Employers’ Confederation of the Philippines said while they oppose the hike, it is already expected since the law was signed many years ago.

“While we are all against, both employers and labor, are against increases, especially this time, we did not protest against that anymore. Because it looks like ok naman ang services ng SSS. But we expect that dapat mag stabilize ang SSS,” said ECOP President Sergio Ortiz-Luis Jr.

Several groups have criticized the move of SSS. Gabriela Party List Representative Arlene Brosas said the government must instead increase the salary, rather than the contribution. She is calling for the suspension of the hike.

“This is the government’s buena mano for 2025 - another round of burden for our workers. Sa halip na dagdag sahod, dagdag kaltas ang ibinigay sa mga manggagawa,” Brosas said.

"This is essentially squeezing dry our already overburdened workers," she added.

But SSS said it urgently needs to raise contributions to extend the fund’s life.

“Without this, the fund of SSS will only last up to 2032 with the additional pension benefit of P1,000 given to all pensioners starting 2017. The schedule of contribution rate increases or MSC monthly salary credit, now the fund life has been extended to 2053,” said Villacorta.

He added that they cannot suspend the increase as it is also included in the law. The higher contribution rate remains in effect and SSS hopes the 15% will be the last and long-term contribution rate of the agency.

House Assistant Majority Leader and TINGOG Party List Representative Jude Acidre, also said calls for the suspension of the SSS contribution hike should be studied carefully, taking into consideration the state pension’s fund life.

“It was a product of a legislation signed by former President Duterte. I'm sure it will have serious implications, especially with the actuarial health of SSS. Kasi nga tinaasan na rin yata ‘yung benefits and pension. So, kailangan lang pagtugmain ‘yun, at kailangan natin aralin nang mabuti kung ano ang magiging mas tama at akmang hakbang," he explained.

"Kasi hindi pwedeng arbitrary i-suspend natin, pero ‘yung benepisyong ikinommit na before is nai-implement na. So those are the things that we need to carefully consider,” Acidre said.

The SSS saw higher revenues in 2023 after it raised contributions that year.

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