FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
Second Regular Session 
) 
8 JUL 21 ?3:33 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
From 1957 until 2006, the Social Security System (SSS) collected P469.7 Billion in 
contributions from its members and earned P205.2 Billion from its investments and other 
activities. Expenditures amounted to a total of P475.8 Billion in benefits and P54.9 Billion in 
operating expenses. Taken over the 49-year period, the SSS has cumulative revenues of 
P675.1 Billion, exceeding its cumulative expenditures of P530.7 Billion. 
However, the difference between cumulative contributions and cumulative benefits 
show a deficit of P6.1 Billion. The aforementioned deficit is attributable to the fact that 
thousands of financially-troubled employers are delinquent or have not remitted all 
contributions due and payable to the SSS. 
For the past two years, the SSS implemented condonaiion programs on penalties for 
housing and member loan delinquencies upon approval of the President of the Philippines. 
This enabled the SSS to improve its loan collection and update its loan accounts. However, 
for contribution delinquencies, a similar program would require an amendment io Republic 
Act No. 1161, as amended by Republic Act No. 8282 (or the Social Security Act of 1997). 
This was done in 1987 and again in 1997, when the SSS Charter was amended. By the end 
of 1997, the SSS was able to collect P859 Million on delinquent contributions. 
As of August 2007, there are 164,111 employers who are delinquent in the payment 
of mandatory contributions. These figures translate to a total delinquency of P7.713 Billion, 
consisting of P3.854 Billion in principal obligations and P3.859 Billion in penalties. From 
experience, collection through court litigation entails a long and tedious process. A 
contribution delinquency condonation program will facilitate and hasten the extra-judicial 
settlement of past due contributions from delinquent employers. 
To complement the existing reform measures undertaken by the SSS, a one-time 
condonation of penalties on delinquent social security contributions may be implemented. 
This measure aims to offer a reprieve to thousands of employers facing financial difficulties, 
while enabling their employees to resume entitlement to benefits and loans. Hence, the 
Senator 


FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
1 
2 
3 
4 ,  
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
n 
8 JUL 21 P333 
Introduced by Senator Richard J. Gordon 
AN ACT 
AUTHORIZING THE CONDONATION OF PENALTIES ON DELINQUENT 
SOCIAL SECURITY CONTRIBUTIONS, AND FOR OTHER PURPOSES 
Be if enacted by the Senate and the House of Representatives in Congress 
assembled: 
SECTION 1. Short 7Me. - This Act shall be known as the "Social Security 
Condonation Law of 2008." 
Sec. 2. Condonation of Contribution Penalty. - Notwithstanding the provisions of 
Section 30 of Republic Act No. 1161, as amended by Republic Act No. 8282, otherwise 
known as the Social Security Act of 1997, any employer who is delinquent or has not 
remitted all contributions due and payable to the Social Security System (SSS) may, without 
incurring the prescribed penalty: 
remit in full such delinquent principal contribution exclusive of interest and/or 
penalties within a period of six months from the effectivity of this Act; or 
submit in writing a proposal to pay in installment such delinquent contribution 
within a period of six months from the effectivity of this Act. 
a) 
b) 
Provided, that the employer shall submit together with the remittance or installment 
proposal the corresponding collection list 
Sec. 3. lnsfallment Proposal. - In the event an employer chooses to submit an 
installment proposal, the SSS shall give due course to and approve the same, subject to the 
implementing rules and regulations as the Social Security Commission shall prescribe; 
Provided that, the employer shall remit, upon submission of the installment proposal, a 
downpayment of not less than ten percent (10%) of its total contribution delinquency; 
Provided further, that the employer shall remit the balance thereof in equal monthly 
installments within a period not exceeding thirty-six (36) months from the date of approval of 
2 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
the proposal; and Provided fha//y, that such delinquent contributions covered in the 
installment plan shall bear an interest of not more than twelve percent (12%) per annum. 
Sec. 4. Effectivity of Condonation. ~ The penalty provided under Section 22(a) of 
Republic Act No. 8282 shall be condoned by virtue of this Act when and until all the 
delinquent contributions are remitted by the employer to the SSS; Provided that, in case the 
employer fails to remit in full the required delinquent contributions, or defaults in the 
payment of any installment under the approved proposal, within the availment period as 
provided in this Act, the penalties are deemed re-imposed from the time the contributions 
first became due, to accrue until the delinquent account is paid in full. Provided fudbel; for 
reason of equity, employers who settled arrears in contributions before the effectivity of this 
Act shall likewise have their accrued penalties waived. 
Sec. 5. Separability Clause. - In the event that any provision of this Act is declared 
unconstitutional, the validity of the other provisions shall not be affected by such declaration. 
Sec. 6. Repeali'ng Clause. - All laws, decrees, orders, rules and regulations and 
other issuances or parts thereof which are inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly 
Sec. 7. Effectivity. - This Act shall take effect 15 days following its publication in the 
Approved, 
Official Gazette or in at least two newspapers of general circulation. 
3