SSS Premiums Employers Buck Hike In Contributions

The Employers Confederation of the Philippines (ECOP) distanced itself from pronouncements made by the Social Security System (SSS) that employers are "amenable" to the planned increase in members' contribution to 11 percent.

ECOP President Edgardo G. Lacson stated that although SSS has reportedly conducted "consultations with various company executives," ECOP was not among those consulted on the proposal to adjust members' contribution from 10.4% to 11% by the end of the year and "by 15 percent in the long term to make them at par with those in other countries."

Lacson, however, recalled having met SSS last year to vigorously express ECOP's opposition to increase members' contribution. "We expressed strong reservations on any increase in contributions given the volatile economic situation, the capacity of employers and employees to absorb the increases, and its overall impact on the economy and viability of businesses. It radically increases indirect labor costs," Lacson emphasized.

Lacson noted that prior to said meeting, "We objectively wrote a letter to them (SSS) opposing any adjustment in premium contributions at the cost of employers and workers."

ECOP, together with other business organizations such as the Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation, Inc. (Philexport), Philippine Food Processors and Exporters Organizations, People Management Association of the Philippines (PMAP), Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. (FFCCCII), Makati Business Club (MBC), Philippine Constructors Association (PCA), Business Processing Association of the Philippines (BPAP), Philippine Association of Colleges and Universities (PACU), Philippine Association of Local Service Contractors (PALSCON), Philippine Franchise Association (PFA), Philippine Retailers Association (PRA), Semiconductor Electronics Industries in the Philippines (SEIPI), Philippine Plastics Industry Association (PPIA), reiterate its opposition to such proposal of SSS. The business groups are up in arms over the plan of SSS to adjust contributions as this will terribly hurt, cost-wise, both employers and workers, without any concrete and measurable returns.

PCCI President and ECOP Chairman Miguel B. Varela said given the recent two-step P30 cost-of-living allowance (COLA) approved in the National Capital Region (NCR) - which ECOP continues to oppose with the impending filing of a partial motion for reconsideration before the National Wages and Productivity Commission (NWPC) - increasing contributions at this time would be a "double whammy" for business.

"There is no basis for the increase nor is there an immediate necessity for the same. If the goal is to gradually increase the actuarial life of the SSS Fund, it can be done without increasing the premiums being paid by both the employer and the employee," Varela argued.

Varela said the SSS may strengthen its viability through other means such as prudent spending, maximizing yield on in investments or increasing the number of new members especially on voluntary-y contributions. "Let us think of other ways to enhance the benefits for members. Let us not pass the burden to the employers and the employees", he stressed.

Philexport President Sergio Ortiz-Luis, Jr. said, "Employers were never amenable to the plan as what SSS claimed," expressing apprehension that such move might trigger increase in contributions from other government agencies such as Pag-IBIG and Philhealth. "Agreeing to the plan of SSS might send the wrong signal to these other agencies that employers are willing and capable to absorb the increases in contribution, which is not the case," he added.

Ortiz-Luis related that based on year 2007 estimates from the SSS itself, the life of the Reserve Fund is expected to last until 2039. "If the goal is to gradually increase the life span of the Fund, it can be done without increasing the premiums being paid by both the employer and employee," he argued.(BCM)