MANILA, Philippines—The state-run pension fund Social Security System (SSS) this month will offer four condonation programs, penalty-free, to employers who were unable to remit contributions and members who failed to pay loans amid the harder times wrought by the COVID-19 pandemic.
SSS president and chief executive Aurora Cruz-Ignacio told a press briefing on Thursday (Nov. 4) that the social security (SS) contribution penalty condonation program will allow qualified employers to pay overdue SS contributions, covering period March 2020 to present, in full or installments within a period of four to 24 months, depending on how much deficiency they owed.
Called “PRRP 2,” the SS contribution condonation program will allow penalty-free payments, during a six-month period starting this November, Ignacio said.
The other condonation program for employers was dubbed enhanced installment payment or “PRRP 3,” which Ignacio said will also start this month and allow employers with deficient SS and employees’ compensation (EC) contributions to pay in installments spanning between nine and 60 months, depending on the delinquency amount.
SSS senior vice president Mario Sibucao said the SSS computed up to P55 billion in delinquencies or unpaid SS and EC contributions from over 700,000 employers who can avail themselves of these condonation programs. Sibucao said the penalties to be condoned by the SSS would reach 20 percent of these total deficiencies.
For members, Ignacio said the SSS will offer two programs. The housing loan restructuring and penalty condonation program will condone all unpaid penalties upon full payment.
“Qualified SSS housing loan borrowers, successors in interest, and legal heirs may pay the outstanding principal, interest, insurance dues, and legal expenses of their SSS housing loans in full within 90 calendar days from their receipt of the notice of approval of application or pay 50 percent within 90 days [upon approval] and pay the remaining 50 percent in 12 equal monthly installments,” Ignacio said.
Called “PRRP 4,” the housing loan condonation program will start accepting applications on Nov. 22 this year until Feb. 21, 2022.
SSS vice president Pedro Baoy said SSS targets 2,000 housing loan borrowers. The P2 billion targeted to be condoned from these loans will exceed the P350 million in principal, he said.
The SSS will also offer to its members the so-called “PRRP 5” or the short-term member loan penalty condonation program.
Under PRRP 5, “all due and demandable arrears composed of the outstanding principal and interest of a member-borrower’s past-due salary, calamity, and/or emergency loans as well as loans under the salary loan early renewal program and restructured loans under the loan restructuring program will be consolidated,” Ignacio said.
PRRP 5, which will be offered from Nov. 15 this year until Feb. 14 next year, will condone unpaid penalties upon full payment of a member’s consolidated loans.
Baoy said about seven million borrowers with P59 billion in unpaid loans may avail themselves of PRRP 5, which will condone up to P60 billion.
Ignacio urged employers and members to avail of these condonation programs to “regain their good standing.”
The four condonation programs would also shore up the SSS’s revenues from contributions, which as of end-August were being outpaced by the bigger expenses.
SSS executive vice president Rizaldy Capulong said the pension fund collected P155.6 billion in contributions from January to August, while expenditures were a bigger P159.6 billion, composed of P154 billion disbursed as benefits to members and pensioners plus P5.6 billion in operating expenses.
Capulong nonetheless assured that the P22.2 billion in investment income as of end-September would plug the shortfall in contribution collections against expenses.
The SSS’s end-September investment income included P9.8 billion from government securities, P5.9 billion from salary loans, P4.1 billion from equities, P1.1 billion in interest income, and P940 million from real properties, Capulong said.
The SSS’s fund life was estimated to last until 2054, based on actuarial valuation done in 2019, pre-pandemic, Capulong said. “Hopefully the impact of the pandemic will not be long-lasting” to keep the pension fund sustainable, he said.
Despite the prolonged pandemic which shed millions of jobs and shuttered thousands of businesses, the SSS had pushed through with the scheduled increase in members’ monthly contribution rate to 13 percent this year from 12 percent previously to prolong the fund’s life.
TSB