12

13

EZ
Lay
Ween

SEVENTEENTH CONGRESS OF THE)

REPUBLIC OF THE PHILIPPINES)

Second Regular Session ) 18 MR 19 P6329

SENATE
RECE:
SENATE BILLNO. 1753 ~ ff

OO sSsSSSSSSSSSSSSSSseFs
Prepared jointly by the Committees on Goveriment Corporations and Public Enterprises, and Labor, Employment, and
Human Resources Development with Senators Recto, Villanueva, Trilanes IV, Villa, Ejercito, Binay, Legarda, Escudero,
Poe, Sotto Il, Zubin, Gordon and Gatchalian as authors thereof.

AN ACT
RATIONALIZING AND EXPANDING THE POWERS AND DUTIES OF THE SOCIAL SECURITY
COMMISSION TO ENSURE THE LONG-TERM VIABILITY OF THE SOCIAL SECURITY SYSTEM,

FURTHER AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 1161, AS AMENDED BY
REPUBLIC ACT NO. 8282, OTHERWISE KNOWN AS THE “SOCIAL SECURITY ACT OF 1997”

‘Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SEC. 1. Section 4 of Republic Act No. 1161, as amended, is hereby further amended to read
as follows:
"SEC. 4. Powers and Duties of the Commission and SSS. ~
(2) The Commission. - For the attainment of its main objectives as set forth in
Section 2 hereof, the Commission shall have the following powers and duties:

“(1) To adopt, amend and rescind, [subject to the approval of the President of the
Philippines.) such rules and regulations as may be necessary to carry out the provisions and
purposes of this Act;

“(2) To establish a provident fund for the members which will consist of voluntary
Contributions of employers andlor employees, self-employed and voluntary members and their
earings, for the payment of benefits to such members or their beneficiaries, subject to such
rules and regulations as it may promulgate [and approved by the President ofthe Philippines];

XXX;



2

22

23

24

25

“(6) To compromise or release, in whole or in part, any interest, penalty or any civil
liability to SSS in connection with the investments authorized under Section 26 hereof, under
such terms and conditions as it may prescribe [and approved by the President of the
Philippines}

“(7) ANY LAW TO THE CONTRARY NOTWITHSTANDING, TO CONDONE, ENTER
INTO A COMPROMISE OR RELEASE, IN WHOLE OR IN PART, SUCH PENALTIES
IMPOSED UPON DELINQUENT SOCIAL SECURITY CONTRIBUTIONS REGARDLESS OF
THE AMOUNT INVOLVED UNDER SUCH VALID TERMS AND CONDITIONS IT MAY
PRESCRIBE THROUGH RULES AND REGULATIONS WHEN THE FINANCIAL POSITION
OF THE EMPLOYER DEMONSTRATES A CLEAR INABILITY TO PAY THE ASSESSED
DELINQUENCY.

“THE COMMISSION SHALL SUBMIT TO BOTH THE SENATE AND THE HOUSE
OF REPRESENTATIVES AN ANNUAL REPORT ON THE EXERCISE OF THE POWERS
UNDER THIS PROVISION, STATING THEREIN THE FOLLOWING FACTS AND
INFORMATION, AMONG OTHERS: NAMES AND ADDRESSES OF EMPLOYERS WHOSE
PENALTY DELINQUENCIES HAVE BEEN THE SUBJECT OF COMPROMISE OR
CONDONATION; AMOUNT INVOLVED; AMOUNT COMPROMISED OR CONDONED AND
THE JUSTIFICATIONS THEREON, TO DETERMINE THAT SAID POWERS ARE
REASONABLY EXERCISED AND THAT THE SSS IS NOT UNDULY DEPRIVED OF
REVENUES;

“(8) TO DETERMINE AND FIX FROM TIME TO TIME, THROUGH RULES AND
REGULATIONS, THE MINIMUM AND MAXIMUM MONTHLY SALARY CREDITS OF
MEMBER-EMPLOYEES, THE SCHEDULE AND THE RATE OF CONTRIBUTIONS OF
EMPLOYERS AND MEMBER-EMPLOYEES, THE RATE OF PENALTY ON DUE BUT

UNREMITTED CONTRIBUTIONS OF EMPLOYERS AND MEMBER-EMPLOYEES AND



23

24

25

UNPAID LOAN AMORTIZATIONS OF MEMBER-EMPLOYEES, TAKING INTO
CONSIDERATION ACTUARIAL CALCULATIONS, RATE OF BENEFITS, INFLATION, AND
OTHER RELEVANT SOCIO-ECONOMIC DATA; PROVIDED, THAT THE ADJUSTMENT OF
THE MAXIMUM MONTHLY SALARY CREDIT SHALL BE DONE GRADUALLY, TAKING
INTO ACCOUNT THE ECONOMIC AND FINANCIAL EXIGENCIES OF ALL
‘STAKEHOLDERS;

“(9) TO DEVELOP AND ADMINISTER A SEPARATE AND SPECIAL SOCIAL
SECURITY PROGRAM FOR VOLUNTARY, SELF-EMPLOYED, AND OTHER MEMBERS,
WITH UNIQUE ECONOMIC, SOCIAL, AND GEOGRAPHIC SITUATIONS, AS DETERMINED
BY THE COMMISSION: PROVIDED, THAT THE SPECIAL PROGRAM MAY HAVE
DIFFERENT CONTRIBUTION, PENSION AND BENEFIT SCHEMES, WHICH MUST BE FAIR
AND EQUITABLE, ACTUARIALLY SOUND AND VIABLE, AND DESIGNED TO ADDRESS
THE NEEDS AND CIRCUMSTANCES OF VOLUNTARY AND SELF-EMPLOYED, AND
OTHER MEMBERS: PROVIDED, FURTHER, THAT THE SPECIAL PROGRAM ENJOY THE
SAME LEGAL PRIVILEGES AS THE REGULAR SOCIAL SECURITY PROGRAM; AND

“171 (10)To approve, confirm, pass upon or review any and all actions of the SSS in
the proper and necessary exercise of its powers and duties hereinafter enumerated:

‘{b) The Social Security System. - Subject to the provision of Section ffour (4) 4,
[paragraph (A), subparagraph seven (7)] SUBSECTION (a) (10) hereof, the SSS shall have the
following powers and duties
KX)

“(2) To require the actuary to submit a valuation report on the SSS benefit program
every four (4) years, or more frequently as may be necessary, to undertake the necessary
actuarial studies and calculations concerning increases in benefits taking into account inflation

and the financial stability of the SSS, THE INDIVIDUAL INCOME GAP AND POVERTY



THRESHOLD FOR THE ELDERLY, SIMILAR BENEFITS PROVIDED BY OTHER SOCIAL
PROTECTION PROGRAMS OF THE GOVERNMENT; and to provide for feasible increases in
benefits every four (4) years, including the addition of new ones, under such rules and
regulations as the Commission may adopt [subject to the approval of the President of the
Philippines]: Provided, That the actuarial soundness of the reserve fund shall be guaranteed{:
Provided further, That such increases in benefits shall not require any increase in the rate of
contribution};

“XXX;

(9) TO ESTABLISH A SEPARATE ACCOUNT TO BE KNOWN AS THE
“INSURANCE FUND", SUBJECT TO SUCH RULES AND REGULATIONS AS IT MAY
PRESCRIBE, FOR WHICH SSS MEMBERS AND THEIR DEPENDENTS MAY APPLY FOR
LIFE OR NON-LIFE INSURANCE COVERAGE AS MAY BE DESIGNED BY THE SSS, FOR
THEMSELVES AND/OR THEIR DEPENDENTS. ANY EMPLOYER MAY LIKEWISE APPLY
FOR GROUP INSURANCE COVERAGE FOR ITS EMPLOYEES. THE PAYMENT OF THE
PREMIUMS/INSTALLMENTS FOR OPTIONAL LIFE OR NON-LIFE INSURANCE MAY BE
MADE BY THE INSURED OR HIS/HER EMPLOYER AND/OR ANY PERSON ACCEPTABLE
TO THE SSS.

“THE SSS SHALL ADMINISTER THE INSURANCE FUND DESCRIBED HEREIN
AND SUCH OTHER FUNDS THAT MAY BE CREATED FOR SPECIAL GROUP OF SSS
MEMBERS. THE SSS SHALL MAINTAIN THE REQUIRED RESERVES TO GUARANTEE
THE FULFILLMENT OF ITS OBLIGATIONS UNDER THIS ACT: PROVIDED, THAT THE
GENERAL LAW ON INSURANCE AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER SHALL HAVE SUPPLETORY APPLICATION INSOFAR AS IT IS NOT IN

CONFLICT WITH THIS ACT AND ITS RULES AND REGULATIONS.



10

12

13

14

15

“THE INSURANCE FUND SHALL BE SUBJECTED TO EXAMINATION BY THE
INSURANCE COMMISSION OR ITS DULY AUTHORIZED REPRESENTATIVE.

“(10) TO INSURE OR REINSURE ANY OF ITS INTERESTS OR PART THEREOF
WITH ANY REPUTABLE INSURANCE COMPANY WHETHER DOMESTIC OR FOREIGN;

“(11) TO ESTABLISH A SUBSIDIARY OR AFFILIATE AS IT MAY DEEM PROPER
IN CONNECTION WITH ITS LOAN PROGRAM FOR ITS. MEMBERS, WHICH FUNDS SHALL
AT ALL TIMES BE MANAGED SEPARATELY FROM THE FUNDS ALLOCATED FOR THE
RETIREMENT OF ITS MEMBERS;

“THE SSS SHALL IMMEDIATELY COLLECT UPON DEFAULT USING SUCH
LEGAL MEASURES AVAILABLE, INCLUDING BUT NOT LIMITED TO RESORT TO SMALL
CLAIMS COURT.

XXX."

SEC. 2. Section 8()) of Republic Act No. 1161, as amended, is hereby further amended to read

as follows:

“@ Employment - Any service performed by an employee for his employer except:

(1) Employment purely casual and not for the purpose of occupation or business of the
employer;

[(2) Service performed on or in connection with an alien vessel by an employee if he is
‘employed when such vessel is outside the Philippines:]

((3)] (2) Service performed in the employ of the Philippine Government or
instrumentality or agency thereof:

((4)] (3) Service performed in the employ of a foreign government or international
organization, or their wholly-owned instrumentality: Provided, however, That this exemption
notwithstanding, any foreign government, international organization or their wholly-owned

instrumentality employing workers in the Philippines or employing Filipinos outside of the



18

19

20

2

23

24

Philippines, SHALL enter into an agreement with the Philippine government for the inclusion of
such employees in the SSS except those already covered by their respective civil service
retirement systems: Provided, further, That the terms of such agreement shall conform with the
Provisions of this Act on coverage and amount of payment of contributions and benefits:
Provided, finally, That the provisions of this Act shall be supplementary to any such agreement:
and

[(5)] (4) Such other services performed by temporary and other employees which may
be excluded by regulation of the Commission. Employees of bona fide independent contractors
Shall not be deemed employees of the employer engaging the service of said contractors.”
SEC. 3. A new Section 9-B is hereby added to read as follows:

“SEC. 9B. COMPULSORY COVERAGE OF OVERSEAS FILIPINO WORKERS
(OFWS). COVERAGE IN THE SSS SHALL BE COMPULSORY UPON ALL SEA-BASED
AND LAND-BASED OFWS: PROVIDED, THAT THEY ARE NOT OVER SIXTY (60) YEARS
OF AGE.

“UNLESS OTHERWISE SPECIFIED HEREIN, ALL PROVISIONS OF THIS ACT
APPLICABLE TO COVERED EMPLOYEES SHALL ALSO BE APPLICABLE TO COVERED
‘SEA-BASED OFWS. FOR PURPOSES OF THIS ACT, LICENSED MANNING AGENCIES
ARE AGENTS OF THEIR PRINCIPALS AND ARE CONSIDERED AS EMPLOYERS OF SEA-
BASED OVERSEAS WORKER FOR THE PURPOSES OF THE IMPLEMENTATION OF
SOCIAL SECURITY LAW, ANY LAW TO THE CONTRARY NOTWITHSTANDING.

“FOR PURPOSES OF SOCIAL SECURITY, LAND-BASED OFWS ARE
CONSIDERED COMPULSORY SELF-EMPLOYED MEMBERS OF THE SSS, THE
DEPARTMENT OF FOREIGN AFFAIRS (DFA), THE DEPARTMENT OF LABOR AND
EMPLOYMENT (DOLE) AND ALL ITS AGENCIES INVOLVED IN SENDING OFWS FOR

EMPLOYMENT ABROAD ARE MANDATED TO NEGOTIATE BILATERAL LABOR



18

19

10

a

23

24

AGREEMENTS WITH THE OFWS’ HOST COUNTRIES TO SEE TO IT THAT THE
PRINCIPALS OF SEA-BASED FILIPINO WORKERS ARE PAYING THE REQUIRED SSS
CONTRIBUTIONS. THEY SHALL LIKEWISE NEGOTIATE BILATERAL LABOR
AGREEMENTS TO SEE TO IT THAT EMPLOYER'S SHARE OF THE LAND-BASED OFWS
MAY LATER BE SECURED THROUGH JOINT ENFORCEMENT BY BOTH COUNTRIES,
‘SIGNATORIES TO THE SAME AGREEMENT, IN WHICH CASE LAND-BASED OFWS IN
THE SAID FOREIGN COUNTRY WILL NO LONGER BE TREATED AS COMPULSORY
SELF-EMPLOYED MEMBERS OF THE SSS BUT RATHER COMPULSORY REGULAR
COVERED MEMBERS WHICH HAVE EMPLOYER-EMPLOYEE SHARES IN THEIR
CONTRIBUTIONS. PROVIDED, THAT, IN COUNTRIES WHICH ALREADY GIVE SOCIAL
SECURITY TO FILIPINOS, THE DFA THROUGH THE PHILIPPINE EMBASSIES AND THE
DOLE SHALL DETERMINE THE FEASIBILITY OF NEGOTIATING FURTHER
AGREEMENTS THAT WILL SERVE THE BEST INTERESTS OF THE OFWS;

“THE DEPARTMENT OF FOREIGN AFFAIRS (DFA), THE DEPARTMENT OF
LABOR AND EMPLOYMENT (DOLE) AND THE SOCIAL SECURITY SYSTEM (SSS) SHALL
ENSURE COMPULSORY COVERAGE AND ACCESS OF OFWS TO SOCIAL SECURITY
AGREEMENTS AND LABOR AGREEMENTS CONCLUDED BETWEEN THE PHILIPPINES
AND OTHER STATES OR COUNTRIES.”

SEC. 4. Section 12 of Republic Act No. 1161, as amended, is hereby further amended to read

as follows:

“SEC. 12. Monthly Pension. -
(a) The monthly pension shall be the highest of the following amounts:
(1) The sum of the following

(i) Three hundred pesos (P300.00); plus

(i) Twenty percent (20%) of the average monthly salary credit; plus



20

2

22

24

25

(i) Two percent (2%) of the average monthly salary credit for each credited year of
service in excess of ten (10) years; or

(2) Forty percent (40%) of the average monthly salary credit; or

(3) One thousand pesos (P1,000.00): Provided, That the monthly pension shall in no
case be paid for an aggregate amount of less than sixty (60) months

(b) Nothwithstanding the preceding paragraph, the minimum pension shall be One
thousand two hundred pesos (P1,200.00) ) for members with at least ten (10) credited years of
service and Two thousand four hundred pesos (P2,400.00) for those with twenty (20) credited
years of service: PROVIDED, THAT, THE COMMISSION, UPON DETERMINATION OF
ACTUARIAL SOUNDNESS, MAY PROVIDE A HIGHER PENSION INCREASE THAN THE
AMOUNTS SPECIFIED HEREIN.”

“(C) ADDITIONAL BENEFIT ALLOWANCE. PURSUANT TO MEMORANDUM FROM
THE EXECUTIVE SECRETARY DATED 22 FEBRUARY 2017, BY AUTHORITY OF THE
PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, AN ADDITIONAL
MONTHLY BENEFIT ALLOWANCE AMOUNTING TO ONE THOUSAND PESOS (P1,000.00)
SHALL BE GIVEN TO ALL RETIREMENT, DEATH, AND DISABILITY PENSIONERS
RECEIVING MONTHLY PENSIONS IN OR AFTER JANUARY TWO THOUSAND
SEVENTEEN (2017). THE COMMISSION MAY DETERMINE THE GRANT OF AHIGHER
BENEFIT ALLOWANCE: PROVIDED, THAT THE ACTUARIAL SOUNDNESS OF THE
RESERVE FUND SHALL BE GUARANTEED."

‘SEC. 5. Section 18 of Republic Act No. 1161, as amended, is hereby further amended to read

as follows:

“SEC. 18. Employee's Contributions. —
[(a)] Beginning [as of] ON the last day of the calendar month when an employee's

Compulsory coverage takes effect and every month thereafter during his employment, the



1 employer shall deduct and withhold from such employee's monthly salary, wage, compensation

2 OF eamings, the employee's contribution in an amount corresponding to his salary, wage,
3 compensation or earnings during the month in accordance with {the following schedule:
SALARY RANGE OF MONTHLY MONTHLY CONTRIBUTION
BRACKET COMPENSATION SALARY
crepit | EMPLOYER | EMPLOYEE | TOTAL
7 7,000.00 1,249.99 7000 3070 390 4.00
1,250.00 - 1,749.99 1500 76.00 50.00 126.00
i 41,750.00 - 2,249.99 2000 101.30 66.70 168.00
v 2,250.00 -2.749.99 2500 126.70 83:30 210.00
v ; 3000 15200 100.00 252.00
vi 3500 177.30 116.70 294.00
vi 4000 20270 133.30 336.00
vill 4500 228.00 150.00 378.00
x 5000 253.30 166.70 420.00
x 5500 278.70 183.70 462.40
x! 6000 304.00 200.00 504.00
xil 6500 329.30 216.70 546.00
xill 7000 354.70 233.30 588.00
xv 7500 380.00 250.00 630.00
xv +8000 405.30 266.70 672.00
xv F 8500 430.70 283.30 714.00
xvlL 8,750.00 - OVER 9000 456.00 300.00 756.00
4 “The foregoing schedule of contribution shall also apply to self-employed and voluntary
5 members.
6 “The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00)
7 effective January Nineteen hundred and ninety six (1996): Provided, That it shall be
8 increasedby One thousand pesos (P1,000.00) every year thereafter until it shall have reached
9 Twelve Thousand pesos (P12,000.00) by Nineteen hundred and ninety nine (1999): Provided,
10 further, That the minimum and maximum monthly salary credits as well as the rate of
11 contributions may be fixed from time to time by the Commission through rules and regulations
12 taking into consideration actuarial calculations and rate of benefits, subject to the approval of
13 the President of the Philippines.) THE MONTHLY SALARY CREDITS, THE SCHEDULE AND
4 THE RATE OF CONTRIBUTIONS AS MAY BE DETERMINED AND FIXED BY THE
15 COMMISSION.



1 “THE MONTHLY SALARY CREDITS, THE SCHEDULE AND THE RATE OF

2 CONTRIBUTIONS SHALL ALSO APPLY TO SELF-EMPLOYED, VOLUNTARY, AND
3 OTHER MEMBBERS.”
4 SEC. 6. Section 22, paragraph (a) of Republic Act No. 1161, as amended, is hereby further

5 amended to read as follows:

6 “SEC. 22. Remittance of Contributions. - (a) The contribution imposed in the
7 Preceding section shall be remitted to the SSS within the first ten (10) days of each calendar
8 month following the month for which they are applicable or within such time as the Commission
9 may prescribe. Every employer required to deduct and to remit such contributions shall be
10 able for their payment and if any contribution is not paid to the SSS as herein prescribed, [he]
u THE DELINQUENT EMPLOYER shal pay besides the contribution a penalty thereon fof three
2 Percent (3%) per month] from the date the contribution falls due until paid
13 “THE RATE OF THE PENALTY ON DELINQUENT CONTRIBUTIONS PER MONTH
14 SHALL BE DETERMINED AND FIXED BY THE COMMISSION THROUGH RULES AND
15 REGULATIONS, TAKING INTO CONSIDERATION THE CURRENT INFLATION RATE AND
16 OTHER RELEVANT SOCIO-ECONOMIC DATA. If deemed expedient and advisable by the
7 Commission, the collection and remittance of contributions shall be made quarterly or semi-
18 annually in advance, the contributions payable by the employees to be advanced by their
19 respective employers: Provided, That upon separation of an employee, any contribution so paid
20 in advance but not due shall be credited or refunded to his employer.”
2 SEC. 7. Section 26 of Republic Act No. 1161, as amended, is hereby further amended to read

22 as follows:

23 “SEC.26. Investment of Reserve Funds. - All revenues of the SSS that are not
24 needed to meet the current administrative and operational expenses incidental to the carrying
25 Out of this Act shall be accumulated in a fund to be known as the "Reserve Fund." Such

10



19

20

21

22

23

24

25

Portions of the Reserve Fund as are not needed to meet the current benefit obligations thereof
Shall be known as the Investment Reserve Fund" which the Commission shall manage and
invest with the skil, care, prudence and diligence necessary [under the circumstances then
Prevailing that a prudent man acting like capacity and familiar with such matters would
exercise in the conduct of an enterprise of a like character and with similar aims, Pursuant
thereto, and inline withthe basic principles of safety, good yield and liquidity, the Commission
Shall invest funds] to eam an annual income not ess than the average rates of treasury bills or
any other acceptable market yield indicator in any or in all of the following UNDERTAKING,
UNDER SUCH RULES AND REGULATIONS AS MAY BE PRESCRIBED BY THE
COMMISSION: PROVIDED, THAT INVESTMENTS SHALL SATISFY THE REQUIREMENTS
OF LIQUIDITY, SAFETYISECURITY AND YIELD IN ORDER TO ENSURE THE ACTUARIAL
SOLVENCY OF THE FUNDS OF THE SSS: PROVIDED, FURTHER, THAT THE SSS SHALL
SUBMIT AN ANNUAL REPORT ON ALL INVESTMENTS MADE TO BOTH THE SENATE
AND HOUSE OF REPRESENTATIVES;

“KKK

“(b) In bonds, securities, promissory notes or other evidence of indebtedness of the
Government of the Philippines, or any of its agencies or instrumentalites to finance domestic
infrastructure projects such as roads, bridges, ports, telecommunications, and other similar
Projects[: Provided, That the instruments issued by an agency or instrumentality of the
government shall be guaranteed by the Government of the Philippines or any government
financial institution or acceptable multilateral agency: Provided, further, That the SSS shall
have priority over the revenues of the projects: Provided, finally, That such investments shall
Not exceed thrity percent (30%) of the Investment Reserve Fund,] OR EQUITY INVESTMENTS
IN PRIVATE SECTOR INFRASTRUCTURE OR DEVELOPMENT PROJECTS NORMALLY

FINANCED, CONSTRUCTED, OPERATED, AND MAINTAINED BY THE PUBLIC SECTOR



16

17

18

19

20

2a

22

23

24

25

BUT WHICH WILL BE WHOLLY OR PARTLY IMPLEMENTED BY THE PRIVATE SECTOR
THROUGH CONTRACTUAL ARRANGEMENTS UNDER REPUBLIC ACT NO. 6957, AS
AMENDED BY REPUBLIC ACT NO. 7718;

“(C)ln bonds, securities, promissory notes or other evidence of indebtedness of
government financial institutions or goverment corporations with acceptable credit or
guarantee[; Provided, That such investments shall not exceed thirty percent (30%) of the
Investment Reserve Fund];

“(@) In bonds, securities, deposits, promissory notes or other evidence of indebtedness
of any bank doing business inthe Philippines and in good standing withthe Bangko Sentral ng
Pilpinas to finance loans to private corporations doing business in the Philipines, including
Schools, hospitals, smalland-medium scale industries, cooperatives and non-governmental
organizations, in which case the collaterals or securities shall be assigned to the SSS, under
Such terms and conditions as the Commission may prescribe: Provided, That in the case of
bank deposits, they shall not exceed at any time the unimpaired capital and surplus or total
Private deposits of the depository bank, whichever is smaller: Provided, further, That said bank
Shall first have been designated as a depository for this purpose by the Monetary Board of the
Bangko Sentral ng Pilipinas: Provided, finaly, That such investments shall not exceed forty
Percent (40%) of the Investment Reserve Fund];

“(e) In bonds, securities, promissory notes or other evidence of indebtedness of shelter
agencies of the National Government or financial intermediaries to finance housing loans of
members; and in long-term direct individual or group housing loans giving priority to the low:
income groups, up to a maximum of ninety percent (90%) of the appraised value of the
Properties to be mortgaged by the borrowers; and

“In short and medium term loans to members AND PENSIONERS such as salary,

educational, livelihood, [marital] calamity, [and] emergency AND PENSION LOANS:

12



19

20

2a

22

23

24

[Provided, That not more than thirty five (35%) of the Investment Reserve Fund at any time
Shall be invested for housing purposes: Provided, further, That not more than ten percent
(10%) of the Investment Reserve Fund shall be invested in short and medium term loans}

“(f) In bonds, securities, promissory notes or other evidence of indebtedness of
educational or medical institutions to finance the construction, improvement and maintenance
Of schools and hospitals and their equipment and facities{:Provided, That such investments
Shall not exceed ten percent (10%) of the Investment Reserve Fund];

“GG In real estate property including shares of stocks involving real estate property,
and investment secured by fist mortgages on real estate or other collaterals acceptable to the
SSS: Provided, That such projects and investments shall, in the determination of the
Commission, redound to the benefit of the SSS, its members, as well as the general publicf:
Provided, further, That investment in real estate property, including shares of stocks involving
real estate property, shall not exceed five percent (5%) of the Investment Reserve Fund:
Provided, finaly, That investments in other income eaming projects and investment secured by
frst mortgages and or other collaterals shall not exceed twenty five percent (25%) of the
Investment Reserve Fund];

“(h) In bonds, debentures, securities, promissory notes or other evidence of
indebtedness of any prime corporation or multilateral institutions to finance domestic projects:
Provided, That the issuing or assuming entity or its predecessors shall not have defaulted in
the payment of interest on any ofits securities and that during each of any three (3) including
the last two (2) ofthe five (6) fiscal years next preceding the date of acquisition by the SSS of
Such bonds, debentures or other evidence of indebtedness, the net earings of the issuing or
assuming institution available for its fixed charges, as defined in this Act, shall have been not

less than one and one-quarter times the total of its fixed charges for such year [: Provided,

13



12

13

14

15

7

18

19

20

21

22

23

24

25

further, That such investments shall not exceed thirty percent (30%) of the Investment Reserve
Fund];

“()) In preferred or common shares of stocks listed or to be listed in the stock
exchange AND OTHER SECURITIES TRADING MARKETS or options or warrants to such
Stock{s] or, subject to prior approval of the Bangko Sentral ng Pilipinas, such other risk
management instruments of any prime or solvent corporation or financial institution created or
existing under the laws of the Philipines with proven track record of proftabilty over the last
three (3) years and payment of dividends at least once over the same petiodl: Provided,
further, That such investments shall not exceed thirty percent (30%) of the Investment Reserve
Fund];

“() In domestic or foreign mutual funds in existence for at least three (3) years [:
Provided, That such investments shall not exceed twenty percent (20) of the Investment
Reserve Fund: Provided, further, That investments in foreign mutual funds shall not exceed
one percent (1%) of the Investment Reserve Fund in the fist year which shall be increased by
one percent (1%) for each succeeding year, but in no case shall it exceed seven and one-half
Percent (7.5%) of the Investment Reserve Fund];

“(h) In foreign currency deposits or [tiple “A"] INVESTMENT-GRADE RATED foreign
Currency-denominated debts, prime and non-speculative equities, and other Bangko Sentral ng
Pilpinas approved financial instruments or other assets issued in accordance with the existing
'aws of the countries where such financial instruments are issued: Provided, That these
instruments or assets are listed in bourses of the respective countries where these instruments
OF assets are issued: Provided, further, That the issuing company has proven track of record of
Profitability over the last three (3) years and [a record of regular dividend pay-out] PAYMENT
OF DIVIDENDS AT LEAST ONCE over the same period [:Provided, finally, That such

investments shall not exceed one percent (1%) of the Investment Reserve Fund in the first year

14



19

20

2

22

24

Which shall be increased by one percent (1%) for each succeeding year, but in no case shal it
exceed seven and one-half percent (7.5%) of the Investment Reserve Fund);

“() Im loans secured by such collaterals like cash, govemment securities or
Guarantees of multilateral institutions{:Provided, That such investments shall not exceed thirty
Percent (30%) of the Investment Reserve Fund]; and

“(m) In other Bangko Sentral ng Pilipinas approved investment instruments with the
Same intrinsic quality as those enumerated in paragraphs (a) to (I) hereof, subject to the
Policies and guidelines which the Commission may formulate.

‘No portion of the Investment Reserve Fund or income thereof shall accrue to the
general fund of the National Government or to any ofits agencies or instrumentalites, including
government-owned or controlled corporations, except as may be allowed under this Act:
Provided, That no portion of the Investment Reserve Fund shall be invested for any purpose or
any instrument, institution or industry over and above the prescribed cumulative ceilings as
follows:

40% in private securities

35% in housing

30% in real estate related investments

10% in short and medium-term member loans

30% in government financial institutions and corporations

30% in infrastructure projects

15% in any particular industry

7.5% in foreign-currency denominated investments].”

SEC. 8 Implementing Rules and Regulations. - The Commission shall promulgate the

Necessary rules and regulations to implement this Act not later than ninety (90) days aftr its effectivity,

15



sv

12

13

14

16

17

18

19

20

21

22

SEC. 9. Transitory Clause. - Any employer who is delinquent or has not remitted all
Contributions due and payable to the SSS may, within six (6) months from the effectivity of this Act,
remit said contributions or submit a proposal to pay the same in installment within a period AS
APPROVED BY THE SOCIAL SECURITY COMMISSION from the effectivity of this Act without
incurring the prescribed penalty, subject to the implementing rules and regulations which the
Commission may prescribe: Provided, That the employer submits the corresponding collection lists
together with the remittance or proposal to pay in installments: Provided, further, That in case the
employer fails to remit contributions within the six-month grace period or defaults in the payment of any
amortization provided in the approved proposal, the prescribed penalty shall be imposed from the time
the contributions first became due as provided in

Section 22 (a) hereof,

SEC. 10. Separability Clause. - If, for any reason, any part, section, or provision of this Act is
held invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be in full
force and effect.

SEC. 11. Repealing Clause. - All laws, proclamations, executive orders, rules and regulations
or parts thereof inconsistent with this Act are hereby repealed, modified or amended
accordingly: Provided, That no person shall be deemed to be vested with any property or other right by
Virtue of the enactment or operation ofthis Act.

SEC. 12. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved,

16