The Social Security System (SSS) is planning to offer relief to borrowers with past-due payments on their salary or housing loans this year in response to the prolonged economic downturn
In a briefing Friday, Rizaldy T. Capulong, SSS executive vice present, said the pension fund is currently working on five “pandemic relief and restructuring programs,” two of which are for delinquent housing and salary loans.
Mr. Capulong said borrowers at least six months behind on their payments are eligible to apply for the programs within a three-month window allotted for applications.
The proposed programs are subject to the approval of the Social Security Commission, headed by Ex-Officio Chairman Carlos G. Dominguez III, the Secretary of Finance. Its Vice Chairman is Aurora C. Ignacio, SSS president and CEO.
Ms. Ignacio first floated a loan condonation program in June.
The SSS offered a scheme in 2019 to condone penalties for those who were delinquent on their contributions.
Relief schemes are authorized by Republic Act (RA) No. 11199 or the Social Security Act of 2018.
The 2019 program set a target of waiving P13.91 billion in penalties due from 132,000 delinquent employers in an amnesty that hoped to generate a combined P10.66 billion.
The SSS ended up collecting P7.88 billion from 55,750 employers who availed of the program.
On the financial standing of SSS, Mr. Capulong said the pension fund collected P159.8 billion in contributions from its members between January and the first week of September, up 17% from a year earlier.
Disbursement of loans, meanwhile, fell 59% to P16.53 billion during the period due to base effects. In 2020 the SSS launched a COVID-19 calamity loan program, which ended this year.
“The fund’s actuarial life has been a continuing concern; at some point in time, the fund is expected to be depleted. However, in the short term, while we are experiencing fewer contributions than expected, there is no risk that any benefits will not be given. I’d like to reassure our members that their benefits will continue to be paid,” SSS Senior Vice President and Chief Actuary Edgar B. Cruz said.
The SSS will also seek to make foreign investments as authorized by RA 11199, after the pandemic disrupted its plan to invest overseas, Mr. Capulong said.
He said the law allows SSS to invest a portion of its reserves in foreign currency-denominated instruments that are at least investment-grade, starting with a 1% share of the portfolio in 2019, and an additional 1% every year, up to a cap of 15%.
“Right now, we are trying to study the environment, we are definitely looking at global bonds and global equities and talking to foreign fund managers,” he said.
The SSS prepared a five-year plan to invest in overseas securities from 2019 but was forced to defer this to prioritize benefits and pension loans.
“We are actually seeing lower loan disbursements this year than last year, so that will help free up more funds to start investing abroad by next year,” he said.
“Incidentally, this is also connected to another provision of RA 11199, which made the coverage of OFWs (overseas Filipino workers) mandatory, so as we are able to accumulate foreign currency from contributions of OFWs, we will also have to be ready to invest abroad,” he added. – Beatrice M. Laforga