Republic of the Philippines

fy “eECEWE o
HOUSE OF REPRESENTATIVES mare

Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

430

HOUSE BILL No.8"

Introduced by Representative Stella Luz A. Quimbo

AN ACT INSTITUTING A NATIONAL UNEMPLOYMENT INSURANCE
PROGRAM FOR THE PHILIPPINES AND APPROPRIATING FUNDS THEREFOR

EXPLANATORY NOTE

For the month of April 2020, the Philippine Statistical Authority recorded an
unemployment rate of 17.7 percent, the highest level recorded in the last six decades,
brought about by the COVID-19 pandemic. This disruption, which caused the massive
displacement of workers, underscored the importance of a national unemployment
insurance program, which aims to provide cash assistance to displaced workers to
prevent substantial reductions in consumption levels caused by job loss and support
for job search activities.

The Philippine Labor Force

The Philippine labor force, defined as the population 15 years old and above who are
either employed or unemployed, consisted of about 46 million individuals as of January
2022. The labor force had to endure extraordinary economic conditions due to the
pandemic, where business and worker confidence was low, such as shrinking by about
7.6 percent in April 2020 when compared to the year before. The total number of
employed and unemployed individuals as of January 2022 was about 43.02 and 2.92
million, respectively.

The unempioyment rate has been steadily declining, from 7.35 percent in 2010 to 5.1
percent in 2019 (see Figure 1). Due to the effects of the COVID-19 pandemic,
however, the unemployment rate in 2020 was abnormally high at about 10.3 percent.
Further, the 2021 unemployment rates would indicate that the pandemic impaired the
gains made by the country in the past decade. Government must take swift and
appropriate action to ensure this would not be the case.


Figure 1. National Unemployment rate by year’

The behavior of the unemployed prior to the COVID-19 pandemic can be described
as follows. Based on the 2016 Labor Force Survey, about 2.96% of the labor force or
41% percent of the unemployed were in the process of active job search at the time
of interview, The average period of time that these individuals had been in the process
of job search, as of the time of the interview, is four (4) weeks. About 96% of the
jobseekers had been engaged in job search for a maximum of twelve (12) weeks.
Moreover, as shown in Figure 2, college undergraduates and graduates account for
close to 50% of all jobseekers. Individuals who had been in the job search process for
over four (4) weeks also tend to be the better educated, indicating their willingness to
wait for better job opportunities

No education. 0 mentary
undergraduate. 5% i
eraduate, 4%

High school
undergraduate,
11%

* Data sourced from the Philippine Statistics Authority

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Figure 2. Distribution of Jobseekers, by highest educational attainment

Table 1 shows the profile of Filipino workers, by type of employment. Of the 41.75
million workers, wage and salary workers constitute the biggest sub-group (63.8
percent). About half of all workers (50.2%) are employed in private establishments,
and of these, only 43% work for registered establishments, indicating that many belong
to the informal economy and are not captured by social protection programs.

Another noteworthy observation is that 27.2 percent of private employees are non-
regular workers, which include workers under fixed-term contracts, known as “endo”
contracts. From Tabie 1, there are at least 3.499 million of these “endo” workers (i.e.,
casual and contractual/project-based), excluding the “endo” workers that are agency-
hired and are deployed to private firms through service contracts. Using data from the
integrated Survey on Labor and Employment (ISLE) of the Philippine Statistics
Authority, there were 691 thousand agency-hired workers in 2016.

| wage and salary workers
| __wernes for pate nousenolds
Werkes

Regular workers

1,787 466

{or private establishment Hl __20,980.482

18,283,052

Non-regular workers 5.897.430
Probationary workers 4,705,626,
762.133,

Casual workers

Contractualiproject-based workers | 2,737,186
Seasonal workers | 385,954
Agprenticos/eamners 106,563

Worked for government cr government
___sorporation _ 3.784.039
‘Worked with pay in own family operated
faim orbusiness - 108,755

Self-employed without any paid employee - 11,441,892

Employer in own family-operated farm or
business _

Worked wit
farm or business

4,926,801

Pay In Own family-operated
Inpaid family worker)

2,588,361

Total 41,754,815

Table 1. Number of Workers, by type of employment?
Objectives of Unemployment Insurance

Unemployment insurance program seek to protect individuals against the risk of
income loss caused by job loss, and provide support during the period of job search
while maintaining incentives to proceed with job search. In determining the optimal
amount of unemployment benefits, i.e., the weakening of job search intensity caused

® Source of basic data: Labor Force Survey and the Integrated Survey on Labor and Employment.
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by the receipt of unemployment payouts. Other factors include the average duration
of unemployment spells, including institutional factors.

Thus, unemployment insurance performs two roles. First, it smoothens consumption
of individuals across periods of employment and unemployment, and prevents
individuals from falling into episodic spells of poverty. Second, it performs a
productivity-enhancing function (Weber 2010). In periods of economic decline,
unemployment insurance “stores” idle labor outside the production process and
restores it back to the production process at higher productivity levels when the
economy has recovered, capacity is restored, and after job search has improved the
employer-employee match. Moreover, in situations where firms repurpose capital or
revise their business strategies, requiring downsizing of their workforce, the presence
of unemployment insurance facilities such productivity-improving steps taken by
firms.>

Unemployment Benefits in the Philippines

The Social Security System (SSS) and the Government Service Insurance System
(GSIS) provide social security benefits inciuding unemployment benefits to private and
public sector employees, respectively. Based on the 2016 Annual Poverty Indicator
Survey, of the 23.9 million workers in the private sector, 8.6 million reported that they
were SSS members (36.2 percent). On the other hand, the survey indicates that of the
3.81 million government workers, 2.26 million (59.3 percent) reported having GSIS
membership.

SSS members are entitled to “unemployment insurance or involuntary separation
benefits” amounting to 50 percent of the average monthly salary credit for a maximum
of 2 months as provided in Section 14-B of Republic Act No. 11199,* or about 10,000
pesos per month. On the other hand, for GSIS members, Section 12 of Republic Act
No. 8291 provides simitar unemployment benefits in the form of two monthly payments
equivalent to 50 percent of the average monthly compensation.

The eligibility requirements for unemployment assistance under the SSS program
include:

a. Amember is not over 60 years old;

b. Amember must have paid contributions to the SSS for at least 36 months,
with at least 12 payments remitted in the Jast 18 months immediately
preceding involuntary separation from work;

c. Amember must not have received an unemployment benefit in the three
years prior to involuntary unemployment or separation; and

d. Amember must have been involuntarily separated from employment
provided that such separation did not arise from fault or negligence of the
employee and which may be attributed to any of, but not limited to, the
following: (a) installation of labor-saving devices; (b) redundancy; (c)

> Carter, et al. 2023. international Labour Organization. https://www.ilo.org/wemsp5/groups/public/—-asia/-—
ro-bangkok/documents/publication/wems_229985.odF
* Based on RA 11199, for the year 2020, the maximum monthly salary crecit is 20,000 pesos

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retrenchment to prevent loss; (d) closure or cessation of operation; or (e)
disease/illness.

Based on Section 283 of the Labor Code, job losses due to serious business losses
or closure brought about by natural disasters and economic downturns are also
considered as “involuntary separation.” Specific circumstances of “involuntary
separation” are also found in cases decided on by the Department of Labor and
Employment such as the case of Luis Doble v. ABB, Inc/Initin Desai.® In addition,
workers who stopped reporting for work due to serious insult by the employer or his
representative on the honor and person of the employee, inhumane and unbearable
treatment, the commission of an offense or crime against a worker or his family, and
similar situations can likewise qualify for unemployment assistance. Finally, the benefit
applies to all private sector workers, including household helpers and overseas Filipino
workers who were laid off, terminated, or involuntarily separated from their work.

Other programs that provide unemployment benefits in the Philippines are identified
in Weber (2010):

- Under Presidential Decree No. 422 or the Labor Code of the Philippines,
employers are obliged to pay severance pay amounting to one month or at
feast one month pay per year of employment when an employment is
terminated due to closure of establishment, reduction of personnel, or when
an employee has been found suffering from a disease where his continued
employment is prejudicial to his health and to that of his co-employees.

- Workers who are members of the Pag-IBIG fund are entitled to a loan up to
80 percent of accumulated savings as bridge financing for a period of
unemployment

- Assistance of job facilitation are available for unemployed workers at Public
Employment Service Offices found in every city and municipality.

The need for a National Unemployment Insurance Program

From January to April 2020, 4.864 million Filipinos lost their jobs. By the end of Apri,
there were 12.97 million who had jobs but were not at work, largely due to forced
business closures during the lockdown. Many of these 12.97 million workers are also
at risk of job loss, owing to liquidity constraints faced by their employees by the end of
the lockdown. This massive number of actual and potentially laid-off workers cannot
be supported by the current programs providing unemployment assistance. The
amount of assistance is limited, and the coverage of the programs is even more
limited.

The current system of providing unemployment benefits can be described as:

- Fragmented: multiple agencies are involved in the provision of unemployment
benefits

- Non-inclusive: government workers who are on a fixed term and contractual
are not GSIS-covered; informal workers are excluded from any government
program providing unemployment support; OFWs have special programs

5 Doble v. Desai, G.R. No. 215627, June 5, 2017.


under the OWWA but only relief assistance to displaced/laid-off OWWA
members;

- Limited: a cross-country comparison shows that unemployment benefits
available to Filipino workers are lower compared to its income comparators,
particularly because unemployment benefits for private workers in the
Philippines are capped at about minimum wage, whereas in other countries,
benefits are based on actual pay (see Table 3). Moreover, there are limited
mechanisms for intertemporal risk pooling, and no capacity to insure against
unemployment of a massive scale.

Overall, the current system of unemployment assistance is unable to efficiently provide
a sufficient scale of social protection of workers, especially when the causes of job
loss are exogenous shocks of massive scale and causing a general economic
downturn. Without a national unemployment insurance program that can pool risks of
job loss and mobilize resources effectively, job losses arising from natural disasters,
pandemics, and general economic downturns can cause sharp increases in poverty
incidence. And because poverty has inter-generational impacts, without a national
unemployment insurance program, development gains achieved by the government
can easily be lost with exogenous economic shocks.

The proposed National Unemployment Insurance Program

This bill proposes the institutionalization of a National Unemployment Insurance
Program which seeks to protect workers from the risk of substantial income toss and
consumption reduction caused by job loss, at no fault of the worker by providing
unemployment benefits for a period of time during which the unemployed individuals
look for new jobs. The key features of the program are as follows:

- Compulsory participation by individuals who are formally employed in the
private and public sectors;

- Voluntary participation by the self-employed and informal sector, encouraged
through incentives;

- Progressive, income-based premium contributions;

- Shared premium contributions among the government, employer, and
employee;

- Basic unemployment insurance benefits limited to at most 3 monthly
payments, each payment equivalent to 80 percent of the worker's basic pay
prior to separation of work;

- Additional benefits in the form of training, training allowances, and job
counselling for the unemployed;

- Monitoring mechanisms to minimize adverse systemic effects such as moral
hazard;

- The creation of a Philippine Job Insurance Corporation (“PhilJobs"), tasked to
administer and implement the National Unemployment Insurance Program
and designed to be administratively lean and efficient;

- The designation of SSS as the Interim Program Manager for a maximum of
the first 5 years of the program existence;

- The creation of an Endowment Fund which will fully subsidize premium
contributions for workers and employers on the first year of Program
operations, as a form of economic stimulus; and


- The creation of a Reserve Fund which will perform, inter alia, the
intertemporal risk pooling and allow sufficient benefit payouts during
infrequent spells of massive unemployment

A program with the above salient features is needed to increase the resilience of the
Philippine economy. The COVID-19 pandemic has shown that workers are vuinerable
to substantial reductions in income and the risk of falling into poverty. Moreover, the
COVID-19 experience has shown that government dole-out programs are an
inefficient way to provide social protection, especially if on a massive scale.

In view of the foregoing, the passage of this bill is earnestly sought.

STELLA Lz A. QUIMBO, PhD
Representative
Second District, Marikina City


Table 3. Unemployment insurance schemes in select ASEAN countries

‘Country Coverage T Eiigibility Contributions: Benefits T ‘Duration

Viainam | Covers enpioyees | Pad coninbutons | 3% of earings: 80% afte average | Vanes fom So 12
wih permanent or | foratieast 12 shared equally contributory months, depending
open-ended months within the | detween employer. | earnings over te | on length of por
contracts, for | last 24 months ‘employee, anc last 6 months, insured
employers with at government limites to 20imes | employment
least 10 employees, | Reyistered for tha value ofthe
including both unemployment with minimum wages
private and state | the Employment “Treatment same lor
enterprises Public | Service Cente involuntary and
Service units and | Applied for voluntary
‘armed forces also insurance benefits
covered vaihia 15 wovking

| days since
| registration |
|
Jobless for 15 }
| working days ater
| eaisration
| Notin recep of
| pension.

Phippines | Pivate employees | SSS SES Theladedin | SSS. 50% of S85: 2 morihs
covered tough | 38 contributions, 12 | overall SSS premium, | monthly average once every 3 years
S538. public atwhich must be | 12% of monty Salary rect
empioyees covered | from tho last 18 | salary credit (6% from | maximum of GSIS: 2 months up
‘through GSI!S- months, employer, 4% from P10,000 | to 6 months:

| unemployment due | employee) depending on
to invowntary GIS: 50% at numberof prior
separation; not over | GSIS: Included in | average monthly | contributions, where
Soyears of age | GSiSiegrated | compensation the | those entited to

| premium, based on | last 3 years. | more than 2 months

| sis: Paid monthiy | shall receive two

| cortioutions fort | compansation (12% | months’ worth of

| east 1 year but ess | from employer, 9% benefits in the fst
than 1Syears prior_| from emloyee) payment

| to separation;
[ unemployment due

to involuntary
separation
(@bolion of postion
| er reorganization)



County] Coverage Eligibity Coniribations Benefits] uration
|
Malaysia | Aivemployees ‘inimam T2montis | 014% of pay shared | Job search “Tob search
employed undera | ofcontibution | equally between atowance: 80% of | allowance: minimum
| Contract of service | (varies depending employers and covered wages the | of3 months, upto
orapprentceship | on number of employees, upto _| fret month, 50% the | months.
with an employer claims) | MYR 4,000 per month | second, 40% the
dre covered i third and fourth, and
whether oral orin | Unemployment due | 30% of the fftn and
wiring; but casual | to follwing reasons: | Sith months
workers, pubic | retrenched. i
Sector workers, | resigned under a ‘Also oferseary |
| domestic workers | voluntary separation employment. |
ate excluded scheme. incentive, raining |
constructively allowance |
Giamissed, resigned |
| Gue‘oinreatto | |
family of sexval
harassment, |
resigned due to
command to
perform work
Butsde scope of
‘woo whieh A
endangers safely |
resigned due |
force majeure, |
elosure of workplace |
de to natural |
disaster, bankruptcy |
ot workplace |
Thailand | Aiprivate secior | Atleast § months of | 1% of eamings, BW oFaured | Upto WO aays eh
workers are Contributions in the shared equaly earings, based on | involuntary, up to 80
Covered. except | last 8 months | between employer | the highest pad 3 | days for voluntary
farmers, domestic and employees, wh a | months in he last |
workers, and those | Termination must | eaponmantaly | months before job
th pre-2008 notbe due to job | maximum | oss, capped at
benefit schemes. violation, criminal | maximum daily.
| act orilegalact | Plus 0.25% of benef
| | earnings from
Must be registered government A voluntary, ate is
with Employment | 30%
L Office | i



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 490

Introduced by Representative Stella Luz A. Quimbo

AN ACT INSTITUTING A NATIONAL UNEMPLOYMENT INSURANCE
PROGRAM FOR THE PHILIPPINES AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Short Title. - This Act shall be known and cited as the “PhilJobs Act of
2020"

Chapter I. Guiding Principles and Objectives

SECTION 2. Declaration of Policy. - It shall be the policy of the State that labor is
affirmed as a primary social economic force. As such, the State shall protect the rights
of workers and promote their welfare. During episodes of unemployment, the State
shall provide assistance to displaced workers to ensure that consumption levels are
not substantially reduced and that sufficient resources are available for job search or
the identification of alternative means of livelihood. The purpose of unemployment
insurance is to provide temporary and partial income replacement to insured persons
who lose their jobs while they seek to obtain new employment

SECTION 3. Guiding Principles. - In pursuit of a National Unemployment Insurance
Program, this Act shall adopt the following guiding principles:

(a) Universality: provide all workers with assistance in the event of job loss, by
temporarily replacing a portion of lost wages;

(b) Income smoothing: ensure that all workers will not face substantial reductions
in the consumption of goods for subsistence, especially during a period of
unemployment;

(c) Job search support: support displaced workers during job search while
minimizing the moral hazard effects of unemployment benefits on job search
efforts;


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(d) Efficiency: effectively utilize available funds and ensure fund viability at all
times:

(e) Progressivity: premium contributions will be based on ability to pay, as benefits
will be based on earnings as of the time of involuntary separation; and

(f) Social solidarity: a whole-of-nation approach will be taken to attain the policy
goals of this Act, including risk-sharing among workers with different
employment status and a pro-active role of government in providing social
protection for workers.

SECTION 4. General Objectives. - This Act seeks to:

(a) Provide all workers in the Philippines with a mechanism to protect them from
the risk of income loss and consequently, consumption reduction when one is
involuntarily separated from a job, and to provide support for job search;

(b) Create the National Unemployment Insurance Program (hereafter referred to
as the “Program") to serve as the means to assist workers during an episode
of unemployment:

(c) Establish the Philippine Job Insurance Corporation (PhilJobs, hereafter referred
to as the “Corporation") that will administer the Program and ensure its
continued long-term effectivity and viability.

Chapter II. Definition of Terms

SECTION 5. Definition of Terms. - For purposes of this Act, these terms are defined
as follows:

(a) Board - refers to the Board of Directors of the Corporation;

(b) Contribution - the amount payable to the Fund by the government, member,
and employer in accordance with Section 9 of this Act:

(c) Employee - includes any person who performs services for an employer in
which either both mental or physical efforts are used and who receives
compensation for such services; where there is an employer-employee
relationship; Provided, That a self-employed worker shall be both the employee
and employer at the same time;

(d) Employer - any person, natural or juridical, domestic or foreign, who carries on
in the Philippines any trade, business, industry, undertaking, or activity of any
kind and uses the services of another person who under his or her orders as
regards the employment. For purposes of this Act, employer includes national
government agencies, political subdivisions, local government units, branches,
instrumentalities, and government owned and controlled corporations;

(e) Eligible employee - any member as defined herein who lost his or her gainful
occupation through no fault of his or her own, is able to available to work, is
actively seeking work, and has paid the minimum number of contributions as
provided for in Section 15 (b) of this Act

in


Omen k eK

0)

Formal sector employees - workers with specific working hours and regular
wages, wherein the worker's job is assured. These workers are employed by
national government agencies, instrumentalities or government owned and
controlled corporations or private sector enterprises and their employment is
subject to standard labor legislation, taxation, socia! protection or entitlement to
certain employment benefits;

(g) Gainful occupation - any productive activity that provides an employee as

defined herein with income;

(h) Informal sector workers - those whose employment is not subject to standard

(

@

labor legislation, taxation, social protection or entitlement to certain employment
benefits such as but not limited to advance notice of dismissal, severance pay,
paid annual or sick leave, for reasons, such as but not limited to, the worker or
his or her job are undeclared; the job is causal or of a limited short duration; the
hours of work or wage are below a certain threshold; or the employer is an
unregistered enterprise;

Involuntary separation - separation of a worker from employment or pre-
termination of a contract of employment without his or her consent and without
cause by the worker, for reasons including but not limited to installation of labor-
saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment; disease as ground for termination;
and termination by employee, as provided for by Articles 283, 284, and 285 of
the Labor Code of the Philippines, or abolition of office or position or other
similar cases for government employees occupying plantilla positions,
respectively, or separation due to significant economic downturn or natural or
human-induced calamities/disasters.

In the case of probationary employees, pre-termination of contract by the
employer for reason/s other than the failure to meet the regularization
standards, as indicated in the employment contract, is not considered
involuntary separation under this Act, except in the case of significant economic
downturn or closure of the employer's business;

Member - any worker who is an existing and current member of the Government
Service Insurance System (GSIS) or the Social Security System (SSS) upon
the effectivity of this Act or any worker who is not a member of the same but
shall register with the Program. Member registration can either be compulsory
or voluntary;

(i). Compulsory member - refers to any formal sector employee, receiving
compensation while in the service of an employer as defined herein,
whether the premiums have been paid successively or intermittently
Any member separated from employment and any member who
becomes self-employed may opt to continue paying contributions as a
voluntary member,

(i). Voluntary member - includes informal sector workers, self-employed,
and previous compulsory members who have become self-employed.

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Voluntary members become compulsory members once they are
employed by employers as defined herein;
(k) Program Manager - refers to Interim Program Manager as provided in Section
8 of this Act or the Corporation as provided in Section 18 of this Act;
(1) Unemployment insurance Benefits Payments - benefits in the form of monthly
cash payments as provided for in Section 16 of this Act.

Chapter Ill. The National Unemployment Insurance Program

SECTION 6. Establishment of the Program. - There is hereby created a National
Unemployment Insurance Program which shall provide assistance to workers during
periods of unemployment to ensure that consumption levels are not substantially
reduced and that sufficient resources are available for job search or alternative means
of livelihood.

SECTION 7. Coverage. - The program shall cover all employees as defined in Section
5 of this Act. All SSS and GSIS members are automatically covered by the Program.
Workers who are neither SSS nor GSIS members, including but not limited to, workers
in the informal sector shall be encouraged to join the Program through innovative
approaches to be undertaken by the Program Manager, including information
campaigns and the provision of incentives.

SSS and GSIS shall transfer membership data to the Program Manager upon
execution of a data sharing agreement in compliance with the requirements of the
Data Privacy Act of 2012

Each member shall be assigned a unique PhilJobs number. For this purpose, the
membership data from the SSS and GSIS shall be used for verification purposes of
members.

The Corporation shall incorporate in their identification systems and databases the
PhilSys Number of covered individuais as provided in Section 6 of the Philippine
Identification System Act.

SECTION 8. Interim Program Manager. - The SSS shall manage the Program until
five (5) years after the effectivity of this Act, or until such a time when the Program has
demonstrated financial viability, whichever is earlier.

As Interim Program Manager, the SSS shall perform the powers and functions in
Section 20 of this Act until such time that the Program is transferred to the Corporation.

SECTION 9. Contributions. - It shall be compulsory for the national government,
members and employers to contribute to the Fund in accordance with a reasonable,
equitable and progressive contribution schedule, to be determined by the Program
Manager on the basis of applicable actuarial studies and in accordance with the
following guideline.

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The national government, employers, and employees shall equally share compulsory
premium contributions.

The risk-rated premium computations shail take into account factors such as: (i) the
probability of job loss, (ji) salary level, (ii) the program administration costs, and (iv)
type of employment, as follows:

(a) Formal sector employees, regardless of tenure status, shall pay monthly
contributions based on a contribution schedule to be actuarially determined by
the Program Manager: Provided, that their monthly contributions shall not
exceed one and one-half percent (1.5%) of their respective monthly salaries;

(b) Contributions from self-employed employees shall be based primarily on their
reported earnings; their monthly contributions shall not, however, exceed one
and one-half percent (1.5%) of their estimated actual net monthly income for
the preceding year,

(c) Contributions made by informal sector workers for the first year of membership
shall be lower than the minimum contributions set for formally employed
workers, as a form of incentive to formalize their employment.

A cap for maximum premium contributions shail be set by the Program Manager, to
be actuarially determined.

For the first year of Program implementation, the rate of monthly contribution is as
follows:

‘Salary Private Employees ——Soierninart Employees —
Level Monthly: “Monthly Monthly: ‘Monthiy Worthiy | Monthiy ‘Monthly | Monthly
i Contrbution | Government | Employer Employee Controuton | Government | Employer | Employee
Rate Share| Share | Share Rate ‘Share| Share| Share
Upte Wi2of qi2of | aot | ai2ef | TA2eF qit2 of) Wizof | 112 of
125.000 | 135% ase | asm | 45 | t35m | ase | asm | asm
pesos | |
1 Of basic Of basic Of basic Of basic Of basic OF Of basic ‘Ofbasic |
cy | pay | poy | oy | pay bay pay pay |
Greater | 1398 465 465 455 7395} 465 465 465)
than pesos pesos: pesos: pesos pesos pesos: pesos: peso |
125,00 |
pesos _ | _

Unemployment insurance benefits under existing SSS and GSIS programs shall be
integrated with the Program created under this Act. SSS and GSIS shall continue the
provision of unemployment insurance benefits to classes of workers that are not
covered by this Act.

SECTION 10. Duty to Contribute and Remit to the Unemployment Insurance Fund. -
Premium contributions to the Fund shall be remitted by employers within ten (10) days
from the end of each month. The member's employer shall contribute one-third (1/3)
of each premium contribution at no cost to the member, and shall withhold one-third
(1/3) of the premium contribution from the member's monthly compensation. The
employer's obligation to remit to the Fund shall begin on the member's first month of

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employment. The government's share of total contributions shall likewise be released
to the Fund within ten (10) days from the end of each month

The employer shall include in its annual appropriation the necessary amounts for its
share of contributions indicated above.

SECTION 11. Incentives for Job Search. - In determining the structure of premium
contributions and benefits, the Program Manager shall introduce mechanisms that
optimize incentives for job search, including but not limited to, the granting of additional
cash allowances if job search is completed prior to 90 days after involuntary separation
from work and the establishment of mechanisms for the monitoring of job search by
displaced workers.

SECTION 12. Endowment Fund. - To provide a source for the initial funding of the
Program under the administration of the Interim Program Manager, there is hereby
established an Endowment Fund which shall be self-sustaining and shall subsequently
consist of premium contributions, investment revenues, donations, bequests, grants
and loans from domestic and/or foreign sources, government subsidy appropriations
and other income accruing from the operations of the Program. For the initial
‘organizational and operational requirements of the Program, there is hereby
appropriated out of any fund in the National Treasury or other sources not otherwise
appropriated the sum of Thirty Billion Pesos (P30,000,000,000.00).

The Endowment Fund shall also serve as a subsidy for workers and economic stimulus
during the period of economic downturn caused by the COVID-19 pandemic. The
Program Manager shall determine the initiation of charging of premium contributions
to employers and employees, on the basis of general economic and labor market
conditions

All program administration costs to be incurred by the Interim Program Manager shalt
be charged against this Endowment Fund.

At the end of the first fiscal year of the Program's implementation, all funds remaining
in the Endowment Fund shall be transferred to the Reserve Fund and shall be utilized
in accordance with Section 14 of this Act.

SECTION 13. Unemployment Insurance Fund. - An Unemployment Insurance Fund
(‘Fund’) will be created for purposes of financing the unemployment insurance
benefits and the administration of the Program as provided in this Act.

SECTION 14. Reserve Fund. - To ensure that the Program has the capacity to provide
sufficient unemployment insurance benefits during periods of unexpectedly high
unemployment levels caused by general economic downturn, national disasters, or
such other crises of massive scale, the Program shall, on an annual basis, set aside
a portion of its funds as reserve funds, Provided, That a ceiling on reserve funds shall
be actuarially determined, taking into consideration the need to provide for

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extraordinary payments in the short- and long-run, Provided, further, That the balance
of the Endowment Fund at the time of the creation of the Corporation shall form part
of the Reserve Fund, Provided, further, That whenever there are Unemployment
Insurance Fund balances at the end of the Corporation's fiscal year, either whenever
premium contributions exceed unemployment insurance benefits or whenever there
are unutilized portions of the reserved funds, the Program's benefits shall be increased
in amounts, expanded in scope, or member contributions decreased prospectively in
order to adjust expenditures or revenues to meet the required ceiling for reserve funds,
Provided, further, That a portion of the reserve fund shall be set aside for purposes of
short-term investments to earn an average annual income at prevailing rates of
interest. The portion of reserve funds for investment purposes shall be known as the
“Investment Reserve Fund” which shail be invested in any or all of the following:

(a) In bonds, securities, promissory notes or other evidence of indebtedness of the
Government of the Philippines, or in bonds, securities, promissory notes, or
other evidence of indebtedness to which the full faith, credit and unconditional
guarantee of the Government of the Philippines is pledged: Provided, that at
least fifteen percent (15%) of the investment reserve fund shall be invested for
these purposes;

(b) In bonds, securities, promissory notes or other evidence of indebtedness of the
Government of the Philippines, or any of its agencies or instrumentalities 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 Corporation shall
have priority over the revenues of the projects: Provided, finally, That such
investments shall not exceed thirty percent (30%) of the Investment Reserve
Fund;

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

(d) In bonds, securities, deposits, promissory notes or other evidence of
indebtedness of any, bank doing business in the Philippines and in good
standing with the BSP to finance loans to private corporations doing business
in the Philippines, including schools, hospitals, small-and-medium scale
industries, cooperatives and nongovernmental organizations, in which case the
collaterals or securities shall be assigned to the Corporation, under such terms.
and conditions as the Board 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 BSP: Provided, finally, That such

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investments shall not exceed forty percent (40%) of the Investment Reserve
Fund;

(e) 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 facilities:
Provided, That such investments shall not exceed ten percent (10%) of the
Investment Reserve Fund;

In real estate property, including shares of stocks involving real estate property,
and investments secured by first mortgages on real estate property, and
investments secured by first mortgages on real estate or other collaterals
acceptable to the Corporation: Provided, That such projects and investments
shall, in the determination of the Board, redound to the benefit of the
Corporation, its members, as well as the general public: Provided, further, That
investment in real estate property and joint ventures including shares of stocks
involving real estate property, shall not exceed ten percent (10%) of the
Investment Reserve Fund: Provided, finally, That investments in other income
earning projects and investments secured by first mortgages or other collaterals
shall not exceed 25% of the Investment Reserve Fund;

(g) 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 of its
securities and that during each of any three (3) including the last two (2) of the
five (5) fiscal years next preceding the date of acquisition by the Corporation of
‘such bonds, debentures or other evidence of indebtedness, the net earnings 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, further, That such investments shall not
exceed forty percent (40%) of the Investment Reserve Fund;

(h) In preferred or common shares of stocks listed or to be listed in the stock

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exchange and other securities trading markets or options or warrants to such
stock or, subject to prior approval of the BSP, such other risk management
instruments of any prime or solvent corporation or financial instititution created
or existing under the laws of the Philippines with proven track record of
profitability over the last three (3) years and payment of dividends at least once
over the same period: Provided, That such investments shall not exceed forty
percent (40%) 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 forty percent (40%) 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
first year which shall be increased by one percent (1%) of each succeeding
year, but in no case shall it exceed fifteen percent (15%) of the Investment
Reserve Fund;

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() In foreign currency deposits or investment-grade rate foreign currency-
denominated debts, prime and nonspeculative equities, and other BSP
approved financial instruments or other assets issued in accordance with the
existing laws 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 or assets are issued: Provided,
further, That the issuing company has proven track record of profitability over
the last three (3) years and 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 which shall be increased
by one percent (1%) for each succeeding year, but in no case shall it exceed
fifteen percent (15%) of the Investment Reserve Fund;

(k) In loans secured by such collaterals like cash, pensions, government securities
or guarantees of multilateral institutions including loans to pensioners:
Provided, That such investments shall not exceed thirty percent (30%) of the
Investment Reserve Fund; and

() In other BSP approved investment instruments with the same intrinsic quality
as those enumerated in paragraphs (a) to (k) hereof, subject to the policies and
guidelines which the Board may formulate.

No portion of the Reserve Fund or income thereof shall accrue to the General fund of
the National Government or to any of its agencies or instrumentalities, 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:

(a) 60% in private securities;

(b) 5% in housing;

(c) 30% in real estate related investments;

(d) 30% in government financial institutions and corporations;

(e) 15% in any particular industry;

(f) 7.5% in foreign-currency denominated investments;

(g) 5% in private-sponsored infrastructure projects without guarantee;
(h) 5% in private and government sponsored projects with guarantee;
(i) 5% in private and government sponsored infrastructure projects

SECTION 15. Eligibility. - A worker shall be eligible for unemployment benefits under
the Program if they meet the following requirements:

(a) The worker is a “member” as defined under Section 5 (j) of this Act;

(b) The member has paid at least 6 monthly contributions in the 12-month period
prior to separation from work;

(c) The member was involuntarily separated from employment as defined in

Section 5(i) of this Act;
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(d) The member has undergone job counselling provided by the Program or by its
accredited partners, and has signed an agreement with the Corporation to
‘commence active job search, the compliance of which will be determined and
monitored by the Corporation: and

(e) The member has submitted an affidavit duly signed and notarized indicating
availability and willingness to work at any time after the filing of claims for
unemployment benefits.

SECTION 16. Unemployment Insurance Benefit Payments. - Unemployment
insurance benefits amounting to eighty percent (80%) of the member's basic monthly
pay at their last employment, shall be paid to the eligible worker on the 30" day of
unemployment. A second and third payment of equivalent amounts shall be given on
the 60 and 90" day of unemployment, respectively, as applicable, Provided that
monthly benefits per beneficiary shall not to exceed the cap of one hundred thousand
pesos (P100,000.00), subject to regular review by the Program Manager, based on
actuarial studies, Provided, further, That unemployment insurance benefit payments
shall cease upon the completion of the job search, or 90 days after involuntary
separation from employment, whichever is earlier, Provided, further, That the Program
Manager is authorized to provide incentives for the completion of job search prior to
90 days after the involuntary separation from employment, Provided, further, That the
Program Manager is authorized to adjust the amount of benefits defined in this Section
‘on the basis of labor market conditions and as validated by actuarial studies pursuant
to Section 19 (e) of this Act, Provided, finally, That sufficient consultation with the
Department of Labor and Employment and labor groups is conducted prior to any such
adjustment.

SECTION 17. Government-provided Unemployment Benefits. - In addition to
unemployment insurance benefit payments as defined in Section 5 of this Act, the
Program shall facilitate the provision of additional unemployment benefits, at no
additional cost to members:

(2) Training or re-tooling programs by TESDA;

(b) Job search assistance, including the provision of localized information on job
market opportunities, job matching, and identification of education and training
opportunities by Public Employment Service Offices;

(c) Other training or re-tooling programs or job search assistance services

accredited by the Corporation.

The Corporation shall enter into agreements with the relevant government agencies
or private entities to ensure the effective and efficient provision of training and re-
tooling programs and other forms of job search assistance for unemployed members
to improve their chances for reemployment.

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The Program shall provide members with a training allowance to cover the cost of
attending their chosen training program, including training fees and transportation,
subject to the member's compliance with training program requirements.

The Corporation shall include in its annual appropriation a provision for training
allowance of members.

Chapter IV. The Philippine Job Insurance Corporation

SECTION 18. Establishment of the Corporation. - There is hereby created a Philippine
Job Insurance Corporation, which shall manage and administer the Program and its
funds at such point in time that the fund viability has been established, not later than
5 years after the effectivity of the Act. In the discharge of its mandated responsibilities
under this Act, the Corporation shall function and operate as an independent and
accountable government-owned and controlled corporation within the corporate
governance standards and principles of Republic Act No. 10149, except as may be
otherwise provided herein.

SECTION 19. Powers and Functions. - The Corporation shall have the following
powers and functions:

(a) To administer the National Unemployment Insurance Program according to the
provisions of this Act:

(b) To formulate, adopt, amend, and/or rescind such rules and regulations as may
be necessary to carry out the overall objectives of the Program and the other
provisions of this Act;

(c) Receive compiaints, institute investigations, facilitate or enable settlement of
complaints through the use of alternative dispute resolution processes,
adjudicate, award indemnity on matters affecting any PhilJobs member. That in
resolving any complaint or investigation (except where amicable settlement is
reached by the parties), the Board shall act as a collegial body. However, the
Chairperson shall only vote in case of a tie.

(d) To formulate and implement guidelines to determine contribution, benefits, and
disbursement arrangements, among others, in order to effectively implement
the objectives of this Act, Provided, That the Program may have different
contributions and benefits that are proportionately calculated, and which must
be fair, equitable, and actuarially sound and viable;

(e) To conduct continuing actuarial and statistical studies and valuations to
determine the financial condition of the Program, and to take into consideration
such studies and valuations in the determination and readjustment of benefits,
contributions, premium rates, among others;

(f) To authorize cooperatives registered with the Cooperative Development
Authority or associations registered with the appropriate government agency to
act as collection agents with respect to Program members, Provided, That the

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Corporation shall accredit the cooperative or association, Provided, further,
That the person authorized to collect are bonded;

(g) To approve restructuring proposals for the payment of due but unremitted
contributions under such terms and conditions as it may be prescribe;

(h) Any law to the contrary notwithstanding, to condone, enter into a compromise,
or release, in whole or in part, such penalties imposed upon delinquent
contributions regardless of the amount involved under such valid terms and
conditions it may be prescribe through rules and regulations when the financial
position of the employer or worker demonstrates a clear inability to pay the
assessed delinquency arising from economic crisis, serious business losses or
financial reverses, or resulting from natural calamity or man-made disaster
without fault on the part of the employer or worker, Provided, That the
Corporation shall institute a condonation of penalties of delinquent employers
or workers under Republic Act No. 10361, subject to such rules and regulations
it may provide;

To determine that the powers under his provision are reasonably exercised, the
Corporation shall submit to the Office of the President, the Senate, and the
House of Representatives an annual report on the exercise of said powers
under this provision, stating the following facts, among others: names and
addresses of those whose penalty delinquencies have been subjected to
compromise or condonation, amount involved, amount compromised or
condoned, underlying reasons and justifications for compromise or
condonation;
To collect, deposit, invest, administer, and disburse the Unemployment
Insurance Fund in accordance with the provisions of this Act;
To submit to the President of the Philippines and to both Houses of Congress
its Annual Report which shall contain the status of the Fund, its total collections,
disbursements, reserves, average cost to eligible workers, unemployment
statistics, any requests for additional appropriation, and other data pertinent to
the implementation of the Program, and publish as synopsis of such report in
at least two (2) newspapers of general circulation and on its website;

(k) To require the Chief Actuary to submit a valuation report on the Program every
two (2) years, or more frequently as may be necessary, and to undertake the
necessary actuarial studies and calculations concerning adjustment in benefits,
contributions, among others;

(I) To organize its office, fix the compensation of and appoint personal as may be
deemed necessary and upon the recommendation of the president of the
Corporation;

(m)To enter into agreements or contracts for such service and aid as may be
needed for the proper, efficient, and stable administration of the Program,
including but not limited to partnerships with public and private entities for the
efficient delivery of job counselling, skills training, and job placement services,
among others;

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(n) To receive and manage grants, donations, and other forms of assistance;

(0) To sue and be sued in court;

(p) To adopt or approve the annual and supplemental budget of receipts and
expenditures including salaries and allowances of the Corporation's personnel,
against all funds available to the Corporation under this Act, and to authorize
such capital and operating expenditures and disbursement of the Program as
may be necessary and proper for the effective management and operation of
the Program;

(q) To set up its accounting system and provide the necessary personnel therefor;

(1) To enter into the necessary agreements with existing insurance programs or
any other entity, enterprise, corporation, or partnership for the benefit of
members transferring between systems;

(s) To perform such other acts as it may deem appropriate for the proper
implementation and enforcement of this Act.

SECTION 20. Board of Directors. - The Corporation shall be governed by a Board of
Directors hereinafter referred to as the Board, composed of the following

(a) Secretary of Labor and Employment, as the ex officio Chairperson.

() SSS President and Chief Executive Officer as Vice Chairperson,

(c) Director General of the National Economic and Development Authority, as ex
officio member,

(d) Six (6) appointive members, three (3) of whom shall represent employers’
groups, and three (3) shall represent labor groups, all of whom shall be
appointed by the President

All those in the Board shail be on known competence, probity, integrity and recognized
expertise in any of the field of insurance, social security, investment, finance,
economics, management, law, actuarial science, or similar fields, with at least ten (10)
years of managerial or leadership experience. The six (6) members representing
workers and employer groups shall be chosen from among the nominees of
employees and employers’ organization respectively, as endorsed by the Governance
Commission for GOCCs following the fit and proper rule and standards on integrity,
experience, education, training, and competence. The term of office of the regular
appointive members of the Board shall be three (3) years, which can be extended for
another term of three (3) years, Provided, That the terms for the first six (6) appointive
members shall be one (1), two (2), and three (3) years for every two (2) Directors,
respectively, notwithstanding Section 17 of the GCG Law, Provided, further, That they
shall continue to hold office until their successors shall have been appointed and duly
qualified. All vacancies prior to the expiration of the term shall be filled for the
remaining unexpired term only.

SECTION 21. Staffing. - The extent and size of the Corporation shall take into account
the size of the Program membership, functionai distribution, workload, span of control,
type, and variety of skills required. The Corporation's staffing structure should promote

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focused use of limited resources on core functions and program structure. In the
creation of the staffing structure, the Board shall:

(a) Determine the number of positions required based on the size of the Program
membership, functions, and program structure of the Corporation;

(b) Determine the skills and competencies required to perform the core functions;

(c) Observe an optimal ratio between technical and administrative positions; and

(d) Determine the extent of functions that can be efficiently performed by
outsourced services.

SECTION 22. Settlement of Disputes. - Any dispute arising under this Act with respect
to contributions, penalties, benefits, and any other matter related thereto shall be
cognizable by the Board, and any case filed with respect hereto shall be heard by the
Board and decided within the period provided for under Republic Act No. 1103 (Ease
of Doing Business and Efficient Government Service Delivery Act of 2018) after the
submission of the evidence. The filing, determination and settlement of disputes shall
be governed by the rules and regulations promulgated by the Board.

Any decision of the Board in the absence of an appeal therefrom as herein provided
shall become final and executory after fifteen (15) days from receipt of notice of
decision, and judicial review thereof shall be permitted only after any party claiming to
be aggrieved thereby has exhausted his remedies before the Board. The Board shall
be deemed to be a party to any judicial action involving any such decisions, and may
be represented by an attorney employed by the Board, or when requested by the
Board, by the Solicitor General or any public prosecutor.

SECTION 23. Appeals. - Appeals from any decision of the Board shall be governed
by Rules 43 and 45 of the 1997 Rules of Civil Procedure. The appeal shall not stay
the execution of the decision unless ordered by the Board, Court of Appeals or by the
‘Supreme Court and the Appeal shall be without prejudice to the special civil action of
certiorari when proper.

SECTION 24. Execution of Decision. - When no appeal is perfected and there is no
order to stay by the Board, Court of Appeals or by the Supreme Court, any decision of
the Board shall be enforced and executed in the same manner as decisions of the
Regional Trial Court. For this purpose, the Board shall have the power to issue to the
city or provincial or its appointed sheriff such writs of execution as may be necessary
for the enforcement of such decision, and any person who shall fail or refuse to comply
with such decision, writ or process after being required to do so, shall, upon application
by the Board, be punished for contempt.

SECTION 25. Exemption from Tax, Legal Process and Lien and Government
Guarantee. - It is hereby declared to be the policy of the State that the actuarial
solvency of the funds of the Program shall be preserved and maintained at all times
and that contribution rates necessary to sustain the benefits under this Act shall be

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kept as low as possible in order not to burden the members and their employers. Taxes
imposed tend to impair the actuarial solvency of its funds and increase the contribution
rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding any
laws to the contrary, the Corporation, its assets, revenues including all accruals
thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges,
or duties of all kinds. These exemptions shail continue unless expressly and
specifically revoked and any assessment against the Corporation as of the approval
of this Act are hereby considered paid. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered ineffective and
without legal force and effect.

Moreover, these exemptions shall not be affected by subsequent laws to the contrary
unless this section is expressly, specifically and categorically revoked or repealed by
law and a provision is enacted to substitute or replace the exemption referred to herein
as an essential factor to maintain or protect the solvency of the fund, notwithstanding
and independently of the guaranty of the national government to secure such solvency
or liability.

The funds and/or properties referred to herein as well as the benefits, sums or monies
corresponding to the benefits under this Act shall be exempt from attachment,
garnishment, execution, levy or other processes issued by the courts, quasi-judicial
agencies or administrative bodies including Commission on Audit (COA)
disallowances and from all financial obligations of the members, including his
pecuniary accountability arising from or caused or occasioned by his exercise or
performance of his official functions or duties, or incurred relative to or in connection
with his position or work except when his monetary liability, contractual or otherwise,
is in favor of the Corporation

Further, the benefits prescribed in this Act shall not be diminished and to guarantee
said benefits the Government of the Republic of the Philippines accepts general
responsibility for the solvency of the Corporation.

Chapter V. Appropriations

SECTION 26. Appropriations. - An appropriation of Thirty Billion pesos
(P30,000,000,000.00) is hereby appropriated for the SSS as Interim Program
Manager, as the amount necessary for the creation of the Endowment Fund as
provided for in Section 12. Subsequently, the funds necessary for the continuous and
effective operation of the Program shall be included in the General Appropriations Act
(GAA), including the national government's share in the premium contributions and
funds for the provision of allowances for training programs and job search assistance.

Chapter VI. Penal Provisions

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SECTION 27. - The Program Manager or responsible officer of the Corporation who
fails or refuses to comply with the provisions of this Act or with its implementing rules
and regulations shall be punished by a fine not less than fifty thousand pesos (P
50,000.00) nor more than two hundred thousand pesos (P200,000.00), or by
imprisonment of not less than six (6) years and one day to twelve (12) years, or both,
at the discretion of the court.

SECTION 28. - The Program Manager or responsible officer of the Corporation who
takes or misappropriates the contribution for the Fund or permits another person to
take, misappropriate or use said contribution through consent, abandonment or
negligence shall be punished by a fine not less than fifty thousand pesos (P 50,000.00)
nor more than two hundred thousand pesos (P200,000.00), or by imprisonment of not
less than six (6) years and one day to twelve (12) years, or both, at the discretion of
the court.

SECTION 29. - Any employer who after deducting the monthly contribution of
members, fails to remit the same to the Corporation within the period prescribe in this
Act shall been presumed to have taken the same shall suffer the penalties provided in
Article 315 of the Revised Penal Code.

SECTION 30. - The heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including government-owned
or controlled corporations and government financial institutions, and the personnel of
such offices who are involved in the collection contributions who shall fail, refuse or
delay the payment, turnover, remittance or delivery of such accounts, upon conviction
by final judgement, suffer the penalties of imprisonment of not less than one (1) year
nor more than five (5) years and a fine of not less than fifty thousand pesos
(P50,000.00) nor more than two hundred thousand pesos (P200,000.00), and in
addition shall suffer absolute perpetual disqualification from holding public office and
from practicing any profession or calling licensed by the government.

The officers and/or personnel referred in this section shall be liable not only criminally
but also civilly to the member concerned in the form of damages as provided for in the
Civil Code of the Philippines.

SECTION 31. - The officers and the personnel of private companies who are involved
in the collection contributions who shall fail, refuse or delay the payment, turnover,
remittance or delivery of such accounts, upon conviction by final judgement, suffer the
penalties of imprisonment of not less than one (1) year nor more than five (5) years
and a fine of not less than fifty thousand pesos (P50,000.00) nor more than two
hundred thousand pesos (P200,000.00) and shall also be civilly liable to the member
concerned in the form of damages provided for in the Civil Code of the Philippines.

Chapter VII. Miscellaneous Provisions

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SECTION 32. Oversight Provision. - Congress shail conduct a regular review of the
Program, which shall entail a systemic evaluation of the Program's performance and
impact. Every two years, an independent review shall be undertaken by an expert
third-party, at a cost to be shouldered by the Program, and whose results shall be
submitted to the Committees of the Senate and the House of Representatives which
have legislative jurisdiction over the Program

SECTION 33. Implementing Rules and Regulations. - Within forty five (45) days from
the effectivity of this Act, the SSS as Interim Program Manager shall formulate the
tules and regulations necessary for the implementation of this Act, in consultation with
the DOLE and NEDA.

SECTION 34. Information Campaign. - An intensive public information campaign shall
be undertaken by the SSS prior to the implementation of the rules and regulations of
this Act.

SECTION 35. Separability Clause. - If any provision of this Act is declared
unconstitutional or invalid, the remainder of the provisions thereof not affected shall
remain in force and effect.

SECTION 36. Repealing Clause. - All laws, executive orders, administrative rules and
regulations or parts thereof which are inconsistent with the provisions of this Act are
hereby amended, modified, or repealed accordingly

SECTION 37. Effectivity Clause. - This Act shall take effect immediately upon its
publication in a newspaper of generai circulation or in the Official Gazette.

Approved,