EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S. No. 
1010
o! tt?  
■TtniT
*19 SEP-4 P2«9
Introduced by Senator Manuel "Lito" M. Lapid 
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AN ACT
IMPOSING SUFFER PENALTIES FOR THE NON-REMITTANCE OF 
MANDATORY GOVERNMENT CONTRIBUTIONS
EXPLANATORY NOTE
Article II, Section 18 of the 1987 Constitution recognizes the role of labor as a 
primary social economic force and mandates that the State shall protect the rights of 
workers and promote their welfare. Pursuant to this State Policy, laws have been 
enacted that requires employers to deduct certain amounts from the salaries and 
wages of workers as their mandatory contributions to social welfare programs. These 
are the deductions required under the Social Security Law, the Universal Health Care 
Law and the Home Development Mutual Fund or Pag-IBIG (Pagtutulungan sa 
Kinabukasan: Ikaw, Bangko, Industria at Gobyerno) Fund.
Despite the mandatory nature of these contributions, it is common knowledge 
that many employees especially in blue collar jobs are being defrauded by their 
employers who deduct yet fail to remit the same to the government agencies 
concerned. Our unknowing workers only discover these malicious schemes by the time 
that their claim for benefits or loan applications are denied because of delinquency, 
non-registration or non-remittance.
The statistics reveal the grim reality.
Based on a recent report of PhilHealth, it recorded a total of 17,699 employers 
which are non-remitting and/or non-reporting as of December 20171. The Pag-IBIG
1 https://vAvw.philhealth.gov.ph/partners/employers/NonRemitting_NonReportingEmployers 
122017.pdf


Fund is not spared from this fraudulent scheme. Evidence of this is the implementation 
of the Penalty Condonation Program to encourage delinquent employers to settle their 
obligations relating to non-remittance and/or non-registration of employees. Since its 
launch, almost 6,100 employers of the condonation program resulting to the collection 
of P260 million in monthly savings for over 194,000 employees who were previously 
deprived of their benefits2. On the part of SSS, the agency just recently implemented 
the Contribution Penalty Condonation Program to allow delinquent employers to settle 
the unpaid premiums of their employees. But despite this program, there are still more 
than 115,000 delinquent employers who have not yet availed of the program3.
This deplorable pattern of neglect and non-compliance with the law 
necessitates a stiffer regime of punitive measures against errant employers. This bill 
proposes life imprisonment as the punishment for non-remittance of government- 
mandated contributions that constitutes as economic sabotage as defined herein, i.e. 
when carried out by a syndicate consisting of three or more persons or committed in 
large-scale against three or more persons, whether individually or as a group. For 
simple non-remittance, the penalty imposable is reclusion temporal to reclusion 
perpetua. This will thereby make this crime as a non-bailable offense.
Thus, early passage of this bill is earnestly sought.
M. LAPID
MANU
Senator
2 https://pia.gov.ph/news/articles/l 022095
3 https://www.pna.gov.ph/articles/1073373


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
S E N A T E
o( 
^ r.-'a rp
*19 SEP-4 P2«9
S. No. 1010
Introduced by Senator Manuel "Lito" M. Lapid
AN ACT
IMPOSING STIFFER PENALTIES FOR THE NON-REMITTANCE OF 
MANDATORY GOVERNMENT CONTRIBUTIONS
Be it enacted by the Senate and House o f Representatives o f the Philippines 
in Congress assembled:
1 
SECTION 1. Declaration o f Policy. -  It is hereby declared as a policy of the
2 
State to protect the rights and welfare of workers from the fraudulent and malicious
3 
non-remittance of the deductions to their salary and wages committed by their
4 
employers.
5 
Sec. 2. Simple Non-Remittance. -  Any employer who, after deducting the
6 
monthly contributions, collections, or loan amortizations from his employee's
7 
compensation as required under Republic Act No. 9679 or the Home Development
8 
Mutual Fund (Pag-IBIG) Law of 2009, Republic Act No. 11223 or the Universal
9 
Health Care Act, and Republic Act No. 11199 or the Social Security Act of 2018, fails
10 
to remit said deductions to the Pag-IBIG, PhilHealth or SSS, as the case may be,
11 
within thirty (30) days from the date they became due, shall be presumed to have
12 
misappropriated such contributions, collections or loan amortizations and shall suffer
13 
the penalty of reclusion temporal.


1 
Sec. 3. Non-Remittance as Economic Sabotage. - The crime of non-remittance
2 
constitutes economic sabotage if committed by a syndicate or in large-scale. It is
3 
deemed committed by a syndicate if carried out by three or more persons conspiring
4 
or confederating with one another. It is deemed committed in large-scale if
5 
committed against three or more persons, whether individually or as a group.
6 
The imposable penalty for the crime of non-remittance as economic sabotage
7 
shall be reclusion perpetua.
8 
Sec. 4. - Separability Clause. - Should any provision of this Act or the
9 
application thereof to any person or circumstance be held invalid, the other
10 
provisions or sections of this Act shall not be affected thereby.
11 
Sec. 5. - Repealing Clause. -  Section 25 of Republic Act No. 9679, Section 38
12 
(d) (1) of Republic Act No. 11223 and Section 28 (h) of Republic Act No. 11199 are
13 
hereby amended or modified accordingly. All laws, decrees, executive orders, rules
14 
and regulations or parts thereof which are inconsistent with this Act are hereby
15 
repealed, amended or modified accordingly.
16 
Sec. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days
17 
following its publication in the Official Gazette or in at least two (2) newspapers of
18 
general circulation.
19 
Approved,