Philippines: SSS hikes contributions by 1%, effective January 2025
Additional revenue seen extending fund life to 2053, under RA 11199
Manila: The Social Security System (SSS) will implement a 1 per cent contribution rate increase starting January 2025, the agency announced recently.
This brings the total rate to 15 per cent as mandated by Republic Act (RA) No. 11199, the Social Security Act of 2018.
The hike comes with adjusted Monthly Salary Credits (MSC): the minimum rising to Php5,000 from Php4,000, and the maximum increasing to Php35,000 from Php30,000.
Final tranche
This final tranche of increases is designed to ensure the fund’s longevity, extending its viability from 2032 to 2053, according to the SSS chief.
“The scheduled contribution rate and MSC increases are among the most important reforms under RA 11199 that aim to ensure the long-term viability of the SSS," SSS President and Chief Executive Officer Robert Joseph M. De Claro said.
"With this last tranche of contribution rate and MSC increases, the SSS fund is projected to last until 2053 – doubling the fund life to 28 years (vs 2032 or 14 years when an actuarial valuation study was performed in 2018).”
This will allow the agency to fulfill its social security obligations to current and future members during times of contingencies, he added.
Php51.5 billion fund bump
The hike is expected to generate Php51.5 billion in 2025, with 35 per cent or Php18.3 billion allocated directly to members' Mandatory Provident Fund (MPF) accounts.
Calamity loans
Additionally, De Claro highlighted SSS's critical role in aiding calamity-stricken members, with Php9.7 billion in calamity loans disbursed to over 500,000 members in 2024.
Looking ahead to 2025, SSS prioritises service enhancements through new programmes and aims to boost investment income amid a positive economic outlook. “Our ultimate goal is to make SSS a vital part of every Filipino’s life, ensuring financial security for all,” De Claro said.
State-run social insurance
The SSS is a state-run social insurance scheme designed to provide financial protection to private-sector workers and other qualified individuals in the Philippines during contingencies, such as sickness, maternity, disability, retirement, death, and unemployment.
What is the Monthly Salary Credit (MSC)?
The MSC is a system used by the Philippine Social Security System (SSS) to determine the amount of contributions a member needs to pay and the corresponding benefits they are entitled to receive.
Starting January 2025, the SSS will adjust the MSC values:
Minimum MSC: Raised to Php5,000 from the previous Php4,000.
Maximum MSC: Increased to Php35,000 from the prior Php30,000.
Impact of the Adjustment:
Higher Contributions: With a higher MSC, members and their employers (for employed individuals) will contribute more to SSS.
Greater Benefits: The adjusted MSC ensures that benefits like sickness, maternity, retirement, and disability will also increase, as these are calculated based on the MSC.
Provident Fund Allocation: A portion of the additional contributions will go directly into the Mandatory Provident Fund (MPF), boosting individual savings accounts for retirement.
This adjustment reflects SSS's efforts to strengthen the sustainability of its fund while providing members with improved benefits.
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