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Health and Financial Wellness

Government Benefits
That Will Help You in ‘Adulting’

The government provides Filipinos social welfare services through the Social Security System (SSS), the Government Service Insurance System (GSIS), the Home Development Mutual Fund (Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth). To ensure that everyone has access to these services, employers and employees are required by law to contribute to these agencies through salary deductions as specified in the  Philippine Labor Code.

Filipinos who are not formally employed in the private or public sector may apply as voluntary members provided that they qualify to the membership requirements to avail the benefits as well. While you are required to regularly pay your contribution to these social services, you might as well know the benefits that you can avail.

Social Security System (SSS)

SSS is a social insurance program that aims to provide protection to its members and beneficiaries, while GSIS serves as the counterpart social insurance program for those who work in government. SSS members can avail of maternity, sickness, disability, retirement, funeral and death benefits. SSS also allows qualified members to take up salary, housing, business, educational loans.

The SSS contribution is 11% of an employee’s monthly salary1. The employer is required to shoulder 7.37% of the total 11% contribution, while the remaining 3.63% is shouldered by the employee. Based on the SSS contribution schedule, the minimum salary credit is 1,000, while the maximum is 20,000. Thus, the minimum contribution per month could range from ₱120.00 to ₱2,400.00 depending on the person’s salary.

To illustrate, an average employee earns ₱31,253.332 monthly. In this case, the monthly salary credit is 16,000, which is the maximum amount. The employer is required to shoulder ₱1,178.70 and ₱581.30 will be deducted from the employee’s salary every month. For voluntary members, they may choose a comfortable monthly contribution, but they will shoulder the entire 11% of their reported monthly income.

Home Development Mutual Fund (Pag-IBIG Fund)

The HDMF, commonly known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya, Gobyerno) Fund, was established to provide a national savings program and an affordable house financing for Filipinos. Aside from housing programs, it also offers savings program and multi-purpose loans that qualified members can avail.

Pag-IBIG fund has a fixed monthly contribution of ₱200.00. For employed individuals, ₱100.00 will be shouldered by the employer, while the remaining ₱100.00 will be deducted to the monthly salary of the employee.

Philippine Health Insurance Corporation (PhilHealth)

PhilHealth implements the National Health Insurance Program that aims to provide Filipinos with financial assistance and access to affordable health services. It covers hospital costs, subsidy for room and boarding, medicine, and professional services.

The compensation of the employee has a corresponding salary base which will be the basis of the PhilHealth contribution3. The employer is required to shoulder half of the contribution and the remaining 50% will be deducted monthly to the salary of the employee. The minimum salary base is ₱10,000 and the maximum is ₱50,000, which is equivalent to the minimum contribution of ₱275.00 and the maximum is ₱1,375.00 per month.

To illustrate, an average employee earns ₱31,253.334 monthly. Base on the PhilHealth contribution schedule, the monthly salary grade based on the PhilHealth contribution table is 31,000. The total monthly contribution of the employee is ₱775.00 to PhilHealth. The employer will shoulder ₱387.50 Pesos and the remaining ₱387.50 will be deducted monthly from the employee’s salary.

Maximizing the Government Benefits

Membership to SSS, PhilHealth, and Pag-IBIG surely helps a lot especially in times of emergencies. Most people take it for granted until they see the need for it.  Here are some tips to make the most out of your contributions to these government benefits:

  1. Be informed.

Know more about how these government benefits can work for you. Aside from their usual benefit options, these agencies from time to time come up with new programs that may serve your needs. Most of the information you need are available over the web so they are easily accessible. It is best if you also know if you are already eligible to avail of any programs or benefits from these government agencies. You can visit the nearest branch in your area and consult any of their representative to know more about the details of your accounts.

  1. Regularly pay your monthly contribution.

Paying your monthly contribution is much easier if you are an employee because your contributions are automatically deducted from your monthly salary. But for voluntary members, there are multiple ways to pay for your contributions. You may pay directly to the government office near you, through accredited payment centers, or through banks. Missing out on your contributions may prevent you from availing benefits these government agencies have to offer when you need them. 

  1. Pay the maximum contribution.

Most of these government services offer options to increase your monthly contribution. If your budget allows you, it is best to choose the maximum amount of monthly contribution so that you can also enjoy your benefits.

  1. Pay loans, avail loan restructuring program

If you have existing loans with these government agencies, you may choose to pay your loans, preferably in advance, or avail of a loan restructuring program to avoid interests and to make your loan settlement more manageable by choosing a longer payment period. 

  1. Avail voluntary savings programs

Both SSS and Pag-IBIG offer voluntary savings programs for its members. Enroll in the voluntary savings programs available to supplement your benefits with these government agencies.

Are these government benefits enough?

The services and benefits from SSS, PhilHealth and Pag-IBIG are just part of the social safety net provided by the government. As such, the basic purpose of these agencies is to allow people access to economic or social support from government so that they can attain or remain above the minimum standard of living”.

To assess whether these government benefits are enough greatly depends on your financial goal. It is beneficial to have a better understanding of how social safety nets such as the services offered by SSS, PhilHealth, and Pag-IBIG work. In most cases, these benefits only serve as a supplement just to get by.

For retirement, some people count on the SSS pension to be the sole source of their retirement income. The maximum basic monthly pension a retiree can receive is ₱10,900 provided that he or she has at least 30 years of credit service. 

With the rising cost of living and additional expenses to maintain good health as people age, the maximum pension provided by SSS may not be enough to cover the costs of medical care, maintenance medicines, and basic living expenses. 

Aside from preparing for retirement,  if owning a house is part of your adulting goals, you could avail of a housing loan from Pag-IBIG. 

A qualified Pag-IBIG member could get up to ₱6 Million for a home loan. The amount could be enough if you plan on getting a property in the province where property rates are considerably lower. In urban areas like Quezon City, properties could cost as much as ₱9,792,519 Million. This means that if you’re looking to procure a property in an urban area, you would definitely need more than just the maximum loanable amount provided by Pag-IBIG.

Your adulting goals may get tangled in safety nets

Goals allow a person to foresee and prepare for a future that he or she desires. Ideally, a person would set high, yet realistic and achievable goals for one’s self. With this, depending solely on government benefits may be setting someone’s adulting goals to the minimum. 

To be financially capable to support a relatively comfortable retirement, fund the purchase of a house, or to prepare for eventualities such as medical emergencies, you have to create additional fund sources on top of the benefits offered by the government. There are many ways to achieve this, but having a financial plan that matches your financial goals is a good start.

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Sources:

[1] Department of Budget and Management Circular Letter No. 2019-8. https://www.dbm.gov.ph/wp-content/uploads/Issuances/2019/Circular%20Letter/CIRCULAR-LETTER-NO-2019-8.pdf

[2] Average salary in Manila. Data is based from https://www.payscale.com/research/PH/Location=Manila/Salary 

[3] Data from https://www.philhealth.gov.ph/partners/employers/contri_tbl.html 

[4] Average salary in Manila. Data is based from https://www.payscale.com/research/PH/Location=Manila/Salary