Compendium of Right To Food Laws in The Philippines - Vol. II - Part 2

Food Accessibility Laws 01
COMPENDIUM OF
RIGHT TO FOOD LAWS
IN THE PHILIPPINES
Volume II
Food Accessibility
Laws
Part 2
National Food Coalition

91 Madasalin Street, Sikatuna Village,
Quezon City
02 COMPENDIUM OF RTF LAWS
Published by: National Food Coalition

91 Madasalin Street, Sikatuna Village
Diliman, Quezon City
Tel. No (02) 351-7553
Fax. No. (02) 436-3593
Lay-out: Ramon T. Ayco, Sr.

Set in Janson Text LT Std, pt. 12
Printed in the Philippines

Republic of the Philippines

Congress of the Philippines
Metro Manila
Eighth Congress
Republic Act No. 6971 November 22, 1990

AN ACT TO ENCOURAGE PRODUCTIVITY
AND MAINTAIN INDUSTRIAL PEACE BY
PROVIDING INCENTIVES TO BOTH LABOR
AND CAPITAL
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 as the

Productivity Incentives Act of 1990.
Section 2. Declaration of Policy.- It is the declared
policy of the State to encourage higher
levels of productivity, maintain industrial
peace and harmony and promote the
principle of shared responsibility in the
relations between workers and employers,
recognizing the right of labor to its just share
in the fruits of production and the right of
business enterprises to reasonable returns on
investments and to expansion and growth,
and accordingly to provide corresponding
incentives to both labor and capital for
undertaking voluntary programs to ensure
greater sharing by the workers in the fruits
of their labor.
Section 3. Coverage.- This Act shall apply to all business

enterprises with or without existing and duly
recognized or certified labor organizations,
including government-owned and controlled
corporations performing proprietary functions.
It shall cover all employees and workers
including casual, regular, supervisory and
managerial employees.
Section 4. Definition of Terms.- As used in this Act:
a) Business Enterprise refers to industrial,
agricultural, or agro-industrial
establishments engaged in the production
manufacturing, processing, repacking,
or assembly of goods, including service-
oriented enterprises, duly certified as such
by appropriate government agencies.
b) Labor-Management Committee refers to
a negotiating body in a business enterprise
composed of the representatives of labor
and management created to establish
a productivity incentives program, and
to settle disputes arising therefrom in
accordance with Section 9 hereof.
c) Productivity Incentives Program
refers to a formal agreement established
by the labor-management committee
containing a process that will promote
gainful employment, improve working
conditions and result in increased
productivity, including cost savings,
whereby the employees are granted salary
bonuses proportionate to increases in

current productivity over the average
for the preceding three (3) consecutive
years. The agreement shall be ratified by
at least a majority of the employees who
have rendered at least six (6) months of
continuous service.
Section 5. Labor-Management Committee.-
a) A business enterprise or its employees,
through their authorized representatives,
may initiate the formation of a labor-
management committee that shall
be composed of an equal number of
representatives from the management
and from the rank-and-file employees:
Provided, That both management and
labor shall have equal voting rights:
Provided, further, That at the request of
any party to the negotiation, the National
Wages and Productivity Commission
of the Department of Labor and
Employment shall provide the necessary
studies, technical information and
assistance, and expert advice to enable
the parties to conclude productivity
agreements.
b) In business enterprises with duly recognized
or certified labor organizations, the
representatives of labor shall be those
designated by the collective bargaining
agent(s) of the bargaining unit(s).
c) In business enterprises without

duly recognized or certified labor
organizations, the representatives
of labor shall be elected by at least a
majority of all rank-and-file employees
who have rendered at least six (6)
months of continuous service.
Section 6. Productivity Incentives Program.-
a) The productivity incentives program
shall contain provisions for the manner
of sharing and the factors in determining
productivity bonuses: Provided, That
the productivity bonuses granted to
labor under this program shall not be
less than half of the percentage increase
in the productivity of the business
enterprise.
b) Productivity agreements reached
by the parties as provided in this Act
supplement existing collective bargaining
agreements.
c) If, during the existence of the
productivity incentives program or
agreement, the employees will join
or form a union, such program or
agreement may, in addition to the
terms and conditions agreed upon by
labor and management, be integrated
in the collective bargaining agreement
that may be entered into between
them.
Section 7. Benefits and Tax Incentives.-

(a) Subject to the provisions of Section 6
hereof, a business enterprise which adopts
a productivity incentives program, duly
and mutually agreed upon by parties to
the labor-management committee, shall
be granted a special deduction from gross
income equivalent to fifty percent (50%)
of the total productivity bonuses given
to employees under the program over
and above the total allowable ordinary
and necessary business deductions for
said bonuses under the National Internal
Revenue Code, as amended.
b) Grants for manpower training and special
studies given to rank-and-file employees
pursuant to a program prepared by the
labor-management committee for the
development of skills identified as necessary
by the appropriate government agencies
shall also entitle the business enterprise
to a special deduction from gross income
equivalent to fifty per cent (50%) of the
total grants over and above the allowable
ordinary and necessary business deductions
for said grants under the National Internal
c) Any strike or lockout arising from any
violation of the productivity incentives
program shall suspend the effectivity
thereof pending settlement of such strike
or lockout: Provided, That the business

enterprise shall not be deemed to have
forfeited any tax incentives accrued prior
to the date of occurrence of such strike
or lockout, and the workers shall not be
required to reimburse the productivity
bonuses already granted to them under
the productivity incentives program.
Likewise, bonuses which have already
accrued before the strike or lockout shall
be paid the workers within six (6) months
from their accrual.
d) Bonuses provided for under the
productivity incentives program shall
be given to the employees not later than
every six (6) months from the start of such
program over and above existing bonuses
granted by the business enterprise and by
law: Provided, That the said bonuses shall
not be deemed as salary increases due the
employees and workers.
e) The special deductions from gross income
provided for herein shall be allowed
starting the next taxable year after the
effectivity of this Act.
Section 8. Notification. - A business enterprise which
adopts a productivity incentives program
shall submit copies of the same to the National
Wages and Productivity Commission and
to the Bureau of Internal Revenue for their
information and record.
Section 9. Disputes and Grievances.- Whenever disputes,

grievances, or other matters arise from the
interpretation or implementation of the
productivity incentives program, the labor-
management committee shall meet to resolve
the dispute, and may seek the assistance of the
National Conciliation and Mediation Board
of the Department of Labor and Employment
for such purpose. Any dispute which remains
unresolved within twenty (20) days from the
time of its submission to the labor-management
committee shall be submitted for voluntary
arbitration in line with the pertinent of the
Labor Code, as amended.
The productivity incentives program
shall include the name(s) of the voluntary
arbitrator or panel of voluntary arbitrators
previously chosen and agreed upon by the
labor-management committee.
Section 10. Rule Making Power.- The Secretary of Labor and
Employment and the Secretary of Finance, after
due notice and hearing, shall jointly promulgate
and issue within six (6) months from the effectivity
of this Act such rules and regulations as are
necessary to carry out the provisions hereof.
Section 11. Penalty.- Any person who shall make any
fraudulent claim under this Act, regardless of
whether or not a tax benefit has been granted,
shall upon conviction be punished with
imprisonment of not less than six (6) months
but not more than one (1) year or a fine of not
less than two thousand pesos (P2,000.00) but

not more than six thousand pesos (P6,000.00),
or both, at the discretion of the Court, without
prejudice to prosecution for any other acts
punishable under existing laws.
In case of partnerships or corporations, the
penalty shall be imposed upon the officer(s)
or employee(s) who knowingly approved,
authorized or ratified the filing of the fraudulent
claim, and other persons responsible therefor.
Section 12. Non-Diminution of Benefits.- Nothing in this
Act shall be construed to diminish or reduce
any benefits and other privileges enjoyed
by the workers under existing laws, decrees,
executive orders, company policy or practice,
or any agreement or contract between the
employer and employees.
Section 13. Separability Clause.- If any provision of this
Act is held invalid, any other provision not so
affected shall continue to be valid and effective.
Section 14. Repealing Clause.- Any law, presidential decree,
executive order, and letter of instruction, or any
part thereof, which is inconsistent with any of
the provisions of this Act is hereby repealed or
amended accordingly.
Section 15. Effectivity Clause.- This Act shall take effect
fifteen (15) days after its publication in the
Official Gazette or in at least two (2) national
newspapers of general circulation.
Approved:November 22, 1990

RULES IMPLEMENTING
REPUBLIC ACT NO. 6971
Pursuant to the authority granted to the Secretary

of Labor and Employment and the Secretary of
Finance under Section 10 of Republic Act No. 6971,
otherwise known as the Productivity Incentives
Act of 1990, the following rules and regulations are
hereby promulgated and issued for the guidance of all
concerned.
RULE I
Preliminary Provisions
Section 1. Title. These Rules shall be known as the

Rules Implementing RA No. 6971.
Section 2. Construction. These Rules shall be
literally construed to carry out the objectives
of RA 6971 to encourage higher levels of
productivity, maintain industrial peace and
harmony and promote the principle of shared
responsibility in the relations between workers
and employers, recognizing the right of labor
to its just share in the fruits of production
and the right of business enterprises to
reasonable returns on investments and to
expansion and growth, and accordingly to
provide corresponding incentives to both labor
and capital for undertaking voluntary programs
to ensure greater sharing by the workers in the
fruits of their labor.
Section 3. Definition of Terms. As used in these Rules:

(a) Act refers to Republic Act No. 6971;
(b) DOLE refers to the Department of
Labor and Employment;
(c) DOF refers to the Department of
Finance;
(d) NWPC refers to the National Wages
and Productivity Commission;
(e) RTWPB refers to the Regional
Tripartite Wages and Productivity Board;
(f) NCMB refers to the National
Conciliation and Mediation Board;
(g) NMYC refers to the National
Manpower and Youth Council;
(h) RMDO refers to the Regional
Manpower Development Office Under
the NMYC;
(i) BIR refers to the Bureau of Internal
Revenue:
(j) Business Enterprises refers to
industrial, agricultural, or agro-industrial
establishment engaged in the production,
manufacturing, processing, repacking,
or assembly of goods, including service-
oriented enterprises;
(k) Service-oriented Enterprises refers to
establishments other than agricultural,
industrial and agro-industrial establishments;
(l) Managerial Employee refers to an
employee who is vested with power or
prerogatives to lay down and execute
management policies and/or to hire,

transfer, suspend, lay- off, recall, discharge,
assign or discipline employees;
(m) Supervisory Employee refers to
an employee who, in the interest of
the employer, effectively recommends
managerial actions if the exercise of such
authority is not merely routinary or
clerical in nature but requires the use of
independent judgment;
(n) Rank-and-file Employee refers to an
employee who does not fall under the
definition of managerial and supervisory
employee;
(o) Labor-Management Committee refers to
a cooperative/negotiating body in a business
enterprise composed of representatives of
labor and management created to establish
a productivity incentives program, and
to settle disputes arising therefrom in
accordance with Section 9 of the Act;
(p) Productivity refers to the relation of
output to input in physical and/or real
monetary terms;
(q) Output refers to products and services
expressed in physical and/or real
monetary terms;
(r) Input refers to resources such as labor, raw
materials, equipment, capital, and energy
used to produce output and expressed in
physical and/or real monetary terms;
(s) Productivity Incentives Program refers

to a formal agreement voluntarily
established by the labor-management
committee containing a productivity
improvement program that will promote
gainful employment, improve working
conditions, maintain industrial peace
and result in increased productivity,
including cost savings, as well as a
productivity gainsharing program
whereby the employees are granted
productivity bonuses;
(t) Bonuses refer to cash and/or non-cash
incentives given to employees, as agreed
by the parties under the Productivity
Incentives Program;
(u) Training refers to an organized activity
primarily designed for the systematic
development of attitude, knowledge,
skill, and behavior pattern required for
the adequate performance of a given job
or task conducted by a juridical/natural
person of persons;
(v) Special Studies refers to relevant and
specialized skills trainings acquired
abroad or locally in order to introduce
new skills identified as necessary by the
NMYC;
(w) Voluntary Arbitration refers to the
mode of settling labor-management
disputes by which the parties select a
competent, trained and impartial person

who shall decide on the merits of the case
and whose decision is final, executory and
unappealable; and
(x) Voluntary Arbitrator refers to any person
accredited by the NCMB as such, or
any person named or designated in the
collective bargaining agreement by the
parties to act as their voluntary arbitrator, or
one chosen, with or without the assistance
of the NCMB, pursuant to a selection
procedure agreed upon in the collective
bargaining agreement, or any official that
may be authorized by the DOLE Secretary
to act as voluntary arbitrator upon the
written request and agreement of the parties
to a dispute arising from the productivity
incentives agreement.
RULE II
Coverage
Section 1. Coverage. The Rules shall apply to:

(a) All business enterprises with or without
existing duly recognized or certified labor
organizations, including government-
owned and controlled corporation
performing proprietary functions.
(b) All employees and workers including
casual, regular, rank- and-file, supervisory
and managerial employees.
RULE III
Labor Management Committee
Section 1. Organization. A business enterprise and/

or its employees may initiate the formation
of a labor-management committee to
establish a productivity incentives program
in the enterprise.
At the request of any party, the NCMB or
its appropriate Regional Branch or any third
person chosen and agreed upon by both parties
shall provide assistance to enable the parties
to form a labor- management committee.
Section 2. Composition and Selection.
(a) Composition of the labor-management
committee.
The labor-management committee shall
be composed of an equal number of
representatives from the management
and rank-and-file employees.
(b) Selection of labor representatives.
In a business enterprise with
organizations, the labor representatives
to the labor- management committee
shall be those designated by the collective
bargaining agent(s) of the bargaining
unit(s). In a business enterprise without
organizations, the labor representatives
shall be elected by at least a majority of
all rank-and-file employees who have

rendered a minimum of six (6) months
continuous service.
Section 3. Voting Rights. Both management and labor
shall have equal voting rights.
Section 4. Effect on Existing Labor Management
Committees. A business enterprise with
existing labor-management committees
for other purposes may form a new labor-
management committee or use the existing
labor-management committee to establish
a productivity incentives program; provided
that the conditions stated in Sections 2 and 3
hereof and Section 1, Rule VII of these Rules
are met.
RULE IV
Productivity Incentives Program
Section 1. Objectives and Scope. The productivity

incentives program shall clearly state
its immediate and long term objectives
and the effects of such on the employees
welfare and the business enterprise as a
whole. It shall embody, in general terms,
an implementation plan and a summary of
strategies to be undertaken to attain such
objectives.
The productivity incentives program shall
specify the organizational units and functional
areas that will be covered by the program.
Section 2. Components. The productivity incentives

program shall be composed of the following:
(a) Productivity Improvement Program. The
productivity improvement program shall
include any intervention of scientific/
systematic process designed to increase
productivity of the various factor inputs such
as materials, labor, capital and energy. The
program may be geared towards improved
human resource management and effectivity
and efficient use of other resources, e.g.,
waste reduction, energy conservation and
maintenance improvement.
(b) Productivity Gainsharing Program. The
Productivity Gainsharing Program shall
specify an incentives system whereby
employees are given an equitable share
from gains brought about by improved
productivity. Business enterprises with
existing productivitygainsharing programs
may convert the same into a productivity
incentives program provided the conditions
contained herein are met.
(c) Manpower Trainings and Special Studies.
Any manpower training and special study
proposed by the labor- management
committee aimed at developing skills of
rank-and-file employees may be included
in the productivity incentives program. For
purposes of accreditation, such training and
studies shall specify the following:
1. Objective/s of training program

2. Type of training
3. Training schedule
4. Program of activities
5. Course content or syllabus
6. Budgetary allocation and cost
estimates for any or a combination of
the following cost items:
a) Training materials, books and
supplies;
b) Cost of raw materials and non-
depreciable tools to be consumed
or used during the training;
c) Honoraria of trainors and training
coordinators;
d) Travelling expenses of trainors,
coordinators, trainees and training
staff while away from home on
account of the training program;
e) Basic salary of trainees and training
staff while away from home on
account of the training program;
f) Tuition, registration or similar
fees to be paid to a training
institution;
g) Depreciation of training equipment,
facilities, and other fixed assets to be
used in the training program;
h) Other cost items such as snacks,
rental of venue, rental of equipment,
working cloths for trainees and
instructors, and certificates of

training but not to exceed 5% of
the total training cost.
7. Evaluation scheme for the proposed
training.
Section 3. Contents. The productivity incentives
program shall contain the following:
(a) Methods and Formulas to Measure
Productivity.
The productivity measures indicate the
total and/or partial relation between
outputs and inputs expressed in
physical and/or monetary terms. Some
of the generally accepted measures of
productivity which may be adopted by
the labor-management committee to
determine productivity gains and bonuses
are:
1) Value of Production Approach.
Total Value
Total Factor
of Output

Productivity = Total Cost
Partial Total Value of Output

Productivity = Cost of Specific
Factor Input where:
Total value of output = quantity x selling price
2) Value-Added Approach
Total Value-Added
Total Value Added

Productivity = Company Inputs where:
Total value-added = Total value of output
intermediate inputs;
Intermediate inputs = raw materials consumed,

energy and other inputs such as purchases and services
supplied by outside sources; and
Company inputs = those contributed by the company other
than intermediate inputs.
(b) Factors in Determining Productivity

Bonuses.
This refers to the factors to be considered in
measuring productivity gains as identified
by the labor-management committee.
These factors as well as the methods/
formulas to measure productivity agreed
upon by both parties shall form the bases in
determining the amount of the productivity
bonus for distribution.
(c) Manner of Sharing Productivity Bonuses.
The list of employees entitled to
productivity bonuses shall be drawn up,
including the method of sharing such
bonuses, the percentage share of each
employee and the period of distribution
of bonuses. Said list shall be updated

from time to time to reflect changes
in employment status like separation,
retirement, resignation, promotion and
hiring of new personnel.
(d) Names and Positions of the Labor-
Management Committee Representatives.
The terms of the representatives to the
labor-management committee, their
positions in the company, and their terms
of office as labor-management committee
representatives shall be specified.
(e) Names of Voluntary Arbitrators or Panel
of Voluntary Arbitrators.
The name of the voluntary arbitrator or
panel of voluntary arbitrators chosen and
agreed upon by the labor-management
committee shall be included in the
productivity incentives program.
(f) Other terms and Conditions of the
Productivity Incentives Program.
Other terms and conditions of the
program shall be specified, including
agreements on the renewal of the
productivity incentives program, the
number of labor and management
representatives, the process of electing
representatives and substitutes by both
parties, the provisions in case of declining
productivity, and other related terms and
conditions acceptable to both parties.
Section 4. Ratification. The productivity incentives

program shall be ratified in writing
by at least a majority of the covered
employees who have rendered a minimum
of six (6) months continuous service, within
sixty (60) days from the time of signing of
the agreement by the labor-management
committee.
Section 5. Submission to RTWPB. The ratified
productivity incentives program shall be
submitted in three (3) copies to the
appropriate RTWPB together with proof
of ratification, e.g., an affidavit stating
the number of covered employees and the
number of votes cast in favor of the program.
The RTWPB shall review said program
within sixty (60) calendar days from
receipt thereof to determine compliance
with these Rules. Where manpower trainings
and special studies are included in the
program, same shall be reviewed by the
appropriate RMDO.
Section 6. Notification of BIR. A business enterprise
shall submit a copy of the productivity
incentives program to the BIR for information
and record purposes.
Section 7. Amendments to the Productivity Incentives
Program. Any amendment to the
productivity incentives program shall be
deemed valid provided the requirements set
in Section 4 to 6 hereof are met.
Section 8. Technical Support in the Development of

Productivity Incentives Program. At the
request of any party, the NWPC or its
appropriate RTWPB shall provide the
necessary studies, technical information
and assistance, and expert advice to enable
the parties to conclude productivity
agreements.
RULE V
Productivity Bonuses
Section 1. Productivity Bonuses. Productivity bonuses

granted to labor under the productivity
incentives program may be in cash and/or
non-cash incentives, as agreed by the parties,
and shall not be less than half of the percentage
increase in the productivity of the business
enterprise over and above the average for
the preceding three (3) consecutive years;
provided, that for enterprises that have been
in operation for less than three (3) years, the
labor management committee therein may
agree on other base periods for determining
productivity increases.
Section 2. Frequency of Granting Productivity Bonuses.
The productivity bonuses over and
above the existing bonuses granted by the
business enterprise and by law shall be given
to employees not later than every six (6)
months from the start of the productivity
incentives program; provided that said

bonuses shall not be deemed as salary
increases due the employees and workers;
provided further than upon agreement by
both parties, payment of bonuses may be
deferred, but not longer than one year from
date payment of said bonuses are due.
RULE VI
Tax Incentives
Section 1. Rate of Deductions.

(a) Subject to the provisions of Section 7 of
the Act and Rule IV hereof, a business
enterprise which adopts a productivity
program, duly agreed upon by the
labor-management committee, shall
be granted a special deduction from
the gross income equivalent to fifty
percent (50%) of the total productivity
bonuses given to employees under
the program in addition to the total
allowable ordinary and necessary
business deductions for said bonuses
as provided for under the National
Internal Revenue Code, as amended.
(b) A business enterprise providing
manpower training and special
studies to rank-and-file employees as
accredited by the RMDO may avail of
the special deduction from gross income
equivalent to fifty (50%)percent of

the total grants for local trainings and
special studies given to employees
under the program in addition to
the allowable ordinary and necessary
business deductions for said grants
as provided for under the National
(c) For business enterprises deriving
income other than from within the
Philippines, which grant manpower
training abroad to rank-and-file
employees, the related expense
incurred in relation thereto, shall not be
deducted in full but shall be determined
on a ratable basis in accordance with
Revenue Regulations No. 16-86
implementing the National Internal
Revenue Code, as amended; provided
that such qualifies as ordinary and
necessary expenses.
Section 2. Period Considered for Tax Deduction. The
deductions provided for in the Act shall
be taken for the taxable year in which
the productivity bonus has been paid or
accrued or paid or incurred dependent
upon the method of accounting upon the
basis of which the income is computed,
unless in order to clearly reflect the
income, the deductions should be taken as
of a different period as provided for under
Section 39 of the National Internal

Section 3. Eligibility of Tax Incentives on Training
Grants. Within fifteen (15) calendar
days after completion of the training
program and/or special studies, the
business enterprise shall submit to the
appropriate RMDO a post-training report
stating whether the objectives of the
training program have been adequately
met, plus the official receipts of training
expenses. Upon submission of the post-
training report by the business enterprise,
the RMDO, within thirty (30) calendar
days, shall conduct a post-training
evaluation to determine the acquisition
of appropriate skills, knowledge and
behavior and shall issue to the business
enterprise the necessary Certificate of
Tax Eligibility.
Section 4. Requirements for Granting Tax Incentives.
The tax deductions stipulated in the Act may
be availed of by the business enterprise upon
filling the quarterly-final income tax return
accompanied with the pertinent supporting
documents.
Section 5. Effectivity of Tax Incentives. The special
deductions from gross income provided
for herein shall be allowed starting the
next taxable year after the effectivity of the
Act.
RULE VII
Disputed and Grievances
Section 1. Resolution.
(a) Whenever disputes, grievances or other
matters arise from the interpretation and
implementation of the program as ratified
by the parties, the labor-management
committee shall meet to resolve the dispute.
(b) The labor-management committee may seek
the assistance of the NCMB or its appropriate
Regional Branch for such purpose.
(c) Any dispute which remains unresolved within
twenty (20) calendar days from the time of
the submission to the labor- management
committee shall be submitted for voluntary
arbitration in line with the pertinent
provisions of the Labor Code, as amended.
RULE VIII
General Provisions
Section 1. Non-Diminution of Benefits. Nothing in these

Rules shall be construed to diminish or reduce any
benefits and other privileges enjoyed by the workers
under existing laws, decrees, executive orders,
company policies or practices or any agreement or
contract between the employer and the employees.
Section 2. Suspension of Benefits.
(a) Any strike or lockout arising from any
violation of the productivity incentives
program shall suspend the effectivity

thereof pending settlement of such
strike or lockouts; provided the business
enterprise shall not be deemed to have
forfeited any tax incentives accrued prior
to the date of occurrence of such strike
or lockout and the workers shall not be
required to reimburse the productivity
bonuses already granted to them under
the productivity incentives program.
(b) Bonuses which already accrued before the
strike or lockout shall be paid the workers
within six (6) months from their accrual.
Section 3. Effect of Productivity Incentives Program on
Collective Bargaining Agreements.
(a) The productivity agreements reached
by the parties as provided in the Act
shall supplement existing collective
bargaining agreements.
(b) If, during the existence of the productivity
incentives program or agreement, the
employers will join or form a union, such
program or agreement may, in addition to
the terms and conditions agreed upon by
labor and management, be integrated in
the collective bargaining agreement that
may be entered into between them.
Section 4. Penalty. Any person who will make any fraudulent
claim under the Act, regardless of whether or not
a tax incentive has been granted, shall upon
conviction be punished with imprisonment of not
less than six (6) months but not more than one (1)
year or a fine of not less than two thousand pesos
(P2,000) but not more than six thousand pesos
(P6,000), or both, at the discretion of the Court.
Such may also be penalized in accordance with
the governing provisions under Title X: Statutory
Offenses & Penalties of the National Internal
Revenue Code, as amended, without prejudice to
prosecution for any other acts punishable under
the existing laws.
In case of partnerships or corporations, the
penalty shall be imposed upon the officers or
employees who knowingly approved, authorized
or ratified the filing of the fraudulent claim,
and other persons responsible therefor.
Section 5. Separability Clause. If any provision of the
Act and these Rules is held invalid or
unconstitutional, any other provision not so
affected shall continue to be valid and effective.
Section 6. Repealing Clause. Any law, presidential
decree, executive order, letter of instruction,
and its rules and regulations, or any part
thereof, which is inconsistent with any of
the provisions of the Act and these Rules is
hereby repealed or amended accordingly.
Section 7. Effectivity Clause. These Rules shall
take effect upon publication in a national
newspaper of general circulation.
Done in the City of Manila, Republic of the Philippines,

this 4th day of June, 1991.
Republic Act No. 1161

June 18, 1954
AN ACT TO CREATE A SOCIAL SECURITY

SYSTEM PROVIDING SICKNESS,
UNEMPLOYMENT, RETIREMENT,
DISABILITY AND DEATH BENEFITS FOR
EMPLOYEES
Section 1. Short Title. This Act shall be known as the

Social Security Law (As amended by Sec.
1, P.D. No. 24, S-1972).
Section 2. Declaration of Policy. It is the policy
of the Republic of the Philippines to
establish, develop, promote and perfect a
sound and viable tax-exempt social security
service suitable to the needs of the people
throughout the Philippines which shall
provide to covered employees and their
families protection against the hazards of
disability, sickness, old age and death, with
a view to promoting their well-being in the
spirit of social justice. (As amended by Sec. 1,
R.A. 1792 and Sec. 2, P.D. No. 24, S-1972).
A. Administration
Section 3. Social Security System

(a) To carry out the purposes of this Act, the
Social Security System with principal
place of business in Metro Manila,
Philippines is hereby created. The SSS

shall be directed and controlled by a Social
Security Commission composed of the
Secretary of Labor and Employment, the
SSS Administrator and seven appointive
members: three of whom shall represent
the labor group, one of whom shall be a
woman; three, the management group,
one of whom shall be a woman; and, one,
the general public, to be appointed by the
President of the Philippines. The Chairman
of the Commission shall be designated by
the President from among its members.
The term of the appointive members shall
be three years: Provided, That the terms
of the first six appointive members shall
be one, two and three years for every two
members, respectively.
All vacancies, except through the expiration
of the term, shall be filled for the unexpired
term only. The apppointive members of the
Commission shall receive one thousand five
hundred pesos per diem for each meeting
actually attended by them: Provided, That
no compensation shall be paid for more
than eight meetings a month. Members of
the Commission who hear cases pending
before the Commission, shall also receive
a per diem of one thousand five hundred
pesos. (As amended by Sec. 2, R.A. 1792,
R.A. 2658, Sec. 1, R.A. 4857; Sec. 1, Sec.
3, P.D. No. 24, S-1972; Sec. 1, P.D. No.

347, S-1973; Sec. 1, P.D. 735, S-1975; Sec.
1, P.D. No. 1202, S-1977; Sec. 1, E.O. No.
102, S-1986; and R.A. 7688)
(b) The general conduct of the operations
and management functions of the SSS
shall be vested in the Administrator who
shall serve as the chief executive officer
immediately responsible for carrying out
the program of the SSS and the policies
of the Commission. The administrator
shall be a person who has had previous
experience in technical and administrative
fields related to the purposes of this Act.
He shall be appointed by the President of
the Philippines and shall receive a salary
to be fixed by the Commission with the
approval of the President, payable from
the funds of the SSS. (As amended by Sec.
1, R.A. 2658; Sec. 3, P.D. No. 24, S-1972;
and Sec. 1, P.D. No. 735, S- 1975)
(c) The Commission, upon the recommendation
of the Administrator shall appoint an
actuary, and such other personnel as may be
deemed necessary; fix their compensation;
prescribe their duties and establish such
methods and procedures as may insure
the efficient, honest and economical
administration of the provisions and
purposes of this Act. Provided, however,
That the personnel of the SSS shall be
selected only from civil service eligibles

certified by the commissioner of civil
service and be subject to civil service
rules and regulations. (As amended by
Sec. 1, R.A. 2658 and Sec. 1, P.D. No.
735, S-1975)
Section 4. Powers and Duties of the Commission.
For the attainment of its main objectives
as set forth in section two hereof, the
Commission shall have the following
powers and duties:
(a) To adopt, amend and rescind, subject to
the approval of the President, such rules
and regulations as may be necessary to
carry out the provisions and purposes of
this Act.
(b) To submit annually not later than March
31, a public report to the President of the
Philippines covering its activities in the
administration and enforcement of this
Act during the preceding year including
information and recommendations on
broad policies for the development and
perfection of the program of the SSS.
(As amended by Sec. 2, P.D. No. 735,
S-1975)
(c) To require the Actuary to submit a
valuation report on the SSS benefit
program every five years, or more
frequently as may be necessary, and to
undertake the necessary actuarial studies
and calculations concerning increases

in benefits and the financial stability of
the SSS and to provide for the feasible
increases in benefits and the addition
of new ones under such rules and
regulations as the Commission may adopt
subject to the approval of the President:
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. (As amended by
Sec. 1, P.D. No. 1636, S-1979 and Sec. 2,
E.O. No. 102, S-1986)
(d) To establish branches of the System
whenever and wherever it may be
expedient or necessary, and to inspect or
cause to be inspected periodically such
branches.
(e) To enter into agreements or contracts for
such service and aid, as may be needed
for the proper, efficient and stable
administration of the System.
(f) To adopt from time to time a budget
of expenditures including salaries of
personnel, against all funds available to
the System under this Act. (As amended
by Sec. 3, R.A. 1792)
(g) To set up its accounting system and
provide the necessary personnel therefor.
(As amended by Sec. 3, R.A. 1792)
(h) To require reports, compilations and

analyses of statistical and economic data
and to make investigations as may be
needed for the proper administration and
development of the System.
(i) To acquire property, real or personal, which
may be necessary or expedient for the
attainment of the purposes of this Act.
(j) To acquire, receive, or hold, by way of
purchase, expropriation or otherwise,
public or private property for the purpose
of undertaking housing projects preferably
for the benefit of low-salaried employees
and for the maintenance of hospitals and
institutions for the sick, aged and infirm
employees and immediate members of
their families. (As amended by Sec. 2, R.A.
2658 and Sec. 2., P.D. No. 735, S-1975)
(k) To sue and be sued in court.
(l) To perform such other acts as it may deem
appropriate for the proper enforcement of
this Act.
Section 5. Settlement of Disputes.
(a) Any dispute arising under this Act with
respect to coverage, benefits, contributions
and penalties thereon or any other matter
related thereto, shall be cognizable by
the Commission, and any case filed with
respect thereto shall be heard by the
Commission, or any of its members, or
by hearing officers duly authorized
by the Commission and decided within

twenty days after the submission of the
evidence. The filing, determination and
settlement of disputes shall be governed
by the rules and regulations promulgated
by the Commission. (As amended by Sec.
3, R.A. 2658; Sec. 2, R.A. 4857; and Sec.
3, P.D. No. 735, S-1975)
(b) Appeal to Courts. Any decision of the
Commission, in the absence of an appeal
therefrom as herein provided, shall become
final fifteen days after the date of notification,
and judicial review thereof shall be permitted
only after any party claiming to be aggrieved
thereby has exhausted his remedies before
the Commission. The Commission shall be
deemed to be a party to any judicial action
involving any such decision, and may be
represented by an attorney employed by the
Commission, or when requested by the
Commission, by the Solicitor General or
any fiscal.
(c) Court Review. The decision of the
Commission upon any disputed matter may
be received both upon the law and the facts
by the Court of Appeals. For the purpose
of such review the procedure concerning
appeals from the Court of First Instance
shall be followed as far as practicable and
consistent with the purposes of this Act.
Appeal from a decision of the Commission
must be taken within fifteen days from

notification of such decision. If the decision
of the Commission involves only questions
of law, the same shall be reviewed by the
Supreme Court. No appeal bond shall
be required. The case shall be heard
in a summary manner, and shall take
precedence over all cases, except that in the
Supreme Court, criminal cases wherein life
imprisonment or death has been imposed
by the trial court shall take precedence. No
appeal shall act as a supersedeas or a stay
of the order of the Commission, unless the
Commission itself, or the Court of Appeals
or the Supreme Court, shall so order.
(d) Execution of decisions Any decision or
award of the Commission after the same
has become final and executory shall be
enforced and executed in the same manner
as decisions of Courts of First Instance
and the Commission shall have the power
to issue to the City or provincial sheriff
or the sheriff whom it may appoint such
writs of execution as may be necessary for
the enforcement of such decision or award
and any person who shall fail or refuse to
comply with such decision, award, or writ,
after being required to do so shall, upon
application by the Commission, be punished
by the proper court for contempt. (As
amended by Sec. 4, P.D. No. 24, S-1972)
Section 6. Auditor and Counsel.

(a) The Commissioner on Auditor shall be
the ex-officio Auditor of the SSS. He or
his representative shall check and audit all
the accounts, funds and properties of the
SSS in the same manner and as frequently
as the accounts, funds and properties of
the government are checked and audited
under existing laws; and he shall have, as far
as practicable, the same powers and duties
as he has with respect to the checking and
auditing of public accounts, funds and
properties in general.
(b) The Secretary of Justice shall be the
ex-officio counsel of the SSS. He or his
representative shall act as legal adviser
and counsel thereof. (As amended by Sec.
4, P.D. No. 735, S-1975)
Section 7. Oaths, Witnesses, and Production of Records.
When authorized by the Commission, an official
or employee thereof shall have the power to
administer oath and affirmation, take depositions,
certify to official acts, and issue subpoena and
subpoena duces tecum to compel the attendance
of witnesses and the production of books, papers,
correspondence and other records deemed
necessary as evidence in connection with any
question arising under this Act. Any case of
contumacy shall be dealt with in accordance
with the provisions of section five hundred
eighty of the Administrative Code.
B. Definitions
Section 8. Terms Defined. For the purposes of this Act,

the following terms shall, unless the context
indicates otherwise, have the following
meanings:
(a) SSS The Social Security System
created by this Act. (As amended by Sec.
2, P.D. No. 1636, S-1979)
(b) Commission The Social Security
Commission as herein created.
(c) 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 is under his orders as regards the
employment, except the Government and
any of its political subdivisions, branches or
instrumentalities, including corporations
owned or controlled by the Government:
Provided, That a self-employed professional
shall be both employee and employer at the
same time. (As amended by Sec. 2, P.D. No.
1636, S-1979)
(d) Employee Any person who performs
services for an employer in which either or
both mental and physical efforts are used
and who receives compensation for such
services, where there is an employer-
employee relationship: Provided, That a
self-employed professional shall be both

employee and employer at the same time.
(As amended by Sec. 4, R.A. 2658 and Sec.
2, P.D. No. 1636, S-1979)
(e) Dependent The legitimate, legitimated
or legally adopted child who is unmarried,
not gainfully employed, and not over
twenty-one years of age, or over twenty-
one years of age, provided that he is
congenitally incapacitated and incapable
of self-support, physically or mentally; the
legitimate spouse dependent for support
upon the employee; and the legitimate
parents wholly dependent upon the covered
employee for regular support. (As amended
by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; and
Sec. 5, P.D. No. 735, S-1975)
(f) Compensation All actual remuneration
for employment, including the mandated
cost of living allowance, as well as the
cash value of any remuneration paid
in any medium other than cash except
that part of the remuneration in excess
of three thousand pesos received during
the month. (As amended by Sec. 4, R.A.
1792; Sec. 4 R.A. 2658; Sec. 5, P.D. No.
24, S-1972; and Sec. 3, E.O. No. 102,
S-1986)
(g) Monthly salary credit The
compensation base for contributions
and benefits as indicated in the schedule
in section eighteen of this Act. (As

amended by Sec. 4, R.A. 2658 and Sec. 5
P.D. No. 24, S-1972)
(h) Monthly The period from one end of
the last payroll period of the preceding
month to the end of the last payroll period
of the current month if compensation
is on hourly, daily or weekly basis; if on
any other basis, monthly shall mean a
period of one month.
(i) Contribution The amount paid to the
SSS by the employee and by his employer
in accordance with section eighteen of
this Act. (As amended by Sec. 5, P.D. No.
24, S-1972)
(j) Employment. Any service performed by
an employee for his employer, except
1. Agricultural labor when performed by
a share or leasehold tenant or worker
who is not paid any regular daily wage
or base pay and who does not work
for an uninterrupted period of at least
six months in a year; (As amended by
Sec. 4, R.A. 2658)
2. Domestic service in a private home;
3. Employment purely casual and not
for the purposes of occupation or
business of the employer;
4. Service performed by an individual in
the employ of his son, daughter, or
spouse, and service performed by a
child under the age of twenty-one

years in the employ of his parents;
5. Service performed on or in
connection with an alien vessel by
an employee if he is employed when
such vessel is outside the Philippines;
6. Service performed in the employ of
the Philippine Government or an
instrumentality or agency thereof;
7. Service performed in the employ of
a foreign government or international
organization, or their wholly-owned
instrumentality: Provided, however,
That his exemption notwithstanding,
any foreign government, international
organization, or their wholly-owned
instrumentality employing workers in
the Philippines or employing Filipinos
outside of the Philippines may 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. (As amended by

Sec. 1, R.A. 3839; Sec. 3, RA 4857;
and Sec. 5, P.D. No. 735, S-1975)
8. Such other services performed by
temporary employees who may
be excluded by regulation of the
Commission. Employees of bona
fide independent contractors shall
not be deemed employees of the
employer engaging the services of
said contractors. (As amended by Sec.
5, P.D. No. 735, S-1975)
(k) Beneficiaries The dependent
spouse until he remarries and
dependent children, who shall be the
primary beneficiaries. In their absence,
the dependent parents and, subject to
the restrictions imposed on dependent
children, the legitimate descendents
and illegitimate children who shall
be the secondary beneficiaries. In the
absence of any of the foregoing, any
other person designated by the covered
employee as secondary beneficiary. (As
amended by Sec. 4, R.A. 2658; Sec. 3,
R.A. 4857; Sec. 1, P.D. No. 177, S-1973;
and Sec. 5, P.D. No. 735, S-1975)
(l) Contingency The retirement, death,
permanent disability, injury or sickness
of the covered employee. (As amended
by Sec. 5, P.D. No. 735, S-1975)
(m) Average monthly salary credit The

result obtained by dividing the sum of
the monthly salary credits in the sixty-
month period immediately preceding the
semester of contingency by the number of
months of coverage in the same period, or
the result obtained by dividing the sum of
all the monthly salary credits paid prior to
the semester of contingency by the number
of calendar months of coverage in the same
period, whichever is greater: except where the
month of contingency falls within eighteen
months from the month of coverage, in which
case it is the result obtained by dividing the
sum of all monthly salary credits paid prior to
the month of contingency by the total number
of calendar months of coverage in the same
period: Provided, That the injury or sickness
which caused the disability shall be deemed
as the permanent disability for the purpose of
computing the average monthly salary credit.
(As amended by Sec. 3, R.A. 4857 and Sec. 5,
P.D. No. 735, S-1975)
(n) Average daily salary credit The result
obtained by dividing the sum of the six
highest monthly salary credits in the twelve-
semester of contingency by one hundred
eighty. (As amended by Sec. 3, R.A. 4857;
Sec. 5, P.D. No. 735, S-1975; and Sec. 3,
E.O. No. 102, S-1986)
(o) Semester A period of two consecutive

quarters ending in the quarter of
contingency. (As amended by Sec. 5, P.D.
No. 735, S-1975)
(p) Quarter A period of three consecutive
calendar months ending on the last day of
March, June, September and December.
(q) Replacement ratio The sum
of twenty per cent and the quotient
obtained by dividing three hundred
by the sum of three hundred forty and
the average monthly salary credit. (As
amended by Sec. 2, P.D. No. 1636,
S-1979)
(r) Credited years of service For a
member covered prior to January 1975,
nineteen hundred seventy five minus
the calendar year of coverage plus the
number of calendar years in which six
or more contributions have been paid
from January 1975 up to the calendar
year containing the semester prior to
the contingency. For a member covered
in or after January 1975, the number
of calendar years in which six or more
contributions have been paid from the
year of coverage up to the calendar year
containing the semester prior to the
contingency. (As amended by Sec. 2, P.D.
No. 1636, S-1979)
C. Scope of the System
Section 9. Compulsory coverage.

(a)
Coverage in the SSS shall be
compulsory upon all employees not
over sixty years of age and their
employers: Provided, That any benefit
already earned by employees under
private benefit plans existing at the
time of the approval of this Act shall
not be discontinued, reduced or
otherwise impaired: Provided, further,
That private plans which are existing
and in force at the time of compulsory
coverage shall be integrated with
the plan of the SSS in such a way
where the employers contribution
to his private plan is more that that
required of him in this Act he shall
pay to the SSS only the contribution
required of him and he shall continue
his contribution to such private plan
less his contribution to the SSS so
that the employers total contribution
to his private benefit plan and to the
Social Security System shall be the
same as his contribution to his private
benefit plan before the compulsory
coverage: Provided, further, That any
changes, adjustments, modifications,
eliminations or improvements in the
benefits to be available under the

remaining private plan, which may be
necessary to adopt by reason of the
reduced contribution thereto as a result
of the integration, shall be subject to
agreements between the employers
and employees concerned: Provided,
further, That the private benefit plan
which the employer shall continue for
his employees shall remain under the
employers management and control
unless there is an existing agreement
to the contrary: Provided, finally, That
nothing in this Act shall be construed as
a limitation on the right of employers
and employees to agree on and adopt
benefits which are over and above those
provided under this Act. (As amended
by Sec. 5, R.A. 1972; Sec. 5, R.A. 2658;
and Sec. 2, R.A. 3839)
(b) Filipinos recruited in the Philippines by
foreign-based employers for employment
abroad may be covered by the SSS on a
voluntary basis. (As amended by Sec. 2,
P.D. No. 177, S-1973 and Sec. 6, P.D. No.
735, S-1975)
Section 9-A. Compulsory Coverage of the Self-employed.
Coverage in the SSS shall also be compulsory
upon all self-employed persons earning
P1,800 or more per annum: Provided, That
the effectivity of coverage of certain groups
of self-employed shall be determined by the

Commission under such rules and regulations
it may prescribe: Provided, further, That the
effectivity of the coverage of the following
self-employed persons shall be in accordance
with section ten (b) hereof:
1. All self-employed professionals licensed by
the Professional Regulations Commission
or those licensed to practice law.
2. Partners and single proprietors of
businesses.
3. Actors and actresses, directors, scriptwriters
and news correspondents who do not fall
within the definition of the term employee
in section eight (d) of this Act.
4. Professionals athletes, coaches, trainers
licensed by the Games and Amusement
Board as well as jockeys and trainers
licensed by the Philippine Racing
Commission.
Unless otherwise specified herein, all
provisions of the SSS Law applicable to
covered employees shall also be applicable
to the covered self-employed persons. (As
Section 10. Effective Date of Coverage. Compulsory
coverage of the employer shall take effect
on the first day of his operation and that of
the employee on the day of his employment:
Provided, That the compulsory coverage
of self-employed persons referred to in
paragraphs (1) to (4) shall take effect

on the first day of January following the
calendar year they started the practice of
their profession or business operations but
in no case earlier than January 1, 1980. (As
amended by Sec. 6, R.A. 1972; Sec. 6, R.A.
2658; and Sec. 4, P.D. No. 1636, S-1979)
Section 11. Effect of Separation from Employment.
When an employee under compulsory
coverage is separated from employment,
his employers contribution on his account
and his obligation to pay contributions
arising from that employment shall cease
at the end of the month of separation, but
said employee shall be credited with all
contributions paid on his behalf and entitled
to benefits according to the provisions of
this Act. He may, however, continue to pay
the total contributions to maintain his right
to full benefit. (As amended by Sec. 4, R.A.
4857 and Sec. 7, P.D. No. 735, S-1975)
Section 11 - A. Effect of Interruption of Business or Professional
Income. If the self-employed realizes no
net professional or business income in any
calendar year, he shall not be required to
pay contributions for the succeeding year.
He may, however, be allowed to continue
paying contributions under the same rules
and regulations applicable to separated
covered employees. (As amended by Sec. 5,
P.D. No. 1636, S-1979)
D. Benefits
Section 12. Monthly Pension.

(a) The monthly pension shall be the sum
of the following:
1. The average monthly salary credit
multiplied by the replacement ratio; and
2. One and a half per cent of the
average monthly salary credit for
each credited year of service in
excess of ten years.
(b) The monthly pension shall in no case be
less than two hundred pesos nor paid in an
aggregate amount of less than sixty times
the monthly pension except to a secondary
beneficiary: Provided, That the monthly
pension of surviving pensioners as of
December 31, 1986 shall be increased by
twenty per cent. (As amended by Sec. 7, R.A.
1792; Sec. 7, R.A. 2658; Sec. 5, R.A. 4857;
Sec. 6, P.D. No. 24, S-1972; Sec. 3, P.D. No.
177, S-1973; Sec. 8, P.D. No. 735, S-1975;
Sec. 2, P.D. No. 1202, S-1977; Sec. 6, P.D.
No. 1636, S-1979; Sec. 1, E.O. No. 28,
S-1986; and Sec. 4, E.O. No. 102, S-1986)
Section 12 - A. Dependents Pension. The dependents
pension shall be equivalent to ten per cent
of the monthly pension for each dependent
child but not exceeding five, beginning with
the youngest and without substitution. (As
Section 12 - B.. Retirement Benefits.

(a) A covered employee who has paid at least
one hundred twenty monthly contributions
prior to the semester of retirement; and who
(1) has reached the age of sixty years and is
not receiving monthly compensation of at
least three hundred pesos or (2) has reached
the age of sixty-five years, shall be entitled for
as long as he lives to the monthly pension:
Provided, That his dependents born before
his retirement of a marriage subsisting when
he was fifty-seven years old shall be entitled
to the dependents pension. (As amended by
Sec. 4, P.D. No. 1202, S-1977)
(b) A covered member who is sixty years old
at retirement and who does not qualify
for pension benefits under paragraph (a)
above, shall be entitled to a lump sum
benefit equal to the total contributions
paid by him and on his behalf: Provided,
That he is separated from employment
and is not continuing payment of
contributions to the SSS on his own.
(c) The monthly pension shall be reduced
upon the re-employment of a retired
employee who is less than sixty-five years
old by an amount equivalent to one-half
his earnings over three hundred pesos. He
shall again be subject to section eighteen
and his employer to section nineteen
of this Act. (As amended by Sec. 7, R.A.
1792; Sec. 7, R.A. 2658; Sec. 6, P.D. No.

24, S-1972; Sec. 3, P.D. No. 177, S-1973;
Sec. 8, P.D. No. 735; S-1975; Sec. 4, P.D.
No. 1202, S-1977; and Sec. 7, P.D. No.
1636, S-1979)
(d) Upon the death of the retired employee
pensioner, his primary beneficiaries as
of the date of his retirement shall be
entitled to eighty per cent of the monthly
pension and his dependents to the
dependents pension: Provided, That if
he has no primary beneficiaries and he
dies within sixty months from the start
of his monthly pension, his secondary
beneficiaries shall be entitled to a lump
sum benefit equivalent to the bigger of (1)
twenty times the monthly pension or (2)
the difference of sixty times the monthly
pension and the total monthly pensions
paid by the SSS excluding the dependents
pension. (As amended by Sec. 7, P.D. No.
1636, S-1979 and E.O. No. 102, S-1986)
Section 13. Death Benefits. Upon the covered
employees death, his primary beneficiaries
shall be entitled to the monthly pension and
his dependents to the dependents pension:
Provided, That he has paid at least thirty-
six monthly contributions prior to the
semester of death: Provided, further, That
if the foregoing condition is not satisfied his
primary beneficiaries shall be entitled to a
lump sum benefit equivalent to thirty-five

times the monthly pension: Provided, further,
That if he has no primary beneficiaries, his
secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to twenty times
the monthly pension: Provided, however,
That the minimum death benefit shall not be
less than the total contributions paid by him
and his employer on his behalf nor less than
one thousand pesos: Provided, finally, That
the beneficiaries of the covered employee
who dies without having paid at least three
monthly contributions shall be entitled to
the minimum benefit. (As amended by Sec. 5,
P.D. No. 1202, S-1977 and Sec. 8, P.D. No.
1636, S-1979)
Section 13-A. Permanent disability benefits.
(a) Upon the covered employees permanent
total disability, if such disability occurs
after he had paid at least thirty-six monthly
contributions prior to the semester of
disability, he shall be entitled to the
monthly pension and his dependents to
the dependents Pension: Provided, That
if the disability occurs before he has paid
thirty-six monthly contributions prior
to the semester of disability, he shall be
entitled to a lump sum benefit equivalent
to thirty-five times the monthly pension:
Provided, further, That the minimum
disability benefit shall not be less than
the total contributions paid by him and

his employer on his behalf nor less than
one thousand pesos: Provided, further,
That a covered employee who becomes
permanently totally disabled without
having paid at least three monthly
contributions shall be entitled to the
minimum benefit: Provided, finally, That
a member who (1) received a lump sum
benefit and (2) is re-employed not earlier
than one year from date of his disability
shall again be subject to compulsory
coverage and considered a new member.
S-1977)
(b) The monthly pension shall be reduced
upon his re-employment by an amount
equivalent to one-half of his earnings
over three hundred pesos. The monthly
pension and dependents pension shall
be suspended upon his recovery from the
permanent total disability, or his failure to
present himself for examination at least
once a year upon notice by the SSS. (As
amended by Sec. 6, P.D. No. 1202, S-1977
and Sec. 9, P.D. No. 1636, S-1979)
(c) Upon the death of the permanent total
disability pensioner, his primary beneficiaries
as of the date of disability shall be entitled
to eighty per cent of the monthly pension
and his dependents to the dependents
pension: Provided, That if he has no primary

beneficiaries and he dies within sixty months
from the start of his monthly pension, his
secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to the bigger
of (1) twenty times the monthly pension
or (2) the difference of sixty times the
monthly pension and the total monthly
pensions paid by the SSS excluding the
dependents pension. (As amended by
Sec. 9, P.D. No. 1636, S-1979 and Sec. 6,
E.O. No. 102, S-1986)
(d) The following disabilities shall be
deemed permanent total:
1. Complete loss of sight of both eyes;
2. Loss of two limbs at or above
the ankle or wrists;
3. Permanent complete paralysis of two
limbs;
4. Brain injury resulting to incurable
imbecility or insanity; and,
5. Such cases as determined and
approved by the SSS. (As amended
by Sec. 9, P.D. No. 1636, S-1979)
(e) If the disability is permanent partial, and
such disability occurs before thirty-six
monthly contributions have been paid
prior to the semester of disability, the
benefit shall be such percentage of the
lump sum benefit described in the
preceding paragraph with due regard to
the degree of disability as the Commission

may determine. (As amended by Sec. 9,
P.D. No. 1636, S-1979)
(f) If the disability is permanent partial and
such disability occurs after thirty-six
monthly contributions have been paid
prior to the semester of disability, the
benefit shall be the monthly pension
for permanent total disability payable
not longer than the period designated
in the following schedule:
Complete and Number

permanent loss of use of of Months
One thumb 10
One index finger 8
One middle finger 6
One right finger 5
One little finger 3
One big toe 6
One hand 39
One arm 50
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 20
Sight of one eye 25

S-1975 and Sec. 9, P.D. No. 1636,
S-1979)
(g) The percentage degree of disability,
which is equivalent to the ratio that
the designated number of months of
compensability bears to seventy-five,
rounded to the next higher integer,
shall not be additive for distinct,
separate and unrelated permanent
partial disabilities, but shall be additive
for deteriorating and related permanent
partial disabilities, to a maximum
of one hundred per cent, in which
case the employee shall be deemed
as permanently totally disabled. (As
amended by Sec. 9, P.D. No. 1636,
S-1979)
Section 13-B. Funeral Benefit. A funeral grant of two
thousand pesos shall be paid to help defray
the cost of funeral expenses upon the death
of a covered member, permanently totally
disabled employee or retiree. (As amended
by Sec. 11, P.D. No. 735, S-1975; Sec. 2,
E.O. No. 28, S-1986; and Sec. 7, E.O. No.
102, S-1986)
Section 14. Sickness Benefit.
(a) A covered employee who has paid at
least three monthly contributions in
the twelve-month period immediately
preceding the semester of sickness
and is confined for more than three

days in a hospital or elsewhere with the
Commissions approval, shall, for each
day of compensable confinement or
fraction thereof, be paid by his employer,
or the SSS, if such person is unemployed,
an allowance equivalent to ninety per cent
of his average daily salary credit, subject
to the following conditions: (As amended
by Sec. 3, E.O. No. 28, S-1986)
(1) In no case shall the total amount of
such daily allowance be less than
seven pesos and fifty centavos nor
exceed seventy-five pesos nor paid
longer than one hundred twenty
days in one calendar year; nor shall
any unused portion of the one
hundred twenty days of sickness
benefit granted under this section
be carried forward and added to the
total number of compensable days
allowable in the subsequent year;
(As amended by Sec. 3, E.O. No. 28,
S-1986 and Sec. 8, E.O. No. 102,
S-1986)
(2) No employee shall be paid any
sickness benefit for more than two
hundred forty days on account of
the same confinement; and
(3) The employee shall notify his
employer of the fact of his sickness
or injury within five calendar days

after the start of his confinement
unless such confinement is in a
hospital or the employee became
sick or was injured while working or
within the premises of the employer
in which case notification to the
employer is not necessary: Provided,
That if the member is unemployed
he shall directly notify the SSS of
his confinement within five calendar
days after the start thereof unless
such confinement is in a hospital in
which case notification is also not
necessary: Provided, further, That in
cases where notification is necessary,
the confinement shall be deemed to
have started not earlier than the fifth
day immediately preceding the date
of notification. (As amended by Sec. 9,
R.A. 2658; Sec. 7, R.A. 4857; Sec. 8,
P.D. No. 24, S-1972; Sec. 12, P.D. No.
735, S-1975; and Sec. 10, P.D. No.
1636, S-1979)
(b) The compensable confinement shall
begin on the first day of sickness, and
the payment of such allowances shall be
promptly made by the employer every
regular payday or on the fifteenth and
last day of each month, and similarly
in the case of direct payment by the
SSS, for as long as such allowances are

due and payable: Provided, That such
allowance shall begin only after all sick
leaves of absence with full pay to the
credit of the employee shall have been
exhausted. (As amended by Sec. 9, R.A.
2658; Sec. 7, R.A. 4857; Sec. 8, P.D. No.
24, S-1972; Sec. 5, P.D. No. 177, S-1973;
and Sec. 14, P.D. No. 735, S-1975)
(c) One hundred per cent of the daily
benefits provided in the preceding
paragraph shall be reimbursed by the
SSS to said employer upon receipt of
satisfactory proof of such payment
and legality thereof: Provided, That
the employer has notified the SSS of
the confinement within five calendar
days after receipt of the notification
from the employee: Provided,
further, That if the notification to the
SSS is made by the employer beyond
five calendar days after receipt of
the notification from the employee,
said employer shall be reimbursed
only for each day of confinement
starting from the tenth calendar day
immediately preceding the date of
notification to the SSS: Provided,
finally, That the SSS shall reimburse
the employer or pay the unemployed
member only for confinement within
the one year period immediately

preceding the date the claim for
benefit or reimbursement is received
by the SSS, except confinement in a
hospital in which case the claim for
benefit or reimbursement must be
filed within one year from the last day
of confinement. (As amended by Sec.
9, R.A. 2658; Sec. 1, R.A. 4482; Sec.
7, R.A. 4857; and Sec. 8, P.D. No. 24,
S-1972)
(d) Where the employee has given the
required notification but the employer fails
to notify the SSS of the confinement or to
file the claim for reimbursement within the
period prescribed in this section resulting
in the reduction of the benefit or denial of
the claim such employer shall have no
right to recover the corresponding daily
allowance he advanced to the employee
as required in this section. (As amended
by Sec. 8, P.D. No. 24, S-1972 and Sec.
12, P.D. No. 735, S-1972)
(e) The claim of reimbursement shall be
adjudicated by the SSS within a period
of two months from receipt thereof;
Provided, That should no payment be
received by the employer within one
month after the period prescribed herein
for adjudication the reimbursement
shall thereafter earn simple interest of
one per cent per month until paid. (As

(f) The provisions regarding the notification
required of the covered employee and
the employer as well as the period
within which the claim for benefit or
reimbursement may be filed shall apply
to all claims filed with the SSS beginning
January 1, 1973. (As amended by Sec. 8,
P.D. No. 24, S-1972)
Section 14-A. Maternity Leave Benefit. A covered female
employee who has paid at least three monthly
maternity contributions in the twelve-
month period preceding the semester of her
childbirth, abortion, or miscarriage and who
is currently employed shall be paid a daily
maternity benefit equivalent to one hundred
per cent of her present basic salary, allowances
and other benefits or the cash equivalents
of such benefits for sixty days subject to the
following conditions:
(a) That the employee shall have notified
her employer of her pregnancy and
the probable date of her childbirth
which notice shall be transmitted to the
SSS in accordance with the rules and
regulations it may provide;
(b) That the payment shall be advanced by
the employer in two equal installments
within thirty days from the filing of the
maternity leave application;
(c) That in case of caesarian delivery,

the employees shall be paid the daily
maternity benefit for seventy-eight days;
(d) That payment of daily maternity benefits
shall be a bar to the recovery of sickness
benefits provided by this Act for the same
compensable period of sixty days for the
same childbirth, abortion, or miscarriage;
(e) That the maternity benefits provided under
this section shall be paid only for the first
four deliveries after March 13, 1973;
(f) That the SSS shall immediately reimburse
the employer of one hundred per cent
of the amount of maternity benefits
advanced to the employee by the employer
upon receipt of satisfactory proof of such
payment and legality thereof; and
(g) That if an employee should give birth or
suffer abortion or miscarriage without
the required contributions having been
remitted for her by her employer to the
SSS, or without the latter having been
previously notified by the employer of
time of the pregnancy, the employer shall
pay to the SSS damages equivalent to
the benefits which said employee would
otherwise have been entitled to, and the
SSS shall in turn pay such amount to the
employee concerned. (As amended by
Sec. 7, P.D. No. 1202, S-1977; Sec. 11,
P.D. No. 1636, S-1979; and R.A. 7322)
Section 15. Non-transferability of Benefits. The SSS

shall pay the benefits provided for in this Act
to such persons as may be entitled thereto
in accordance with the provisions of this
Act: Provided, That the beneficiary who
is a national of a foreign country which does
not extend benefits to a Filipino beneficiary
residing in the Philippines, or which is not
recognized by the Philippines, shall not be
entitled to receive any benefit under this Act:
Provided, further, That notwithstanding the
foregoing, where the best interest of the SSS
will be served, the Commission may direct
payments without regard to nationality or
country of residence: Provided, further,
That if the recipient is a minor or a person
incapable of administering his own affairs, the
Commission shall appoint a representative
under such terms and conditions as it may
deem proper: Provided, further, That such
appointment shall not be necessary in case
the recipient is under the custody of or living
with the parents or spouse of the employee
in which case the benefits shall be paid to
such parents or spouse, as representative
payee of the recipient. Such benefits are not
transferrable and no power of attorney or
other document executed by those entitled
thereto, in favor of any agent, attorney, or
any other person for the collection thereof on
their behalf shall be recognized, except when
they are physically unable to collect personally

such benefits: Provided, further, That in case
of death benefits, if no beneficiary qualifies
under this Act, said benefits shall be paid
to the legal heirs in accordance with the
law of succession: Provided, finally, That
notwithstanding any law to the contrary,
the payment of benefits under this Act shall
bar the recovery of similar benefits under
Title II of Book IV of the Labor Code of the
Philippines, as amended, during the period
of such payment for the same contingency,
and conversely. (As amended by Sec. 10, R.A.
2658; Sec. 4, R.A. 3839; Sec. 8, R.A. 4857; Sec.
8-A, P.D. No. 24, S-1972; and Sec. 13, P.D.
No. 735, S-1975)
Section 16. Exemption from Tax, Legal Process and Lien.
All laws to the contrary notwithstanding
the SSS and all its assets and properties,
all contributions collected and all accruals
thereto and income or investment earnings
therefrom as well as all supplies, equipment,
papers or documents which may be required
in connection with the operation or execution
of this Act shall be exempt from any tax,
assessment, fee, charge, or customs or import
duty; and all benefit payments made by the
SSS shall likewise be exempt from all kinds of
taxes, fees or charges, and shall not be liable
to attachments, garnishments, levy or seizure
still unpaid by the SSS shall be null and void.
(As amended by Sec. 9, by or under any legal

or equitable process whatsoever, either before
or after receipt by the person or persons
entitled thereto, except to pay any debt of the
covered employee to the SSS. No tax measure
hereafter enacted shall apply to the SSS,
unless it expressly revokes the declared policy
of the State in section two hereof granting
tax-exemption to the SSS. Any tax assessment
against, and P.D. No. 24, S-1972 and Sec. 14,
P.D. No. 735, S-1975)
Section 17. Fee of Agents, Attorneys, etc. No agent, attorney
or other person in charge of the preparation,
filing or pursuing any claim for benefit under
this Act shall demand or charge for his services
any fee, and any stipulation to the contrary shall
be null and void. The retention or deduction
of any amount from any benefit granted under
this Act for the payment of fees for such services
is prohibited: Provided, however, That any
member of the Philippine Bar who appears as
counsel in any case heard by the Social Security
Commission shall be entitled to attorneys
fees not exceeding ten per cent of the benefits
awarded by the Commission, which fees shall
not be payable before the actual payment of the
benefits, and any stipulation to the contrary shall
be null and void.
Any violation of the provisions of this
Section shall be punished by a fine of not
less than five hundred pesos nor more than
five thousand pesos, or imprisonment for

not less than six months nor more than
one year, or both, at the discretion of the
court. (As amended by Sec. 4, P.D. No. 347,
S-1973 and Sec. 8, P.D. No. 1202, S-1977)
E. Sources of Funds
Employment Records and Reports
Section 18. Employees Contribution.

(a) Beginning as of the last day of the
calendar month when an employees
compulsory coverage takes effect and
every month thereafter during his
employment, the employer shall deduct
and withhold from such employees
monthly salary, wage, compensation or
earnings, the employees contribution in
an amount corresponding to his salary,
wage, compensation or earnings during
the month in accordance with the
following schedule effective on January
1, 1987:
Salary Range of Monthly Monthly Contribution

Bracket Compensation Salary Employer Employee Total
Number Credit
I P 1 - 149.99 P 125.00 P 6.40 P 4.10 P 10.50
II 150 - 199.99 175 9 5.7 14.7
III 200 - 249.99 225 11.4 7.5 18.9
IV 250 - 349.99 300 15.2 10 25.2
V 350 - 499.99 425 21.6 14.1 35.7
VI 500 - 699.99 600 30.4 20 50.4

VII 700 - 899.99 800 40.5 26.7 67.2
VIII 900 - 1099.99 1,000.00 50.7 33.3 84
IX 1100 - 1399.99 1,250.00 63.3 41.7 105
X 1400 - 1749.99 1,500.00 76 50 126
XI 1750 - 2249.99 2,000.00 101.3 66.7 168
XII 2250 - 2749.99 2,500.00 126.7 83.3 210
XIII 2750 - OVER 3,000.00 152 100 252
The tabulated schedule for the monthly

contribution of the self-employed and
voluntary members effective January 1,
1987 shall be as follows:
Salary Range of Monthly Salary Monthly

Bracket compensation Credit Contribution
Number
I P 1 - 149.99 P 125.00 P 10.00
II 150 - 199.99 175 14
III 200 - 249.99 225 18
IV 250 - 349.99 300 24
V 350 - 499.99 425 34
VI 500 - 699.99 600 48
VII 700 - 899.99 800 64
VIII 900 - 1,099.99 1,000.00 80
IX 1,100 - 1,399.99 1,250.00 100
X 1,400 - 1,749.99 1,500.00 120
XI 1,750 - 2,249.99 2,000.00 160
XII 2,250 - 2,749.99 2,500.00 200
XIII 2,750 - OVER 3,000.00 240
The maximum covered earnings or

compensation of all SSS members shall be
limited to three thousand pesos per month
as provided in the foregoing schedules

unless otherwise provided by the Social
Security Commission through rules and
regulations taking into consideration
actual calculations and rate of benefits. (As
R.A. 2658; Sec. 10, P.D. No. 24, S-1972;
and Sec. 9, P.D. No. 1202, S-1986)
(b) Every employer shall issue a receipt
for all contributions deducted from
the employees compensation or
shall indicate such deductions on the
employees pay envelopes. (As amended
by Sec. 12, P.D. No. 1636, S-1979)
Section 19. Employers Contributions.
(a) Beginning as of the last day of the month
when an employees compulsory coverage
takes effect and every month thereafter
during his employment, his employer shall
pay, with respect to such covered employee,
the employers contribution in accordance
with the schedule indicated in section
eighteen of this Act. Notwithstanding any
contract to the contrary, an employer shall
not deduct, directly or indirectly, from the
compensation of his employees covered by
the SSS or otherwise recover from them
the employers contributions with respect to
such employees.
(b) The remittance of such contributions
by the employer shall be supported by a
quarterly collection list to be submitted

to the SSS at the end of each calendar
quarter indicating the correct ID number
of the employer, the correct names and
SS numbers of the employees and the
total contributions paid for their account
during the quarter. (As amended by Sec.
13, P.D. No. 1636, S-1979)
Section 19-A. Contributions of the Self-employed. The
contributions to the SSS of the self-
employed shall be determined in accordance
with section eighteen of this Act: Provided,
That the average monthly net earnings
declared by the self-employed at the time
of his registration with the SSS shall be
considered as his monthly compensation
and he shall pay both the employer and
employee contributions.
Net earnings as understood under this
section shall be the net income from his
business or profession as reflected in the
income tax return for the immediately
preceding year, excluding rental income,
dividend, interest investments and the
like or all types of incomes which are
not derived from his business registered
with the SSS or from the practice of his
profession.
The average monthly net earnings declared
by the self-employed member at the time of
his registration shall remain the basis of his
monthly salary credit, unless he makes, at

the start of the year, another declaration of
his average monthly net earnings based on
his income tax returns for the immediately
preceding year, in which case such latest
declaration becomes the new basis of his
monthly salary credit. (As amended by Sec.
14, P.D. No. 1636, S-1979)
Section 20. Government Contribution. As the
contribution of the Government to the
operation of the System, the Congress
shall annually appropriate out of any funds
in the National Treasury not otherwise
appropriated, the necessary sum or sums
to meet the estimated expenses of the
System for each ensuing year. In addition
to this contribution, the Congress shall
appropriate from time to time such sum
or sums as may be needed to assure the
maintenance of an adequate working
balance of the funds of the System as
disclosed by suitable periodic actuarial
studies to be made of the operations of the
System.
Section 21. Government Guarantee. 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 System. (As amended
by Sec. 13, R.A. 1792)
Section 22. Remittance of Contributions.

a) The contribution imposed in the
preceding section shall be remitted to the
SSS within the first seven days of each
calendar month following the month for
which they are applicable or within such
time as the Commission may prescribe.
Every employer required to deduct
and to remit such contributions shall
be liable for their payment and if any
contribution is not paid to the SSS as
herein prescribed, he shall pay besides
the contribution a penalty thereon of
three per cent per month from the date
the contribution falls due until paid.
If deemed expedient and advisable by
the Commission, the collection and
remittance of contributions shall be
made quarterly or semi-annually in
advance, the contributions payable by
the employees to be advanced by their
respective employers: Provided, That
upon separation of an employee, any
contribution so paid in advance but not
due shall be credited or refunded to his
employer. (As amended by Sec. 12, P.D.
No. 24, S-1972)
(b) The contributions payable under this Act
in cases where an employer refuses or
neglects to pay the same shall be collected
by the SSS in the same manner as taxes
are made collectible under the National

Failure or refusal of the employer to
pay or remit the contributions herein
prescribed shall not prejudice the right of
the covered employee to the benefits of
the coverage.
The right to institute the necessary
action against the employer may be
commenced within twenty years from
the time the delinquency is known or
the assessment is made by the SSS, or
from the time the benefit accrues, as
the case may be. (As amended by Sec.
15, P.D. No. 1636, S-1979)
(c) Should any person, natural or juridical,
default in any payment of contributions,
the Commission may also collect the
same in either of the following ways:
(1) By an action in court, which shall hear
and dispose of the case in preference
to any other civil action, or
(2) By issuing a warrant to the Sheriff
of any province or city commanding
him to levy upon and sell any real
and personal property of the debtor.
The Sheriffs sale by virtue of said
warrant shall be governed by the
same procedure prescribed for
executions against property upon
judgments by a court of record.
(d) The last complete record of monthly

contributions paid by the employer or
the average of the monthly contributions
paid during the past three years as of the
date of filing of the action for collection
shall be presumed to be the monthly
contributions payable by and due from
the employer to the SSS for each of the
unpaid month, unless contradicted and
overcome by other evidence: Provided,
That the SSS shall not be barred from
determining and collecting the true
and correct contributions due the SSS
even after full payment pursuant to this
paragraph, nor shall the employer be
relieved of his liability under section
twenty-eight of this Act. (As amended
by Sec. 12, P.D. No. 24, S-1972 and
Sec. 11, P.D. No. 1202, S-1977)
(e) For purposes of this Section, any employer
who is delinquent or has not remitted
all the monthly contributions due and
payable may within six months from the
issuance of this Executive Order remit
said contributions to the SSS and submit
the corresponding collection lists herefore
without incurring the prescribed three
per cent penalty. In case the employer fails
to remit to the SSS the said contributions
within the six months grace period, the
penalty of three per cent shall be imposed
from the time the contributions first

became due as provided in paragraph (a)
of this section. (As amended by Sec. 12,
P.D. No. 24, S-1972; Sec. 6, P.D. No. 177,
S-1973; and Sec. 4, E.O. No. 28, S-1986)
Section 22-A. Remittance of Contributions of Self-employed.
Self-employed members shall remit their
monthly contributions quarterly on such
dates and schedules, as the Commission may
specify through rules and regulations.
The penalty of three per cent per month for
late payments provided for in paragraph (a) of
section twenty-two of this Act and the manner
of collection of contributions specified in
paragraphs (b), (c) and (d) of section twenty-
two of this Act are also applicable to the
collection of penalties and contributions of
the covered self-employed. (As amended by
Sec. 16, P.D. No. 1636, S-1979)
Section 23. Method of Collection and Payment. The
SSS shall require a complete and proper
collection and payment of contributions
and proper identification of the employer
and the employee. Payment may be made
in cash, checks, stamp, coupons, tickets,
or other reasonable devices that the
Commission may adopt. (As amended by
Sec. 15, P.D. No. 735, S-1975)
Section 24. Employment Records and Reports.
(a) Each employer shall immediately report
to the SSS the names, ages, civil status,
occupations, salaries and dependents

of all his employees who are subject to
compulsory coverage: Provided, That
if an employee subject to compulsory
coverage should die or become sick or
disabled or reach the age of sixty without
the SSS having previously received any
report or written communication about
him from his employer or a contribution
paid in his name by his employer, the said
employer shall pay to the SSS the damages
equivalent to the benefits to which said
employee would have been entitled had
his name been reported on time by the
employer to the SSS, except that in case
of pension benefits, the employer shall be
liable to pay the SSS damages equivalent
to five years monthly pension; including
dependents pension: Provided, further,
That if the contingency occurs within thirty
days from the date of employment, the
employer shall be relieved of his liability
for damages. (As amended by Sec. 15, R.A.
1792; Sec. 9, R.A. 4857; Sec. 13, P.D. No. 24,
S-1972; Sec. 16, P.D. No. 735, S-1975; and
Sec. 12, P.D. No. 1202, S-1977)
(b) Should the employer misrepresent the
true date of employment of his employees
or remit to the SSS contributions which
are less than those required in this Act,
resulting in a reduction of benefits, the
employer shall pay to the SSS damages to

the extent of such reduction. (As amended
by Sec. 13, P.D. No. 24, S-1972; Sec. 16,
P.D. No. 735, S-1975; and Sec. 17, P.D.
No. 1636, S-1979)
In addition to the liability mentioned
in the preceding paragraphs (a) and (b)
hereof, the employer shall also be liable
for the payment of the corresponding
unremitted contributions and penalties
thereon. (As amended by Sec. 17, P.D.
No. 1636, S-1979)
(c) The records and reports duly accomplished
and submitted to the SSS by the employee
or the employer, as the case may be, shall
be kept confidential by the SSS except in
compliance with a subpoena duces tecum
issued by the Courts, shall not be divulged
without the consent of the Administrator
or any official of the SSS duly authorized
by him, shall be presumed correct as
to the data and other matters stated
therein, unless the necessary corrections
to such records and reports have been
properly made by the parties concerned
before the right to the benefit being
claimed accrues, and shall be made the
basis for the adjudication of the claim. If
as a result of such adjudication the SSS
in good faith pays a monthly pension
to a beneficiary who is inferior in right
to another beneficiary or with whom

another beneficiary is entitled to share,
such payments shall discharge the SSS
from liability, unless and until such other
beneficiary notifies the SSS of his claim
prior to the payments. (As amended by
Sec. 13, P.D. No. 24, S-1972 and Sec. 16,
P.D. No. 735, S-1975)
(d) Every employer shall keep true and
accurate work records for such period
and containing such information as the
Commission may prescribe, in addition to
an Annual Register of New and Separated
Employees which shall be secured from
the SSS wherein the employer shall enter
on the first day of employment or on the
effective date of separation, the names of
the persons employed or separated from
employment, their SSS numbers, and
such other data that the Commission may
require and said annual register shall be
submitted to the SSS in the month of
January of each year. Such records shall
be open for inspection by the SSS or its
authorized representatives quarterly or as
often as the SSS may require.
The SSS may also require each employer
to submit, with respect to the persons
in his employ, reports needed for the
effective administration of this Act. (As
(e) Effective July 1, 1973, each employer

shall require as a condition to
employment, the presentation of a
registration number secured by the
prospective employee from the SSS
in accordance with such procedure as
the SSS may adopt: Provided, That in
case of employees who have earlier been
assigned registration numbers by virtue
of a previous employment, such numbers
originally assigned to them should be used
for purposes of this section: Provided,
further, That the issuance of such
registration numbers by the SSS shall not
exempt the employer from complying
with the provisions of paragraph (a) of
this section. (As amended by Sec. 13, P.D.
No. 24, S-1972)
(f) Notwithstanding any law to the contrary,
microfilm copies of original SSS records
and reports, duly certified by the official
custodian thereof, shall have evidentiary
value as the originals and be admissible
as evidence in all legal proceedings. (As
Section 24-A. Report and Registration of the Self-employed.
Each covered self-employed person shall,
within thirty days from the effective date of
coverage, report to the SSS his name, age, civil
status, and occupation, average monthly net
income and his dependents: Provided, That
if after said period of thirty days, he should

die or become sick, or disabled or reach the
age of sixty without the SSS having previously
received such report, the SSS shall not pay
him the corresponding benefit. (As amended
by Sec. 18, P.D. No. 1636, S-1979)
F. Funds of the System
Section 25. Deposit and Disbursements. All moneys

paid to or collected by the SSS every year
under this Act, and all accruals thereto shall
be deposited, administered and disbursed
in the same manner and under the same
conditions and requirements as provided
by law for other public special funds:
Provided, That not more than twelve per
cent of the total yearly contributions plus
three per cent of other revenues shall be
disbursed for salaries and wages, purchases
of office equipment and materials,
operational expenses and the maintenance
of regional offices of the SSS: Provided,
further, That if the expenses in any year are
less than the maximum amount permissible,
the difference shall not be availed of as
additional expenses in the following years.
(As amended by Sec. 16, R.A. 2658; Sec. 5,
R.A. 3839; Sec. 10, R.A. 4857; Sec. 13-A,
P.D. No. 24, S-1972; Sec. 17, P.D. No. 735,
S-1975; and Sec. 10, E.O. No. 102, S-1986)
Section 26. Investment of Reserve Funds. All revenues

of the SSS that are not needed to meet the
current administrative and operational
expenses incidental to the carrying out of
this Act shall be accumulated in a fund to be
known as the Reserve Fund. Such portions of
the Reserve Fund as are not needed to meet
the current benefit obligations thereof shall
be invested to earn an average annual income
of at least nine per cent and shall be known
as the Investment Reserve Fund which shall
be invested in any or all of the following: (As
amended by Sec. 14, P.D. No. 24, S-1972;
Sec. 19, P.D. No. 1636, S-1979; and Sec. 11,
E.O. No. 102, S-1986)
(a) In interest-bearing bonds or securities
of the Government of the Philippines,
or bonds or securities for the payment
of the interest and principal to which
the faith and credit of the Republic of
the Philippines is pledged.
(b) In interest-bearing deposits or
securities in any domestic bank doing
business in the Philippines: Provided,
That such deposits 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 the depository for this purpose by
the Monetary Board of the Bangko

Sentral ng Pilipinas: Provided, finally,
That such investment in deposits or
securities shall be equitably distributed
to all designated banks. (As amended by
Sec. 14, P.D. No. 24, S-1972)
(c) In loans or interest-bearing advances
to the National Government for
the construction of permanent toll
bridges, toll roads or government
office buildings in accordance with
actuarial considerations and the
conditions prescribed by law in such
cases: Provided, That the tolls shall be
collected by the SSS for a reasonable
fee. (As amended by Sec. 14, P.D. No.
24, S-1972)
(d) In direct housing loans to covered
employees and group housing projects
giving priority to the low-income groups,
up to a maximum of ninety per cent of
the appraised value of the properties to be
mortgaged by the borrowers and in loans
for the construction and the maintenance
of hospitals and institutions for the sick,
aged and infirmed members and their
families, referred to in section 4 (j) of
this Act: Provided, That such investment
shall not exceed thirty per cent of the
Investment Reserve Fund. (As amended
by Sec. 15, R.A. 2658; Sec. 14, P.D. No.
24, S-1972; Sec. 18, P.D. No. 735, S-1975;

and Sec. 11, E.O. No. 102, S-1986)
(e) In short and medium term loans to covered
employees such as salary, educational,
calamity and emergency loans: Provided,
That not more than ten per cent of the
Investment Reserve Fund at any time
shall be invested for this purpose. (As
P.D. No. 24, S-1972; and Sec. 11, E.O.
No. 102, S-1986)
(f) In other income earning projects and
investments secured by first mortgages
on real estate collaterals which, in the
determination of the Commission, shall
redound to the benefit of the SSS, its
members, as well as the public welfare:
Provided, That any such investment
shall be made with due diligence and
prudence to earn the highest possible
interest consistent with safety. (As
amended by Sec. 17, R.A. 1792; Sec.
11, R.A. 4857; and Sec. 14, P.D. No. 24,
S-1972)
(g) As part of its investment operations, the
SSS shall act as insurer of all or part of
its interests on SSS properties mortgaged
to the SSS, or lives of mortgagors
whose properties are mortgaged to
the SSS. For this purpose, the SSS
shall establish a separate account to be
known as the Mortgagors Insurance

Account. All amounts received by the
SSS in connection with the aforesaid
insurance operations shall be placed in
the Mortgagors Insurance Account. The
assets and liabilities of the Mortgagors
Insurance Account shall at all times be
clearly identifiable and distinguishable
from the assets and liabilities in all other
accounts of the SSS. Notwithstanding
any provision of law to the contrary, the
assets held in the Mortgagors Insurance
Account shall not be chargeable with the
liabilities arising out of any other business
the SSS may conduct but shall be held and
applied exclusively for the benefit of the
owners or beneficiaries of the insurance
contracts issued by the SSS under this
paragraph.
(h) The SSS may insure any of its interests
or part thereof with any private company
or reinsurer. The Insurer Commission
or its authorized representatives shall
make an examination into the financial
condition and methods of transacting
business of the SSS at least once in
two years, but such examination shall
be limited to the insurance operation
of the SSS as authorized under this
section and shall not embrace the other
operations of the SSS; and the report
of said examination shall be submitted

to the Commission and a copy thereof
shall be furnished the office of the
President of the Philippines within a
reasonable time after the close of the
examination: Provided, That for each
examination, the SSS shall pay to the
Insurance Commission an amount
equal to the actual expenses of the
Insurance Commission in the conduct
of the examination including the
salaries of the examiners and of the
actuary of the Insurance Commission
who have been assigned to make such
examination for the actual time spent
in said examination: Provided, further,
That the general law on insurance
promulgated thereunder shall have
suppletory application insofar as it is
not in conflict with the SS Law and its
rules and regulations. (As amended by
Sec. 14, P.D. No. 24, S-1972; Sec. 1, P.D.
No. 65; Sec. 7, P.D. No. 177, S-1973;
and Sec. 18, P.D. No. 735, S-1975)
(i) In bonds, debentures or other evidences of
indebtedness of any solvent corporation
or institution created or existing
under the laws of the Philippines:
Provided, That the issuing, assuming or
guaranteeing 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 including
the last two of the five fiscal years next
preceding the date of acquisition by
the SSS of such bonds, debentures, or
other evidences of indebtedness, the
net earnings of the issuing, assuming or
guaranteeing institution available for
its fixed charges, as hereinafter defined,
shall have been not less than one and
one-quarter times the total of its fixed
charges for such year: Provided, further,
That such investment shall not exceed
10 per cent of the Investment Reserve
Fund.
As used in this section, the term
net earnings available for fixed
charges shall mean net income after
deducting operating and maintenance
expenses, taxes other than income
taxes, depreciation and depletion; but
excluding extraordinary non-recurring
items of income or expense appearing
in the regular financial statement of
the issuing, assuming or guaranteeing
institution. The Term fixed charges
shall include interest on funded
and unfunded debt, amortization of
debt discount and rentals for leased
properties. (As amended by Sec. 12,
E.O. No. 102, S-1986)
(j) In preferred stocks of any solvent corporation

or institution created or existing under the
laws of the Philippines: Provided, That
the issuing, assuming, or guaranteeing
entity or its predecessors has paid regular
dividends upon its preferred or guaranteed
stocks for a period of at least three years
next preceding the date of investment
in such preferred or guaranteed stocks:
Provided, further, That if the stocks
are guaranteed, the amount of stocks
so guaranteed is not in excess of fifty
percentum of the amount of the preferred
or common stocks, as the case may be,
of the issuing corporations: Provided,
furthermore, That if the corporation or
institution has not paid dividends upon
its preferred stocks, the corporation or
institution has sufficient retained earnings
to declare dividends for at least two years
on such preferred stock: Provided, finally,
That such investment shall not exceed 10
per cent of the Investment Reserve Fund.
S-1986)
(k) In common stocks of any solvent corporation
or institution created or existing under
the laws of the Philippines listed in the
stock exchange with proven track record
of profitability and payment of dividends
over the last three years: Provided, That
such investment shall not exceed ten per

cent of the Investment Reserve Fund.
S-1986)
Section 27. Records and Reports. The administrator
shall keep and cause to be kept records of
operations, of the funds of the System and
of disbursements thereof and all accounts of
payments made out of said funds. During
the month of January of each year, the
Administrator shall prepare for submission
to the President and to the Congress of the
Philippines a report of operations of the
System during the preceding year including
statistical data on the number of persons
covered and benefited, their occupations
and employment status, the duration and
amount of benefits paid, the finances of the
System at the close of the said year, and
recommendations. He shall also cause to
be published in two newspapers of general
circulation in the Philippines a synopsis of
the annual report, showing in particular
the status of the finances of the System and
the benefits administered.
Section 28. Penal Clause.
(a) Whoever, for the purpose of causing
any payment to be made under this
Act, or under an agreement thereunder,
where none is authorized to be paid,
shall make or cause to be made any
false statement or representation as to

any compensation paid or received or
whoever makes or causes to be made
any false statement of a material fact
in any claim for any benefit payable
under this Act, or application for loan
with the SSS, or whoever makes or
causes to be made any false statement,
representation, affidavit, or document
in connection with such claim or loan,
shall suffer the penalties provided for
in Art. one hundred seventy-two of the
Revised Penal Code. (As amended by
Sec. 15, P.D. No. 24, S-1972; Sec. 8,
P.D. No. 177, S-1973; and Sec. 5, P.D.
No. 347, S-1973)
(b) Whoever shall obtain or receive any
money or check under this Act or any
agreement thereunder, without being
entitled thereto with intent to defraud
any covered employee, employer or the
SSS, shall be fined not less than five
hundred pesos nor more than five
thousand pesos and imprisoned for not
less than six months nor more than one
year. (As amended by Sec. 15, P.D. No.
24, S-1972)
(c) Whoever buys, sells, offers for sale, uses,
transfers, takes or gives in exchange, or
pledges or gives in pledge, except as
authorized in this Act or in regulations
made pursuant thereto, any stamp,

coupon, ticket, book or other device,
prescribed pursuant to section twenty-
three hereof by the Commission for the
collection or payment of contributions
required herein, shall be fined not less
than five hundred pesos nor more than
five thousand pesos, or imprisoned for
one year, or both, at the discretion of
the court.
(d) Whoever, with intent to defraud, alters,
forges, makes or counterfeits any
stamp, coupon, ticket, book or other
device prescribed by the Commission
for the collection or payment of any
contribution required herein, or uses,
sells, lends, or has in his possession any
such altered, forged, or counterfeited
materials or makes, uses, sells, or has in
his possession any such altered, forged
material in imitation of the material
used in the manufacture of such stamp,
coupon, ticket, book, or other device,
shall be fined not less than one thousand
pesos nor more than ten thousand pesos
or imprisoned for not less than one year
nor more than five years, or both, at the
discretion of the court.
(e) Whoever fails or refuses to comply with
the provisions of this Act or with the
rules and regulations promulgated by

the Commission, shall be punished by a
fine of not less than five hundred pesos
nor more than five thousand pesos,
imprisonment for not less than six
months nor more than one year, or both,
at the discretion of the court: Provided,
That where the violation consists in
failure or refusal to register employees
or himself, in case of the covered self-
employed or to deduct contributions
from employees compensation and
remit the same to the SSS, the penalty
shall be a fine of not less than five
hundred pesos nor more than five
thousand pesos and imprisonment for
one year. (As amended by Sec. 19, R.A.
1792; Sec. 16, R.A. 2658, Sec. 8, P.D.
No. 177, S-1973; and Sec. 20, P.D. No.
1636, S-1979)
(f) If the act or omission penalized by this
Act be committed by an association,
partnership, corporation or any other
institution, its managing head, directors
or partners shall be liable to the penalties
provided in this Act for the offense.
(g) Any employee of the System who
receives or keeps funds or property
belonging, payable or deliverable to the
System and who shall appropriate the
same, or shall take or misappropriate or

shall consent, or through abandonment
or negligence shall permit any other
person to take such property or funds,
wholly or partially, or shall otherwise
be guilty of misappropriation of such
funds or property, shall suffer the
penalties provided in Art. two hundred
seventeen of the Revised Penal Code.
(h) Any employer who after deducting
the monthly contributions or loan
amortizations from his employees
compensation; fails to remit the said
deductions to the SSS within thirty days
from the date they became due shall be
presumed to have misappropriated such
contributions or loan amortizations
and shall suffer the penalties provided
in Art. three hundred fifteen of the
Revised Penal Code. (As amended by
Sec. 15, P.D. No. 24, S-1972)
(i) Criminal action arising from a
violation of the provisions of this Act
may be commenced by the SSS or the
employee concerned either under this
Act or in appropriate cases under the
Revised Penal Code: Provided, That
such criminal action may be filed by the
SSS in the city or municipality where
the SSS provincial or regional office is
located if the violation was committed

within its territorial jurisdiction or in
Metro Manila, at the option of the SSS.
S-1972; Sec. 19, P.D. No. 735, S-1975;
and Sec. 13, P.D. No. 1202, S-1977)
Section 29. Government Aid. The establishment
of the Social Security System shall not
disqualify the covered employees and
employers from receiving such government
assistance, financial or otherwise, as may be
provided.
Section 30. Separability Clause. In the event any
provision of this Act or the application of
such provision to any person or circumstance
is declared invalid, the remainder of this
Act or the application of said provision to
other persons or circumstances shall not be
affected by such declaration.
Section 31. Saving Clause. The Assembly hereby
reserves the right to amend, alter, or repeal
any provision of this Act, and no person
shall be or shall be deemed to be vested
with any property or other right by virtue
of the enactment or operation of this Act.
(As amended by Sec. 21, R.A. 1792 and Sec.
20, P.D. No. 735, S-1975)
Section 32. Effectivity. This Act shall take effect
upon its approval.
Approved:June 18, 1954

Republic of the Philippines

Congress of the Philippines
Metro Manila
Tenth Congress
Second Regular Session
Begun and held in Metro Manila, on Monday the twenty-

second day of July, nineteen hundred and ninety six.
[REPUBLIC ACT NO. 8282]
AN ACT FURTHER STRENGTHENING THE

SOCIAL SECURITY SYSTEM THEREBY
AMENDING FOR THIS PURPOSE REPUBLIC
ACT NO. 1161, AS AMENDED, OTHERWISE
KNOWN AS THE SOCIAL SECURITY LAW

of the Philippines in Congress assembled:
Section 1. Republic Act No. 1161, otherwise known as

the Social Security Law, is hereby further
amended to read as follows:
SEC. 1. Short Title. - This Act shall be known
as the Social Security Act of 1997.
SEC. 2. Declaration of Policy. - It is the policy
of the State to establish, develop, promote
and perfect a sound and viable tax-exempt
social security system suitable to the needs
of the people throughout the Philippines

which shall promote social justice and provide
meaningful protection to members and their
beneficiaries against the hazards of disability,
sickness, maternity, old age, death, and
other contingencies resulting in loss of income
or financial burden. Towards this end, the
State shall endeavor to extend social security
protection to workers and their beneficiaries.
SEC. 3. Social Security System.
(a) To carry out the purposes of this Act,
the Social Security System, hereinafter
referred to as SSS, a corporate body, with
principal place of business in Metro Manila,
Philippines, is hereby created. The SSS
shall be directed and controlled by a Social
Security Commission, hereinafter referred to
as Commission, composed of the Secretary
of Labor and Employment or his duly
designated undersecretary, the SSS president
and seven (7) appointive members, three (3)
of whom shall represent the workers group,
at least one (1) of whom shall be a woman;
three (3), the employers group, at least one
(1) of whom shall be a woman; and one (1),
the general public whose representative shall
have adequate knowledge and experience
regarding social security, to be appointed
by the President of the Philippines. The
six (6) members representing workers and
employers shall be chosen from among
the nominees of workers and employers

organizations, respectively. The Chairman
of the Commission shall be designated by
the President of the Philippines from among
its members. The term of the appointive
members shall be three (3) years: Provided,
That the terms of the first six (6) appointive
members shall be one (1), two (2) and
three (3) years for every two (2) members,
respectively: 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 unexpired term
only. The appointive members of the
Commission shall receive at least Two
thousand five hundred pesos (P2,500.00)
per diem for each meeting actually attended
by them, but not to exceed Ten thousand
pesos (P10,000.00) a month: Provided, That
members of the Commission who hear and
evaluate cases pending before the Commission
shall also receive a per diem of at least Two
thousand five hundred pesos (P2,500.00),
but not to exceed Fifteen thousand pesos
(P15,000.00) a month: Provided, further,
That said members of the Commission
shall also receive reasonable transportation
and representation allowances as may be fixed
by the Commission, but not to exceed Ten
thousand pesos (P10,000.00) a month.
(b) The general conduct of the operations

and management functions of the SSS
shall be vested in the SSS President who
shall serve as the chief executive officer
immediately responsible for carrying out
the program of the SSS and the policies
of the Commission. The SSS President
shall be a person who has had previous
experience in technical and administrative
fields related to the purposes of this Act. He
shall be appointed by the President of the
Philippines and shall receive a salary to be
fixed by the Commission with the approval
of the President of the Philippines, payable
from the funds of the SSS.
(c) The Commission, upon the
recommendation of the SSS President,
shall appoint an actuary and such other
personnel as may be deemed necessary; fix
their reasonable compensation, allowances
and other benefits; prescribe their duties
and establish such methods and procedures
as may be necessary to insure the efficient,
honest and economical administration of
the provisions and purposes of this Act:
Provided, however, That the personnel of
the SSS below the rank of Vice President
shall be appointed by the SSS President:
Provided, further, That the personnel
appointed by the SSS President, except
those below the rank of assistant manager,
shall be subject to the confirmation by the

Commission: Provided, further, That the
personnel of the SSS shall be selected only
from civil service eligibles and be subject to
civil service rules and regulations: Provided,
finally, That the SSS shall be exempt from
the provisions of Republic Act No. 6758
and Republic Act No. 7430.
SEC. 4. Powers and Duties of the
Commission and SSS.
(a) 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 and/or employees, self-
employed and voluntary members
and their earnings, 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 of the Philippines;
(3) To maintain a Provident Fund which

consists of contributions made by
both the SSS and its officials and
employees and their earnings, for the
payment of benefits to such officials
and employees or their heirs under
such terms and conditions as it may
prescribe;
(4) To approve restructuring proposals
for the payment of due but unremitted
contributions and unpaid loan
amortizations under such terms and
conditions as it may prescribe;
(5) To authorize cooperatives registered
with the cooperative development
authority or associations registered
with the appropriate government
agency to act as collecting agents of the
SSS with respect to their members:
Provided, That the SSS shall accredit
the cooperative or association:
Provided, further, That the persons
authorized to collect are bonded;
(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; and
(7) 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 four (4), paragraph
seven (7) hereof, the SSS shall have the
following powers and duties:
(1) To submit annually not later than April
30, a public report to the President of
the Philippines and to the Congress of
the Philippines covering its activities in
the administration and enforcement
of this Act during the preceding
year including information and
recommendations on broad policies
for the development and perfection
of the program of the SSS.
(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, 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;
(3) To establish offices of the SSS to
cover as many provinces, cities and
congressional districts, whenever and
wherever it may be expedient, necessary
and feasible, and to inspect or cause to
be inspected periodically such offices;
(4) To enter into agreements or contracts
for such service and aid, as may be
needed for the proper, efficient and
stable administration of the SSS;
(5) To adopt, from time to time, a budget
of expenditures including salaries of
personnel, against all funds available
to the SSS under this Act;
(6) To set up its accounting system and
provide the necessary personnel
therefor;
(7) To require reports, compilations and
analyses of statistical and economic data
and to make investigation as may be
needed for the proper administration
and development of the SSS;
(8) To acquire and dispose of property, real
or personal, which may be necessary
or expedient for the attainment of the

purposes of this Act;
(9) To acquire, receive, or hold, by way of
purchase, expropriation or otherwise,
public or private property for the
purpose of undertaking housing
projects preferably for the benefit
of low-income members and for
the maintenance of hospitals and
institutions for the sick, aged and
disabled, as well as schools for the
members and their immediate families;
(10) To sue and be sued in court; and
(11) To perform such other corporate
acts as it may deem appropriate for
the proper enforcement of this Act.
SEC. 5. Settlement of Disputes.
(a) Any dispute arising under this Act with
respect to coverage, benefits, contributions
and penalties thereon or any other matter
related thereto, shall be cognizable by the
Commission, and any case filed with respect
thereto shall be heard by the Commission,
or any of its members, or by hearing officers
duly authorized by the Commission and
decided within the mandatory period of
twenty (20) days after the submission of
the evidence. The filing, determination
and settlement of disputes shall be governed
by the rules and regulations promulgated
by the Commission.
(b) Appeal to Courts. Any decision of the

Commission, in the absence of an appeal
therefrom as herein provided, shall become
final and executory fifteen (15) days after
the date of notification, and judicial review
thereof shall be permitted only after any
party claiming to be aggrieved thereby
has exhausted his remedies before the
Commission. The Commission shall be
deemed to be a party to any judicial action
involving any such decision, and may be
represented by an attorney employed by
the Commission, or when requested by
the Commission, by the Solicitor General
or any public prosecutor.
(c) Court Review. The decision of the
Commission upon any disputed matter may
be reviewed both upon the law and the facts
by the Court of Appeals. For the purpose
of such review the procedure concerning
appeals from the Regional Trial Court shall
be followed as far as practicable and consistent
with the purposes of this Act. Appeal from a
decision of the Commission must be taken
within fifteen (15) days from notification
of such decision. If the decision of the
Commission involves only questions of law,
the same shall be reviewed by the Supreme
Court. No appeal bond shall be required. The
case shall be heard in a summary manner, and
shall take precedence over all cases, except that
in the Supreme Court, criminal cases wherein

life imprisonment or death has been imposed
by the trial court shall take precedence. No
appeal shall act as supersedeas or a stay of
the order of the Commission unless the
Commission itself, or the Court of Appeals
or the Supreme Court, shall so order.
(d) Execution of Decisions. The Commission
may, motu proprio or on motion of any
interested party, issue a writ of execution
to enforce any of its decisions or awards,
after it has become final and executory, in
the same manner as the decision of the
Regional Trial Court by directing the city or
provincial sheriff or the sheriff whom it may
appoint to enforce such final decision or
execute such writ; and any person who shall
fail or refuse to comply with such decision,
award or writ, after being required to do so
shall, upon application by the Commission,
pursuant to Rule 71 of the Rules of Court,
be punished for contempt.
SEC. 6. Auditor and Counsel.
(a) The Chairman of the Commission on
Audit shall be the ex-officio Auditor of
the SSS. He or his representative shall
check and audit all the accounts, funds
and properties of the SSS in the same
manner and as frequently as the
accounts, funds and properties of the
government are checked and audited
under existing laws; and he shall have,

as far as practicable, the same powers
and duties as he has with respect to the
checking and auditing of public accounts,
funds and properties in general.
(b) The Secretary of Justice shall be the
ex-officio counsel of the SSS. He or his
representative shall act as legal adviser
and counsel thereof.
SEC. 7. Oaths, Witnesses, and Production of
Records. When authorized by the Commission,
an official or employee thereof shall have the
power to administer oath and affirmation, take
depositions, certify to official acts and issue
subpoena and subpoena duces tecum to compel
the attendance of witnesses and the production
of books, papers, correspondence and other
records deemed necessary as evidence in
connection with any question arising under this
Act. Any case of contumacy shall be dealt with
by the Commission in accordance with law.
SEC. 8. Terms Defined. For the purposes
of this Act, the following terms shall, unless
the context indicates otherwise, have the
following meanings:
(a) SSS - The Social Security System
created by this Act.
(b) Commission - The Social Security
Commission as herein created.
(c) 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 is under his orders as regards
the employment, except the Government
and any of its political subdivisions,
branches or instrumentalities, including
corporations owned or controlled by
the Government: Provided, That a self-
employed person shall be both employee
and employer at the same time.
(d) Employee - Any person who performs
services for an employer in which either
or both mental and physical efforts are
used and who receives compensation for
such services, where there is an employer
to employee relationship: Provided, That
a self-employed person shall be both
employee and employer at the same time.
(e) Dependents - The dependent shall be
the following:
(1) The legal spouse entitled by law to
receive support from the member;
(2) The legitimate, legitimated, or
legally adopted, and illegitimate
child who is unmarried, not gainfully
employed and has not reached
twenty-one years (21) of age, or if
over twenty-one (21) years of age, he
is congenitally or while still a minor
has been permanently incapacitated
and incapable of self-support,

physically or mentally; and
(3) The parent who is receiving
regular support from the member.
(f) Compensation - All actual remuneration for
employment, including the mandated cost of
living allowance, as well as the cash value of
any remuneration paid in any medium other
than cash except that part of the remuneration
received during the month in excess of the
maximum salary credit as provided under
Section Eighteen of this Act.
(g) Monthly salary credit - The
compensation base for contributions
and benefits as indicated in the schedule
in Section Eighteen of this Act.
(h) Monthly - The period from one end of
the last payroll period of the preceding
month to the end of the last payroll period
of the current month if compensation is
on hourly, daily or weekly basis; if on
any other basis, monthly shall mean a
period of one (1) month.
(i) Contribution - The amount paid to the SSS
by and on behalf of the member in accordance
with Section Eighteen of this Act.
(j) 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) Service performed in the employ
of the Philippine Government or
instrumentality or agency thereof;
(4) 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 Philippines,
may 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) 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 services
of said contractors.
(k) Beneficiaries - The dependent spouse
until he or she remarries, the dependent
legitimate, legitimated or legally adopted,
and illegitimate children, who shall be
the primary beneficiaries of the member:
Provided, That the dependent illegitimate
children shall be entitled to fifty percent
(50%) of the share of the legitimate,
legitimated or legally adopted children:
Provided, further, That in the absence of
the dependent legitimate, legitimated or
legally adopted children of the member,
his/her dependent illegitimate children
shall be entitled to one hundred percent
(100%) of the benefits. In their absence,
the dependent parents shall be the
secondary beneficiaries of the member.
In the absence of all of the foregoing, any
other person designated by the member as
his/her secondary beneficiary.
(l) Contingency - The retirement, death,
disability, injury or sickness, and
maternity of the member.
(m) Average monthly salary credit - The result

obtained by dividing the sum of the last sixty
(60) monthly salary credits immediately
preceding the semester of contingency by
sixty (60), or the result obtained by dividing
the sum of all the monthly salary credits
paid prior to the semester of contingency
by the number of monthly contributions
paid in the same period, whichever is
greater: Provided, That the injury or
sickness which caused the disability shall
be deemed as the permanent disability
for the purpose of computing the average
monthly salary credit.
(n) Average daily salary credit - The result
obtained by dividing the sum of the six
(6) highest monthly salary credits in
the twelve-month period immediately
preceding the semester of contingency
by one hundred eighty (180).
(o) Semester - A period of two (2)
consecutive quarters ending in the
quarter of contingency.
(p) Quarter - A period of three (3)
consecutive calendar months ending on
the last day of March, June, September
and December.
(q) Credited Years of Service - For a member
covered prior to January nineteen hundred
eighty five (1985) minus the calendar year of
coverage plus the number of calendar years
in which six (6) or more contributions have

been paid from January nineteen hundred
eighty five (1985) up to the calendar year
containing the semester prior to the
contingency. For a member covered in or
after January nineteen hundred eighty five
(1985), the number of calendar years in
which six (6) or more contributions have
been paid from the year of coverage up to
the calendar year containing the semester
prior to the contingency: Provided,
That the Commission may provide for
a different number of contributions in a
calendar year for it to be considered as a
credited year of service.
(r) Member - The worker who is covered
under Section Nine and Section Nine-A
of this Act.
(s) Self-employed - Any person whose income
is not derived from employment, as defined
under this Act, as well as those workers
enumerated in Section Nine-A hereof.
(t) Net earnings - Net income before
income taxes plus non-cash charges such
as depreciation and depletion appearing
in the regular financial statement of the
issuing or assuming institution.
(u) Fixed charges - Recurring expense such as
amortization of debt discount and rentals
for leased properties, including interest on
funded and unfunded debt.
SEC. 9. Coverage.
(a) Coverage in the SSS shall be
compulsory upon all employees not over
sixty (60) years of age and their employers:
Provided, That in the case of domestic
helpers, their monthly income shall not be
less than One thousand pesos (P1,000.00)
a month: Provided, further, That any
benefit already earned by the employees
under private benefit plans existing at the
time of the approval of this Act shall not
be discontinued, reduced or otherwise
impaired: Provided, further, That private
plans which are existing and in force at
the time of compulsory coverage shall be
integrated with the plan of the SSS in such
a way where the employers contribution to
his private plan is more than that required
of him in this Act, he shall pay to the SSS
only the contribution required of him
and he shall continue his contribution to
such private plan less his contribution
to the SSS so that the employers
total contribution to his benefit plan
and to the SSS shall be the same as
his contribution to his private benefit
plan before the compulsory coverage:
Provided, further, That any changes,
adjustments, modifications, eliminations
or improvements in the benefits to be
available under the remaining private plan,
which may be necessary to adopt by reason

of the reduced contributions thereto as a
result of the integration, shall be subject
to agreements between the employers and
employees concerned: Provided, further,
That the private benefit plan which the
employer shall continue for his employees
shall remain under the employers
management and control unless there is
an existing agreement to the contrary:
Provided, finally, That nothing in this Act
shall be construed as a limitation on the
right of employers and employees to agree
on and adopt benefits which are over and
above those provided under this Act.
(b) Spouses who devote full time to
managing the household and family
affairs, unless they are also engaged in
other vocation or employment which is
subject to mandatory coverage, may be
covered by the SSS on a voluntary basis.
(c) Filipinos recruited by foreign-based
employers for employment abroad may be
covered by the SSS on a voluntary basis.
SEC. 9A. Compulsory coverage of the
Self-employed. Coverage in the SSS shall
be compulsory upon such self-employed
persons as may be determined by the
Commission under such rules and regulations
as it may prescribe, including but not limited
to the following:
1. All self-employed professionals;

2. Partners and single proprietors of
businesses;
3. Actors and actresses, directors,
scriptwriters and news correspondents
who do not fall within the definition of
the term employee; in Sec. 8 (d) of this
Act;
4. Professional athletes, coaches, trainers
and jockeys; and
5. Individual farmers and fishermen.
Unless otherwise specified herein, all
provisions of this Act applicable to covered
employees shall also be applicable to the
covered self-employed persons.
SEC. 10. Effective Date of Coverage.
Compulsory coverage of the employer shall
take effect on the first day of his operation
and that of the employee on the first day
of his employment: Provided, That the
compulsory coverage of the self-employed
person shall take effect upon his registration
with the SSS.
SEC. 11. Effect of Separation from
Employment. When an employee under
compulsory coverage is separated from
employment, his employers contribution
on his account and his obligation to pay
contributions arising from that employment
shall cease at the end of the month of
separation, but said employee shall be
credited with all contributions paid on his

behalf and entitled to benefits according to
the provisions of this Act. He may, however,
continue to pay the total contributions to
maintain his right to full benefit.
SEC. 11-A. Effect of Interruption of
Business or Professional Income. If the
self-employed member realizes no income
in any given month, he shall not be required
to pay contributions for that month. He
may, however, be allowed to continue
paying contributions under the same rules
and regulations applicable to a separated
employee member: Provided, That no
retroactive payment of contributions shall
be allowed other than as prescribed under
Section Twenty-two-A hereof.
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
(ii) Twenty percent (20%) of
the average monthly salary
credit; plus
(iii) 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) Notwithstanding 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.
SEC. 12-A. Dependents Pension. Where
monthly pension is payable on account
of death, permanent total disability or
retirement, dependents pension equivalent
to ten percent (10%) of the monthly pension
or Two hundred fifty pesos (P250.00),
whichever is higher, shall also be paid for each
dependent child conceived on or before the
date of the contingency but not exceeding
five (5), beginning with the youngest and
without substitution: Provided, That where
there are legitimate and illegitimate children,
the former shall be preferred.
SEC. 12-B. Retirement Benefits.
(a) A member who has paid at least
one hundred twenty (120) monthly
contributions prior to the semester

of retirement and who (1) has
reached the age of sixty (60) years
and is already separated from
employment or has ceased to be
self-employed or (2) has reached the
age of sixty-five (65) years, shall be
entitled for as long as he lives to the
monthly pension: Provided, That
he shall have the option to receive
his first eighteen (18) monthly
pensions in lump sum discounted at
a preferential rate of interest to be
determined by the SSS.
(b) A covered member who is sixty (60)
years old at retirement and who does
not qualify for pension benefits under
paragraph (a) above, shall be entitled to
a lump sum benefit equal to the total
contributions paid by him and on his
behalf: Provided, That he is separated
from employment and is not continuing
payment of contributions to the SSS on
his own.
(c) The monthly pension shall be suspended
upon the reemployment or resumption of
self-employment of a retired member who
is less than sixty-five (65) years old. He
shall again be subject to Section Eighteen
and his employer to Section Nineteen of
this Act.
(d) Upon the death of the retired member,

his primary beneficiaries as of the date of
his retirement shall be entitled to receive
the monthly pension: Provided, That if
he has no primary beneficiaries and he
dies within sixty (60) months from the
start of his monthly pension, his secondary
beneficiaries shall be entitled to a lump
sum benefit equivalent to the total
monthly pensions corresponding to the
balance of the five-year guaranteed period,
excluding the dependents pension.
(e) The monthly pension of a member who
retires after reaching age sixty (60) shall
be the higher of either: (1) the monthly
pension computed at the earliest time he
could have retired had he been separated
from employment or ceased to be self-
employed plus all adjustments thereto;
or (2) the monthly pension computed at
the time when he actually retires.
SEC. 13. Death Benefits. Upon the death of
a member who has paid at least thirty-six (36)
monthly contributions prior to the semester
of death, his primary beneficiaries shall be
entitled to the monthly pension: Provided,
That if he has no primary beneficiaries, his
secondary beneficiaries shall be entitled to
a lump sum benefit equivalent to thirty-six
(36) times the monthly pension. If he has
not paid the required thirty six (36) monthly
contributions, his primary or secondary

beneficiaries shall be entitled to a lump sum
benefit equivalent to the monthly pension
times the number of monthly contributions
paid to the SSS or twelve (12) times the
monthly pension, whichever is higher.
SEC. 13-A. Permanent Disability Benefits.
(a) Upon the permanent total disability of
a member who has paid at least thirty six
(36) monthly contributions prior to the
semester of disability, he shall be entitled
to the monthly pension: Provided, That
if he has not paid the required thirty-six
(36) monthly contributions, he shall be
entitled to a lump sum benefit equivalent
to the monthly pension times the number
of monthly contributions paid to the SSS
or twelve (12) times the monthly pension,
whichever is higher. A member who (1)
has received a lump sum benefit and
(2) is re-employed or has resumed self-
employment not earlier than one (1) year
from the date of his disability shall again
be subject to compulsory coverage and
shall be considered a new member.
(b) The monthly pension and dependents
pension shall be suspended upon the
reemployment or resumption of self-
employment or the recovery of the
disabled member from his permanent
total disability or his failure to present
himself for examination at least once a

year upon notice by the SSS.
(c) Upon the death of the permanent
total disability pensioner, his primary
beneficiaries as of the date of disability shall
be entitled to receive the monthly pension:
Provided, That if he has no primary
beneficiaries and he dies within sixty (60)
months from the start of his monthly
pension, his secondary beneficiaries
shall be entitled to a lump sum benefit
equivalent to the total monthly pensions
corresponding to the balance of the five-
year guaranteed period excluding the
dependents pension.
deemed permanent total:
1. Complete loss of sight of both eyes;
2. Loss of two limbs at or above the
ankle or wrists;
3. Permanent complete paralysis of
two limbs;
4. Brain injury resulting to incurable
imbecility or insanity; and
5. Such cases as determined and
approved by the SSS.
(e) If the disability is permanent partial, and
such disability occurs before thirty-six
(36) monthly contributions have been
paid prior to the semester of disability,
the benefit shall be such percentage
of the lump sum benefit described

in the preceding paragraph with due
regard to the degree of disability as the
Commission may determine.
(f) If the disability is permanent partial and
such disability occurs after thirty-six
(36) monthly contributions have been
paid prior to the semester of disability,
the benefit shall be the monthly pension
for permanent total disability payable
not longer than the period designated in
the following schedule:
Complete And Permanent Number Of

Loss Of Use Of Months
One thumb 10
One index finger 8
One middle finger 6
One ring finger 5
One little finger 3
One big toe 6
One hand 39
One arm 50
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 50
Sight of one eye 25
(g) The percentage degree of disability,

which is equivalent to the ratio that
the designated number of months
of compensability bears to seventy-
five (75), rounded to the next higher
integer, shall not be additive for
distinct, separate and unrelated
permanent partial disability, but shall
be additive for deteriorating and
related permanent partial disabilities,
to a maximum of one hundred percent
(100%), in which case the member
shall be deemed as permanently totally
disabled.
(h) In case of permanent partial disability,
the monthly pension benefit shall be
given in lump sum if it is payable for less
than twelve (12) months.
(i) For the purpose of adjudicating
retirement, death and permanent
total disability pension benefits,
contributions shall be deemed paid for
the months during which the member
received partial disability pension:
Provided, That such contributions
shall be based on his last contribution
prior to his disability.
(j) Should a member who is on partial
disability pension retire or die, his
disability pension shall cease upon his
retirement or death.
SEC. 13-B. Funeral Benefit. A funeral

grant equivalent to Twelve thousand pesos
(P12,000.00) shall be paid, in cash or in kind,
to help defray the cost of funeral expenses upon
the death of a member, including permanently
totally disabled member or retiree.
SEC.14. Sickness benefit.
(a) A member who has paid at least three (3)
monthly contributions in the twelve-
month period immediately preceding
the semester of sickness or injury and is
confined therefor for more than three (3)
days in a hospital or elsewhere with the
approval of the SSS, shall, for each day
of compensable confinement or fraction
thereof, be paid by his employer, or the
SSS, if such person is unemployed or
self-employed, a daily sickness benefit
equivalent to ninety percent (90%) of
his average daily salary credit, subject to
the following conditions:
(1) In no case shall the daily sickness
benefit be paid longer than one
hundred twenty (120) days in one
(1) calendar year, nor shall any
unused portion of the one hundred
twenty (120) days of sickness
benefit granted under this section
be carried forward and added to the
total number of compensable days
allowable in the subsequent year;
(2) The daily sickness benefit shall not

be paid for more than two hundred
forty (240) days on account of the
same confinement; and
(3) The employee member shall notify
his employer of the fact of his sickness
or injury within five (5) calendar days
after the start of his confinement
unless such confinement is in a
hospital or the employee became
sick or was injured while working or
within the premises of the employer
in which case notification to the
employer is not necessary: Provided,
That if the member is unemployed
or self-employed, he shall directly
notify the SSS of his confinement
within five (5) calendar days after
the start thereof unless such
confinement is in a hospital in
which case notification is also not
necessary: Provided, further, That in
cases where notification is necessary,
the confinement shall be deemed to
have started not earlier than the fifth
day immediately preceding the date
of notification.
(b) The compensable confinement shall
begin on the first day of sickness, and
the payment of such allowances shall be
promptly made by the employer every
regular payday or on the fifteenth and

last day of each month, and similarly
in the case of direct payment by the
SSS, for as long as such allowances are
due and payable: Provided, That such
allowance shall begin only after all sick
leaves of absence with full pay to the
credit of the employee member shall
have been exhausted.
(c) One hundred percent (100%) of the
daily benefits provided in the preceding
paragraph shall be reimbursed by the
SSS to said employer upon receipt of
satisfactory proof of such payment
and legality thereof: Provided, That
the employer has notified the SSS
of the confinement within five
(5) calendar days after receipt of
the notification from the employee
member: Provided, further, That if
the notification to the SSS is made by
the employer beyond five (5) calendar
days after receipt of the notification
from the employee member, said
employer shall be reimbursed
only for each day of confinement
starting from the tenth calendar day
immediately preceding the date of
notification to the SSS: Provided,
finally, that the SSS shall reimburse
the employer or pay the unemployed
member only for confinement within

the one-year period immediately
preceding the date the claim for
benefit or reimbursement is received
by the SSS, except confinement in a
hospital in which case the claim for
benefit or reimbursement must be
filed within one (1) year from the last
day of confinement.
(d) Where the employee member has
given the required notification but
the employer fails to notify the SSS of
the confinement or to file the claim
for reimbursement within the period
prescribed in this section resulting in
the reduction of the benefit or denial
of the claim such employer shall have
no right to recover the corresponding
daily allowance he advanced to the
employee member as required in this
Section.
(e) The claim of reimbursement shall
be adjudicated by the SSS within a
period of two (2) months from receipt
thereof: Provided, That should no
payment be received by the employer
within one (1) month after the period
prescribed herein for adjudication the
reimbursement shall thereafter earn
simple interest of one percent (1%)
per month until paid.
(f) The provisions regarding the

notification required of the member
and the employer as well as the period
within which the claim for benefit or
reimbursement may be filed shall apply
to all claims filed with the SSS.
SEC. 14-A. Maternity Leave Benefit. A
female member who has paid at least three
(3) monthly contributions in the twelve-
semester of her childbirth or miscarriage
shall be paid a daily maternity benefit
equivalent to one hundred percent (100%)
of her average daily salary credit for sixty
(60) days or seventy-eight (78) days in
case of caesarean delivery, subject to the
following conditions:
(a) That the employee shall have notified
her employer of her pregnancy and
the probable date of her childbirth,
which notice shall be transmitted
to the SSS in accordance with
the rules and regulations it may
provide;
(b) The full payment shall be advanced by
the employer within thirty (30) days
from the filing of the maternity leave
application;
(c) That payment of daily maternity benefits
shall be a bar to the recovery of sickness
benefits provided by this Act for the
same period for which daily maternity

benefits have been received;
(d) That the maternity benefits provided
under this section shall be paid only
for the first four (4) deliveries or
miscarriages;
(e) That the SSS shall immediately
reimburse the employer of one hundred
percent (100%) of the amount of
maternity benefits advanced to the
employee by the employer upon receipt
of satisfactory proof of such payment
and legality thereof; and
(f) That if an employee member should
give birth or suffer miscarriage without
the required contributions having been
remitted for her by her employer to the
SSS, or without the latter having been
previously notified by the employer of
the time of the pregnancy, the employer
shall pay to the SSS damages equivalent
to the benefits which said employee
member would otherwise have been
entitled to.
SEC. 15. Nontransferability of Benefits.
The SSS shall promptly pay the benefits
provided for in this Act to such persons
as may be entitled thereto in accordance
with the provisions of this Act: Provided,
That the SSS shall pay the retirement
benefits on the day of contingency to
qualified members who have submitted

the necessary documents at least six (6)
months before: Provided, further, That
the beneficiary who is a national of
a foreign country which does not
extend benefits to a Filipino beneficiary
residing in the Philippines, or which is
not recognized by the Philippines, shall
not be entitled to receive any benefit
under this Act: Provided, further, That
notwithstanding the foregoing, where the
best interest of the SSS will be served,
the Commission may direct payments
without regard to nationality or country
of residence: Provided, further, That if the
recipient is a minor or a person incapable
of administering his own affairs, the
Commission shall appoint a representative
under such terms and conditions as it may
deem proper: Provided, further, That
such appointment shall not be necessary
in case the recipient is under the custody
of or living with the parents or spouse
of the member in which case the benefits
shall be paid to such parents or spouse, as
representative payee of the recipient. Such
benefits are not transferable and no power
of attorney or other document executed
by those entitled thereto, in favor of any
agent, attorney or any other person for
the collection thereof on their behalf
shall be recognized, except when they are

physically unable to collect personally such
benefits: Provided, further, That in case of
death benefits, if no beneficiary qualifies
under this Act, said benefits shall be paid
to the legal heirs in accordance with the
law of succession.
SEC. 16. Exemption from Tax, Legal
Process and Lien. All laws to the contrary
notwithstanding, the SSS and all its assets
and properties, all contributions collected
and all accruals thereto and income or
investment earnings therefrom, as well as all
supplies, equipment, papers or documents
shall be exempt from any tax, assessment,
fee, charge, or customs or import duty;
and all benefit payments made by the SSS
shall likewise be exempt from all kinds
of taxes, fees or charges and shall not
be liable to attachments, garnishments,
levy or seizure by or under any legal or
equitable process whatsoever, either before
or after receipt by the person or persons
entitled thereto, except to pay any debt of
the member to the SSS. No tax measure
of whatever nature enacted shall apply
to the SSS, unless it expressly revokes the
declared policy of the State in Section 2
hereof granting tax-exemption to the SSS.
Any tax assessment imposed against the
SSS shall be null and void.
SEC. 17. Fee of Agents, Attorneys,

etc. No agent, attorney or other person
in charge of the preparation, filing or
pursuing any claim for benefit under this
Act shall demand or charge for his services
any fee, and any stipulation to the contrary
shall be null and void. The retention or
deduction of any amount from any benefit
granted under this Act for the payment
of fees for such services is prohibited:
Provided, however, That any member of
the Philippine Bar who appears as counsel
in any case heard by the Commission shall
be entitled to attorneys fees not exceeding
ten percent (10%) of the benefits awarded
by the Commission, which fees shall not
be payable before the actual payment of
the benefits, and any stipulation to the
contrary shall be null and void.
Any violation of the provisions of this
Section shall be punished by a fine of not
less than Five hundred pesos (P500.00) nor
more than Five thousand pesos (P5,000.00),
or imprisonment for not less than six (6)
months nor more than one (1) year, or both,
at the discretion of the court.
SEC. 18. Employees Contribution. (a)
Beginning as of the last day of the calendar
month when an employees compulsory
coverage takes effect and every month
thereafter during his employment, the
employer shall deduct and withhold from

such employees monthly salary, wage,
compensation or earnings, the employees
contribution in an amount corresponding to
his salary, wage, compensation or earnings
during the month in accordance with the
following schedule:
The foregoing schedule of contribution shall also apply to self-employed

and voluntary members.
The maximum monthly salary credit shall

be Nine thousand pesos (P9,000.00) effective
January Nineteen hundred and ninety six
(1996): Provided, That it shall be increased by
One thousand pesos (P1,000.00) every year
thereafter until it shall have reached Twelve
thousand pesos (P12,000.00) by Nineteen
hundred and ninety nine (1999): Provided,
further, That the minimum and maximum
monthly salary credits as well as the rate
of contributions may be fixed from time
to time by the Commission through rules
and regulations taking into consideration
actuarial calculations and rate of benefits,
subject to the approval of the President of
the Philippines.
SEC. 19. Employers Contributions.
(a) beginning as of the last day of the month
when an employees compulsory coverage
takes effect and every month thereafter
during his employment, his employer shall
pay, with respect to such covered employee,
the employers contribution in accordance
with the schedule indicated in Section
Eighteen of this Act. Notwithstanding any
contract to the contrary, an employer shall
not deduct, directly or indirectly, from the
compensation of his employees covered by
the SSS or otherwise recover from them
the employers contributions with respect
to such employees.
(b) The remittance of such contributions

by the employer shall be supported
by a quarterly collection list to be
submitted to the SSS at the end of
each calendar quarter indicating the
correct ID number of the employer,
the correct names and SSS numbers
of the employees and the total
contributions paid for their account
during the quarter.
SEC. 19-A. Contribution of the Self-employed
Member. The contributions to the SSS of the
self- employed member shall be determined in
accordance with Section Eighteen of this Act:
Provided, That the monthly earnings declared
by the self-employed member at the time of his
registration with the SSS shall be considered
as his monthly compensation and he shall pay
both the employer and employee contributions:
Provided, further, That the contributions of
self-employed persons earning One thousand
pesos (P1,000.00) monthly or below may be
reduced by the Commission.
The monthly earnings declared by the
self-employed member at the time of
his registration shall remain the basis
of his monthly salary credit, unless he
makes another declaration of his monthly
earnings, in which case such latest
declaration becomes the new basis of his
monthly salary credit.
SEC. 20. Government Contribution. As

the contribution of the Government to the
operation of the SSS, Congress shall annually
appropriate out of any funds in the National
Treasury not otherwise appropriated, the
necessary sum or sums to meet the estimated
expenses of the SSS for each ensuing year.
In addition to this contribution, Congress
shall appropriate from time to time such
sum or sums as may be needed to assure the
maintenance of an adequate working balance
of the funds of the SSS as disclosed by
suitable periodic actuarial studies to be made
of the operations of the SSS.
SEC. 21. Government Guarantee. 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 SSS.
SEC. 22. Remittance of Contributions.
(a) The contribution imposed in the
preceding section shall be remitted to the
SSS within the first ten (10) days of each
calendar month following the month for
which they are applicable or within such
time as the Commission may prescribe.
Every employer required to deduct and to
remit such contributions shall be liable for
their payment and if any contribution is
not paid to the SSS as herein prescribed,
he shall pay besides the contribution a

penalty thereon of three percent (3%)
per month from the date the contribution
falls due until paid. If deemed expedient
and advisable by the Commission, the
collection and remittance of contributions
shall be made quarterly or semi-annually
in advance, the contributions payable
by the employees to be advanced by
their respective employers: Provided, That
upon separation of an employee, any
contribution so paid in advance but not
due shall be credited or refunded to his
employer.
(b) The contributions payable under this Act in
cases where an employer refuses or neglects
to pay the same shall be collected by the
SSS in the same manner as taxes are made
collectible under the National Internal
Revenue Code, as amended. Failure or
refusal of the employer to pay or remit the
contributions herein prescribed shall not
prejudice the right of the covered employee
to the benefits of the coverage.
The right to institute the necessary
action against the employer may be
commenced within twenty (20) years
from the time the delinquency is known
or the assessment is made by the SSS, or
from the time the benefit accrues, as the
case may be.
(c) Should any person, natural or juridical,

defaults in any payment of contributions,
the Commission may also collect the same
in either of the following ways:
1. By an action in court, which shall hear
and dispose of the case in preference to
any other civil action; or
2. By issuing a warrant to the Sheriff
of any province or city commanding
him to levy upon and sell any real
and personal property of the debtor.
The Sheriffs sale by virtue of said
warrant shall be governed by the
same procedure prescribed for
executions against property upon
judgments by a court of record.
(d) The last complete record of monthly
contributions paid by the employer or
the average of the monthly contributions
paid during the past three (3) years as
of the date of filing of the action for
collection shall be presumed to be the
monthly contributions payable by and
due from the employer to the SSS
for each of the unpaid month, unless
contradicted and overcome by other
evidence: Provided, That the SSS
shall not be barred from determining
and collecting the true and correct
contributions due the SSS even after full
payment pursuant to this paragraph,
nor shall the employer be relieved of his

liability under Section Twenty-eight of
this Act.
SEC. 22-A. Remittance of Contributions
of Self-employed Members. Self-employed
members shall remit their monthly
contributions quarterly on such dates and
schedules as the Commission may specify
through rules and regulations: Provided,
That no retroactive payment of contributions
shall be allowed, except as provided in this
Section.
SEC. 23. Method of Collection and
Payment. The SSS shall require a complete
and proper collection and payment of
contributions and proper identification of the
employer and the employee. Payment may
be made in cash, checks, stamps, coupons,
tickets, or other reasonable devices that the
Commission may adopt.
SEC. 24. Employment Records and
Reports.
(a) Each employer shall immediately report
to the SSS the names, ages, civil status,
occupations, salaries and dependents
of all his employees who are subject to
compulsory coverage: Provided, That if an
employee subject to compulsory coverage
should die or become sick or disabled or
reach the age of sixty (60) without the SSS
having previously received any report
or written communication about him

from his employer, the said employer
shall pay to the SSS damages equivalent
to the benefits to which said employee
member would have been entitled had
his name been reported on time by the
employer to the SSS, except that in case
of pension benefits, the employer shall be
liable to pay the SSS damages equivalent
to the accumulated pension due as of the
date of settlement of the claim or to
the five (5) years pension, whichever
is higher, including dependents
pension: Provided, further, That if the
contingency occurs within thirty (30)
days from the date of employment,
the employer shall be relieved of his
liability for damages: Provided, further,
That any person or entity engaging the
services of an independent contractor
shall be subsidiarily liable with such
contractor for any civil liability incurred
by the latter under this act: Provided,
finally, That the same person or entity
engaging the services of an independent
contractor shall require such contractor
to post a surety bond to guarantee the
payment of the workers benefits.
(b) Should the employer misrepresent
the true date of employment of the
employee member or remit to the SSS
contributions which are less than those

required in this Act or fail to remit any
contribution due prior to the date of
contingency, resulting in a reduction of
benefits such employer shall pay to the
SSS damages equivalent to the difference
between the amount of benefit to which
the employee member of his beneficiary
is entitled had the proper contributions
been remitted to the SSS and the amount
payable on the basis of the contributions
actually remitted: Provided, That if the
employee member or his beneficiary is
entitled to pension benefits, the damages
shall be equivalent to the accumulated
pension due as of the date of settlement
of the claim or to the five (5) years
pension, whichever is higher, including
dependents pension.
In addition to the liability mentioned
in the preceding paragraphs (a) and (b)
hereof, the employer shall also be liable
for the payment of the corresponding
unremitted contributions and penalties
thereon.
(c) The records and reports duly
accomplished and submitted to the SSS
by the employer or the member, as the
case may be, shall be kept confidential
by the SSS except in compliance with
a subpoena duces tecum issued by the
Courts, shall not be divulged without the

consent of the SSS President or any official
of the SSS duly authorized by him, shall
be presumed correct as to the data and
other matters stated therein, unless the
necessary corrections to such records and
reports have been properly made by the
parties concerned before the right to the
benefit being claimed accrues, and shall
be made the basis for the adjudication of
the claim. If as a result of such adjudication
the SSS in good faith pays a monthly
pension to a beneficiary who is inferior in
right to another beneficiary or with whom
another beneficiary is entitled to share,
such payments shall discharge the SSS
from liability unless and until such other
beneficiary notifies the SSS of his claim
prior to the payments.
(d) Every employer shall keep true and
accurate work records for such period
and containing such information as the
Commission may prescribe, in addition to
an Annual Register of New and Separated
Employees which shall be secured from
the SSS wherein the employer shall enter
on the first day of employment or on the
effective date of separation, the names of
the persons employed or separated from
employment, their SSS numbers, and
such other data that the Commission
may require and said annual register shall

be submitted to the SSS in the month of
January of each year. Such records shall
be open for inspection by the SSS or its
authorized representatives quarterly or as
often as the SSS may require.
The SSS may also require each employer
to submit, with respect to the persons in
his employ, reports needed for the effective
administration of this Act.
(e) Each employer shall require,as a condition
to employment, the presentation of
a registration number secured by the
prospective employee from the SSS in
accordance with such procedure as the
SSS may adopt: Provided, That in
case of employees who have earlier
been assigned registration numbers by
virtue of a previous employment, such
numbers originally assigned to them
should be used for purposes of this
Section: Provided, further, That the
issuance of such registration numbers by
the SSS shall not exempt the employer
from complying with the provisions of
paragraph (a) of this Section.
(f) Notwithstanding any law to the contrary,
microfilm, or non-erasable optical disk
and other similar archival media copies
of original SSS records and reports,
or copies of such records and reports,
duly certified by the official custodian

thereof, shall have the same evidentiary
value as the originals and be admissible
as evidence in all legal proceedings.
(g) Notwithstanding any law to the contrary,
local government units shall, prior to
issuing any annual business license or
permit, require submission of certificate
of SSS coverage and compliance with the
provisions of this Act: Provided, That the
certification or clearance shall be issued
by the SSS within five (5) working days
from receipt of the request.
SEC. 24-A. Report and Registration
of the Self-employed Member. Each
covered self-employed member shall, within
thirty (30) days from the first day he started
the practice of his profession or business
operations, register and report to the SSS his
name, age, civil status, occupation, average
monthly net income and his dependents.
SEC. 25. Deposit and Disbursements.
All money paid to or collected by the SSS
every year under this Act, and all accruals
thereto, shall be deposited, administered and
disbursed in the same manner and under
the same conditions and requirements as
provided by law for other public special funds:
Provided,That not more than twelve (12%)
percent of the total yearly contributions
plus three (3%) percent of other revenues
shall be disbursed for administrative and

operational expenses such as salaries and
wages, supplies and materials, depreciation,
and the maintenance of offices of the SSS:
Provided, further, That if the expenses in
any year are less than the maximum amount
permissible, the difference shall not be availed
of as additional expenses in the following
years.
SEC. 26. Investment of Reserve Funds. All
revenues of the SSS that are not needed to meet
the current administrative and operational
expenses incidental to the carrying out of this
Act shall be accumulated in a fund to be known
as the Reserve Fund. Such 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 skill, care, prudence and diligence necessary
under the circumstances then prevailing that
a prudent man acting in 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 in line
with the basic principles of safety, good yield
and liquidity, the Commission shall invest the
funds to earn an annual income not less than
the average rates of treasury bills or any other
acceptable market yield indicator 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;
(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 SSS 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
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
Bangko Sentral ng Pilipinas to finance
loans to private corporations doing
business in the Philippines, including
schools, hospitals, small-and-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, finally, 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 such as salary, educational,
livelihood, marital, calamity and
emergency loans: Provided, That not
more than thirty five percent (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
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;
(g) In real estate property, including
shares of stocks involving real estate
property, and investments secured
by first 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
public: 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, finally, That investments
in other income- earning projects and
investments secured by first mortgages 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
institution 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 SSS 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
thirty percent (30%) of the Investment
Reserve Fund;
(i) In preferred or common shares of stocks
listed or about to be listed in the stock
exchange or options or warrants to such
stocks 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
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 thirty percent
(30%) of the Investment Reserve Fund;
(j) In domestic or foreign mutual funds in
existence for at least three (3) years and
payment of dividends at least once over
the same period: 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
first 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;
(k) In foreign currency deposits or triple A
foreign currency denominated debts,
prime and non-speculative equities,
and other Bangko Sentral ng Pilipinas
approved financial instruments or other
assets issued in accordance with 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
and a record of regular dividend pay-out
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 seven and one-half percent (7.5%)
of the Investment Reserve Fund;
(l) In loans secured by such collaterals
like cash, government 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 (l)
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 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 in 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. 26-A. Fund Managers. As part of its

investment operations, the SSS may appoint
local or, in the absence thereof, foreign fund
managers to manage the Investment Reserve
Fund, as it may deem appropriate.
SEC. 26-B. Mortgagor Insurance
Account.
(a) As part of its investment operations, the SSS
shall act as insurer of all or part of its interest
on SSS properties mortgaged to the SSS,
or lives of mortgagors whose properties
are mortgaged to the SSS. For this
purpose, the SSS shall establish a separate
account to be known as the Mortgagors
Insurance Account. All amounts received
by the SSS in connection with the aforesaid
insurance operations shall be placed in
the Mortgagors Insurance Account. The
assets and liabilities of the Mortgagors
Insurance Account shall at all times be
clearly identifiable and distinguishable
from the assets and liabilities in all other
accounts of the SSS. Notwithstanding any
provision of law to the contrary, the assets
held in the Mortgagors Insurance Account
shall not be chargeable with the liabilities
arising out of any other business the SSS
may conduct but shall be held and applied
exclusively for the benefit of the owners
or beneficiaries of the insurance contracts
issued by the SSS under this paragraph.
(b) The SSS may insure any of its interest or

part thereof with any private company or
reinsurer. The Insurance Commission or
its authorized representatives shall make
an examination into the financial condition
and methods of transacting business of the
SSS at least once in two (2) years, but such
examination shall be limited to the insurance
operation of the SSS as authorized under
this paragraph and shall not embrace the
other operations of the SSS; and the report
of said examination shall be submitted to
the Commission and a copy thereof shall
be furnished the Office of the President
of the Philippines within a reasonable
time after the close of the examination:
Provided, that for each examination, the
SSS shall pay to the Insurance Commission
an amount equal to the actual expenses of
the Insurance Commission in the conduct
of the examination, including the salaries
of the examiners and of the actuary of the
Insurance Commission who have been
assigned to make such examination for
the actual time spent in said examination:
Provided, further, 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.
SEC. 27. Records and Reports. The SSS

President shall keep and cause to keep records
of operations of the funds of the SSS and of
disbursements thereof and all accounts of
payments made out of said funds. During the
month of January each year, the SSS President
shall prepare for submission to the President
of the Philippines and to the Congress of the
Philippines a report of operations of the SSS
during the preceding year, including statistical
data on the number of persons covered and
benefited, their occupations and employment
status, the duration and amount of benefits
paid, the finances of the SSS at the close of the
said year, and recommendations. He shall also
cause to be published in two (2) newspapers
of general circulation in the Philippines a
synopsis of the annual report, showing in
particular the status of the finances of the SSS
and the benefits administered.
SEC. 28. Penal Clause.
(a) Whoever, for the purpose of causing any
payment to be made under this Act, or under
an agreement thereunder, where none is
authorized to be paid, shall make or cause to
be made false statement or representation
as to any compensation paid or received,
or whoever makes or causes to be made
any false statement of a material fact in any
claim for any benefit payable under this
Act, or application for loan with the SSS,
or whoever makes or causes to be made any

false statement, representation, affidavit or
document in connection with such claim or
loan, shall suffer the penalties provided for
in Article One hundred seventy two of the
Revised Penal Code
(b) Whoever shall obtain or receive any money
or check under this Act or any agreement
thereunder, without being entitled thereto
with intent to defraud any member,
employer or the SSS, shall be fined not
less than Five thousand pesos (P5,000.00)
nor more than Twenty thousand pesos
(P20,000.00) and imprisoned for not less
than six (6) years and one (1) day nor more
than twelve (12) years.
(c) Whoever buys, sells, offers for sale, uses,
transfers or takes or gives in exchange,
or pledges or gives in pledge, except as
authorized in this Act or in regulations
made pursuant thereto, any stamp,
coupon, ticket, book or other device,
prescribed pursuant to Section Twenty-
three hereof by the Commission for the
collection or payment of contributions
required herein, shall be fined not less than
Five thousand pesos (P5,000.00) nor more
than twenty thousand pesos (P20,000.00),
or imprisoned for not less than six (6) years
and one (1) day nor more than twelve (12)
years, or both, at the discretion of the court.
(d) Whoever, with intent to defraud, alters,

forges, makes or counterfeits any stamp,
coupon, ticket, book or other device
prescribed by the Commission for the
collection or payment of any contribution
required herein, or uses, sells, lends, or has
in his possession any such altered, forged
or counterfeited materials, or makes, uses,
sells or has in his possession any such
altered, forged material in imitation of the
material used in the manufacture of such
stamp, coupon, ticket, book or other device,
shall be fined not less than Five thousand
pesos (P5,000.00) nor more than Twenty
thousand pesos (P20,000.00), or imprisoned
for not less than six (6) years and one (1) day
nor more than twelve (12) years, or both, at
the discretion of the court.
(e) Whoever fails or refuses to comply
with the provisions of this Act or with
the rules and regulations promulgated
by the Commission, shall be punished
by a fine of not less than Five thousand
pesos (P5,000.00) nor more than
Twenty thousand pesos (P20,000.00),
or imprisonment for not less than six
(6) years and one (1) day nor more than
twelve (12) years or both, at the discretion
of the court: Provided, That where the
violation consists in failure or refusal to
register employees or himself, in case of
the covered self-employed, or to deduct

contributions from the employees
compensation and remit the same to the
SSS, the penalty shall be a fine of not less
than Five thousand pesos (P5,000.00)
(P20,000.00) and imprisonment for not
less than six (6) years and one (1) day nor
more than twelve (12) years.
(f) If the act or omission penalized by this
Act be committed by an association,
partnership, corporation or any other
institution, its managing head, directors
or partners shall be liable to the penalties
provided in this Act for the offense.
(g) Any employee of the SSS who receives
or keeps funds or property belonging,
payable or deliverable to the SSS and
who shall appropriate the same, or
shall take or misappropriate, or shall
consent or through abandonment
or negligence shall permit any other
person to take such property or funds,
wholly or partially, or shall otherwise be
guilty of misappropriation of such funds
or property, shall suffer the penalties
provided in Article Three Hundred
Fifteen of the Revised Penal Code.
(h) Any employer who after deducting the
monthly contribution or loan amortizations
from his employees compensation, fails
to remit the said deductions to the SSS

within thirty (30) days from the date they
became due shall be presumed to have
misappropriated such contributions or loan
amortizations and shall suffer the penalties
provided in Article Three Hundred Fifteen
of the Revised Penal Code.
(i) Criminal action arising from a violation of
the provisions of this Act may be commenced
by the SSS or the employee concerned either
under this Act or in appropriate cases under
the Revised Penal Code: Provided, That such
criminal action may be filed by the SSS in the
city or municipality where the SSS office is
located if the violation was committed within
its territorial jurisdiction or in Metro Manila,
at the option of the SSS.
SE C. 29 . Go vern m ent Aid. The
establishment of the SSS shall not disqualify
the members and employers from receiving
such government assistance, financial or
otherwise, as may be provided.
SEC. 30. 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 installments
within a period of not more than twelve (12)
months 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.
Section 2. Separability Clause. - If any
provision of this Act is declared invalid, the
other provisions not affected thereby shall
remain valid.
Section 3. 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 of
this Act.
Section 4. Effectivity Clause. - This Act shall
take effect fifteen (15) days after its complete
publication in the Official Gazette or in at
least two (2) national newspapers of general
circulation whichever comes earlier.
May 01, 1997


AN ACT AMENDING PRESIDENTIAL DECREE
NO. 1146, AS AMENDED, EXPANDING
AND INCREASING THE COVERAGE AND
BENEFITS OF THE GOVERNMENT SERVICE
INSURANCE SYSTEM, INSTITUTING
REFORMS THEREIN AND FOR OTHER
PURPOSES
Section 1. Presidential Decree No. 1146, as amended,

otherwise known as the Revised Government
Service Insurance Act of 1977, is hereby
further amended to read as follows:
Section 1. Title. The short title of
this Act shall be: The Government Service
Insurance System Act of 1997.
A. DEFINITIONS
Section 2. Definition of Terms. Unless

the context otherwise indicates, the following
terms shall mean:
(a) GSIS The Government
Service Insurance System created by
Commonwealth Act No. 186;
(b) Board The Board of Trustees of the
Government Service Insurance System;
(c) Employer The national government,
its political subdivisions, branches,
agencies or instrumentalities,
including government-owned or
controlled corporations, and financial

institutions with original charters, the
constitutional commissions and the
judiciary;
(d) Employee or Member Any person,
receiving compensation while in the
service of an employer as defined herein,
whether by election or appointment,
irrespective of status of appointment,
including barangay and sanggunian
officials;
(e) Active Member A member who is
not separated from the service;
(f) Dependents Dependents shall
be the following: (a) the legitimate
spouse dependent for support upon the
member or pensioner; (b) the legitimate,
legitimated, legally adopted child,
including the illegitimate child, who
is unmarried, not gainfully employed,
not over the age of majority, or is over
the age of majority but incapacitated
and incapable of self-support due to
a mental or physical defect acquired
prior to age of majority; and (c) the
parents dependent upon the member
for support;
(g) Primary beneficiaries The
legal dependent spouse until he/
she remarries and the dependent
children;
(h) Secondary beneficiaries The

dependent parents and, subject to the
restrictions on dependent children, the
legitimate descendants;
(i) Compensation The basic pay
or salary received by an employee,
pursuant to his election/appointment,
excluding per diems, bonuses,
overtime pay, honoraria, allowances
and any other emoluments received
in addition to the basic pay which
are not integrated into the basic pay
under existing laws;
(j) Contribution The amount payable
to the GSIS by the member and the
employer in accordance with Section 5
of this Act;
(k) Current Daily Compensation The
actual daily compensation or the actual
monthly compensation divided by the
number of working days in the month
of contingency but not to exceed
twenty-two (22) days;
(l) Average Monthly Compensation
(AMC) The quotient arrived at after
dividing the aggregate compensation
received by the member during his
last thirty-six (36) months of service
preceding his separation/retirement/
disability/death by thirty-six (36),
or by the number of months he
received such compensation if he has

less than thirty-six (36) months of
service: Provided, That the average
monthly compensation shall in no
case exceed the amount and rate as
may be respectively set by the Board
under the rules and regulations
implementing this Act as determined
by the actuary of the GSIS:
Provided, further, That initially
the average monthly compensation
shall not exceed Ten thousand pesos
(P10,000.00), and premium shall be
nine percent (9%) and twelve percent
(12%) for employee and employer
covering the AMC limit and below;
and two percent (2%) and twelve
percent (12%) for employee and
employer covering the compensation
above the AMC limit;
(m) Revalu ed avera ge m ont hly
compensation An amount equal to
one hundred seventy percent (170%)
of the first One thousand pesos
(P1,000) of the average monthly
compensation plus one hundred
percent (100%) of the average
monthly compensation in excess of
One thousand pesos (P1,000);
(n) Lump sum The basic monthly
pension multiplied by sixty (60);
(o) Pensioner Any person receiving

old-age or permanent total disability
pension or any person who has received
the lump sum excluding one receiving
survivorship pension benefits as defined
in Section 20 of this Act;
(p) Gainful Occupation Any productive
activity that provided the member with
income at least equal to the minimum
compensation of government employees;
(q) Disability Any loss or impairment
of the normal functions of the physical
and/or mental faculty of a member
which reduces or eliminates his/her
capacity to continue with his/her
current gainful occupation or engage
in any other gainful occupation;
(r) Total Disability Complete incapacity to
continue with his present employment
or engage in any gainful occupation due
to the loss or impairment of the normal
functions of the physical and/or mental
faculties of the member;
(s) Permanent Total Disability Accrues
or arises when recovery from the
impairment mentioned in Section 2(Q)
is medically remote;
(t) Temporary Total Disability Accrues or
arises when the impaired physical and/or
mental faculties can be rehabilitated and/
or restored to their normal functions;
(u)
Permanent Partial Disability
Accrues or arises upon the irrevocable
loss or impairment of certain
portion/s of the physical faculties,
despite which the member is able to
pursue a gainful occupation.
B. MEMBERSHIP IN THE GSIS
Section 3. Compulsory Membership.

Membership in the GSIS shall be
compulsory for all employees receiving
compensation who have not reached the
compulsory retirement age, irrespective of
employment status, except members of the
Armed Forces of the Philippines and the
Philippine National Police, subject to the
condition that they must settle first their
financial obligation with the GSIS, and
contractuals who have no employer and
employee relationship with the agencies
they serve.
Except for the members of the judiciary
and constitutional commissions who shall
have life insurance only, all members of the
GSIS shall have life insurance, retirement,
and all other social security protection such
as disability, survivorship, separation, and
unemployment benefits.
Section 4. Effect of Separation from
the Service. A member separated
from the service shall continue to be a

member, and shall be entitled to whatever
benefits he has qualified to in the event
of any contingency compensable under
this Act.
C. SOURCES OF FUNDS
Section 5. Contributions.
(a) It shall be mandatory for the member
and the employer to pay the monthly
contributions specified in the following
schedule:
Members of the judiciary and
constitutional commissioners shall pay
three percent (3%) of their monthly
compensation as personal share, and
their employers a corresponding
three percent (3%) share for their life
insurance coverage.
Monthly Compensation Percentage of Monthly

Compensation Payable by
Member Employer
I . M a x i m u m Av e r a g e 9.0% 12.0%
Monthly Compensation
(AMC) Limit and Below
II. Over the Maximum AMC - 9.0% -
Limit - 2.0% -
- Up to the Maximum - 9.0% - 12.0%
AMC Limit - -
- In Excess of the AMC - 2.0% - 12.0%
Limit
(b) The employer shall include in its annual

appropriation the necessary amounts
for its share of the contributions
indicated above, plus any additional
premiums that may be required on
account of the hazards or risks of its
employees occupation.
(c) It shall be mandatory and compulsory
for all employers to include the payment
of contributions in their annual
appropriations. Penal sanctions shall
be imposed upon employers who fail to
include the payment of contributions in
their annual appropriations or otherwise
fail to remit the accurate/exact amount
of contributions on time, or delay the
remittance of premium contributions
to the GSIS. The heads of offices and
agencies shall be administratively
liable for non-remittance or delayed
remittance of premium contributions
to the GSIS.
Section 6. Collection and Remittance of
Contributions.
(a) The employer shall report to the GSIS
the names of all its employees, their
corresponding employment status,
positions, salaries and such other
pertinent information, including
subsequent changes therein, if any,
as may be required by the GSIS; the
employer shall deduct each month from

the monthly salary or compensation of
each employee the contribution payable
by him in accordance with the schedule
prescribed in the rules and regulations
implementing this Act.
(b) Each employer shall remit directly
to the GSIS the employees and
employers contributions within the
first ten (10) days of the calendar month
following the month to which the
contributions apply. The remittance
by the employer of the contributions
to the GSIS shall take priority over
and above the payment of any and all
obligations, except salaries and wages
of its employees.
Section 7. Interests on Delayed
Remittances. Agencies which delay the
remittance of any and all monies due the
GSIS shall be charged interests as may be
prescribed by the Board but not less than
two percent (2%) simple interest per month.
Such interest shall be paid by the employers
concerned.
Section 8. Government Guarantee.
The government of the Republic of
the Philippines hereby guarantees the
fulfillment of the obligations of the
GSIS to its members as and when they
fall due.
D. BENEFITS
Section 9. Computation of the Basic

Monthly Pension.
(a) the basic monthly pension is equal to:
1) thirty-seven and one-half percent
(37.5%) of the revalued average
monthly compensation; plus
2) two and one-half percent
(2.5%) of said revalued average
monthly compensation for
each year of service in excess
of fifteen (15) years: Provided,
That the basic monthly pension
shall not exceed ninety percent
(90%) of the average monthly
compensation.
(b) The basic monthly pension may be
adjusted upon the recommendation
of the President and General
Manager of the GSIS and approved
by the President of the Philippines
in accordance with the rules and
regulations prescribed by the GSIS:
Provided, however, That the basic
monthly pension shall not be less than
One thousand and three hundred
pesos (P1,300.00): Provided, further,
That the basic monthly pension for
those who have rendered at least
twenty (20) years of service after the
effectivity of this Act shall not be

less than Two thousand four hundred
pesos (P2,400.00) a month.
Section 10.Computation of Service.
(a) The computation of service for the
purpose of determining the amount of
benefits payable under this Act shall be
from the date of original appointment/
election, including periods of service
at different times under one or more
employers, those performed overseas
under the authority of the Republic
of the Philippines, and those that
may be prescribed by the GSIS in
coordination with the Civil Service
Commission.
(b) All service credited for retirement,
resignation or separation for which
corresponding benefits have been
awarded under this Act or other laws shall
be excluded in the computation of service
in case of reinstatement in the service of
an employer and subsequent retirement
or separation which is compensable under
this Act.
For the purpose of this section the term
service shall include full time service with
compensation: Provided, That part time and
other services with compensation may be
included under such rules and regulations as
may be prescribed by the GSIS.
SEPARATION BENEFITS
Section 11. Separation Benefits. The

separation benefit shall consist of:
(a) a cash payment equivalent to one
hundred percent (100%) of his average
monthly compensation for each year
of service he paid contributions, but
not less than Twelve thousand pesos
(P12,000) payable upon reaching sixty
(60) years of age or upon separation,
whichever comes later: Provided, That
the member resigns or separates from
the service after he has rendered at least
three (3) years of service but less than
fifteen (15) years; or
(b) A cash payment equivalent to eighteen
(18) times his basic monthly pension
payable at the time of resignation or
separation, plus an old-age pension
benefit equal to the basic monthly
pension payable monthly for life
upon reaching the age of sixty (60):
Provided, That the member resigns
or separates from the service after
he has rendered at least fifteen (15)
years of service and is below sixty (60)
years of age at the time of resignation
or separation.
Section 12. Unemployment or Involuntary
Separation Benefits. Unemployment
benefits in the form of monthly cash

payments equivalent to fifty percent (50%)
of the average monthly compensation shall
be paid to a permanent employee who is
involuntarily separated from the service
due to the abolition of his office or position
usually resulting from reorganization:
Provided, That he has been paying integrated
contributions for at least one (1) year prior
to separation. Unemployment benefits shall
be paid in accordance with the following
schedule:
Contributions Made Benefit Duration
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3
months
months
months
months
The first payment shall be equivalent to two
(2) monthly benefits. A seven-day (7) waiting
period shall be imposed on succeeding
monthly payments.
All accumulated unemployment benefits
paid to the employee during his entire
membership with the GSIS shall be
deducted from voluntary separation
benefits.
The GSIS shall prescribe the detailed

guidelines in the operationalization of
this section in the rules and regulations
implementing this Act.
RETIREMENT BENEFITS
Section 13. Retirement Benefits.

(a) Retirement benefit shall be:
(1) the lump sum payment as defined
in this Act payable at the time
of retirement plus an old-age
pension benefit equal to the basic
monthly pension payable monthly
for life, starting upon expiration
of the five-year (5) guaranteed
period covered by the lump sum;
or
(2) cash payment equivalent to
eighteen (18) months of his
basic monthly pension plus
monthly pension for life payable
immediately with no five-year (5)
guarantee.
(b) Unless the service is extended by
appropriate authorities, retirement
shall be compulsory for an employee at
sixty-five (65) years of age with at least
fifteen (15) years of service: Provided,
That if he has less than fifteen (15)
years of service, he may be allowed to
continue in the service in accordance

with existing civil service rules and
regulations.
Section 13-A. Conditions for Entitlement.
A member who retires from the service
shall be entitled to the retirement benefits in
paragraph (a) of Section 13 hereof: Provided,
That:
(1) he has rendered at least fifteen (15) years
of service;
(2) he is at least sixty (60) years of age at the
time of retirement; and
(3) he is not receiving a monthly pension
benefit from permanent total disability.
Section 14. Periodic Pension Adjustment.
The monthly pension of all pensioners
including all those receiving survivorship
pension benefits shall be periodically
adjusted as may be recommended by the
GSIS actuary and approved by the Board
in accordance with the rules and regulations
prescribed by the GSIS.
PERMANENT DISABILITY BENEFITS
Section 15. General Conditions for

Entitlement. A member who suffers
permanent disability for reasons not
due to his grave misconduct, notorious
negligence, habitual intoxication, or
willful intention to kill himself or another,
shall be entitled to the benefits provided

for under Sections 16 and 17 immediately
following, subject to the corresponding
conditions therefor.
Section 16. Permanent Total Disability
Benefits.
(a) If the permanent disability is total, he
shall receive a monthly income benefit
for life equal to the basic monthly
pension effective from the date of
disability: Provided, That:
(1) he is in the service at the time
of disability; or
(2) if separated from the service, he
has paid at least thirty-six (36)
monthly contributions within the
five (5) year period immediately
preceding his disability, or
has paid a total of at least one
hundred eighty (180) monthly
contributions, prior to his
disability: Provided, further, That
if at the time of disability, he was
in the service and has paid a total
of at least one hundred eighty
(180) monthly contributions, in
addition to the monthly income
benefit, he shall receive a cash
payment equivalent to eighteen
(18) times his basic monthly
pension: Provided, finally, That
a member cannot enjoy the

monthly income benefit for
permanent disability and the old-
age retirement simultaneously.
(b) If a member who suffers permanent total
disability does not satisfy conditions (1)
and (2) in paragraph (a) of this section
but has rendered at least three (3) years
service at the time of his disability, he shall
be advanced the cash payment equivalent
to one hundred percent (100%) of his
average monthly compensation for each
year of service he paid contributions, but
not less than Twelve Thousand pesos
(P12,000) which should have been his
separation benefit.
(c) Unless the member has reached the
minimum retirement age, disability
benefit shall be suspended when:
(1) he is reemployed or
(2) he recovers from disability as
determined by the GSIS, whose
decision shall be final and binding;
or
(3) he fails to present himself for
medical examination when required by
the GSIS.
deemed total and permanent:
(1) complete loss of sight of both
eyes;
(2) loss of two (2) limbs at or above

the ankle or wrist;
(3) permanent complete paralysis
of two(2) limbs;
(4) brain injury resulting in incurable
imbecility or insanity; and
(5) such other cases as may be
determined by the GSIS.
Section 17. Permanent Partial Disability
Benefits.
(a) If the disability is partial, he shall receive
a cash payment in accordance with a
schedule of disabilities to be prescribed
by the GSIS: Provided, That he satisfies
either conditions (1) or (2) of Section
16(a);
(b) The following disabilities shall be
deemed permanent and partial:
(1) complete and permanent loss of
the use of:
(i) any finger
(ii) any toe
(iii) one arm
(iv) one hand
(v) one foot
(vi) one leg
(vii) one or both ears
(viii) hearing of one or both ears
(ix) sight of one eye
(2) such other cases as may be
determined by the GSIS.
TEMPORARY DISABILITY BENEFITS
Section 18. Temporary Total Disability

Benefit.
(a) A member who suffers temporary
total disability for reasons not due
to any of the conditions enumerated
in Section 15 hereof shall be entitled
to seventy-five percent (75%) of his
current daily compensation for each
day or fraction thereof of temporary
disability benefit not exceeding one
hundred twenty (120) days in one
calendar year after exhausting all
his sick leave credits and collective
bargaining agreement sick leave
benefits, if any, but not earlier than
the fourth day of his temporary total
disability: Provided, That:
(1) he is in the service at the time of
his disability; or
(2) if separated, he has rendered at
least three (3) years of service and
has paid at least six (6) monthly
contributions in the twelve-month
period immediately preceding his
disability.
Provided, however, That a member
cannot enjoy the temporary total
disability benefit and sick leave pay
simultaneously: Provided, further, That
if the disability requires more extensive

treatment that lasts beyond one hundred
twenty (120) days, the payment of the
temporary total disability benefit may
be extended by the GSIS but not to
exceed a total of two hundred forty
(240) days.
(b) The temporary total disability benefit
shall in no case be less than Seventy
pesos (P70.00) a day.
(c) The notices required of the member and
the employer, the mode of payment, and
the other requirements for entitlement
to temporary total disability benefits
shall be provided in the rules and
regulations to be prescribed by the
GSIS.
Section 19. Non-scheduled Disability.
For injuries or illnesses resulting in
a disability not listed in the schedule of
partial/total disability, as provided herein,
the GSIS shall determine the nature of the
disability and the corresponding benefits
therefor.
SURVIVORSHIP BENEFITS
Section 20. Survivorship Benefits.

When a member or pensioner dies,
the beneficiaries shall be entitled to
survivorship benefits provided in Sections
21 and 22 hereunder subject to the

conditions therein provided for. The
survivorship pension shall consist of:
(1) the basic survivorship pension which is
fifty percent (50%) of the basic monthly
pension; and
(2) the dependent childrens pension not
exceeding fifty percent (50%) of the basic
monthly pension.
Section 21. Death of a Member.
(a) Upon the death of a member, the primary
beneficiaries shall be entitled to:
(1) survivorship pension: Provided,
That the deceased:
(i) was in the service at the time of his
death; or
(ii) if separated from the service,
has at least three (3) years of
service at the time of his death and
has paid thirty-six (36) monthly
contributions within the five-year
period immediately preceding
his death; or has paid a total of
at least one hundred eighty (180)
monthly contributions prior to
his death; or
(2) the survivorship pension plus a cash
payment equivalent to one hundred
percent (100%) of his average
monthly compensation for every
year of service: Provided, That the
deceased was in the service at the

time of his death with at least three
(3) years of service; or
(3) a cash payment equivalent to one
of service he paid contributions, but
not less than Twelve thousand pesos
(P12,000.00): Provided, That the
deceased has rendered at least three
(3) years of service prior to his death
but does not qualify for the benefits
under the item (1) or (2) of this
paragraph.
(b) The survivorship pension shall be paid as
follows:
(1) when the dependent spouse is the
only survivor, he/she shall receive the
basic survivorship pension for life or
until he/she remarries;
(2) when only dependent children are
the survivors, they shall be entitled
to the basic survivorship pension
for as long as they are qualified,
plus the dependent childrens
pension equivalent to ten percent
(10%) of the basic monthly
pension for every dependent child
not exceeding five (5), counted
from the youngest and without
substitution;
(3) when the survivors are the dependent

spouse and the dependent children,
the dependent spouse shall receive
the basic survivorship pension for
life or until he/she remarries, and
the dependent children shall receive
the dependent childrens pension
mentioned in the immediately
preceding paragraph (2) hereof.
(c) In the absence of primary beneficiaries,
the secondary beneficiaries shall be
entitled to:
(1) the cash payment equivalent to one
of service he paid contributions,
but not less than Twelve thousand
pesos (P12,000): Provided, That the
member is in the service at the time
of his death and has at least three (3)
years of service; or
(2) in the absence of secondary beneficiaries,
the benefits under this paragraph shall
be paid to his legal heirs.
(d) For purposes of the survivorship benefits,
legitimate children shall include legally
adopted and legitimate children.
Section 22. Death of a Pensioner. Upon
the death of an old-age pensioner or a member
receiving the monthly income benefit for
permanent disability, the qualified beneficiaries
shall be entitled to the survivorship pension

defined in Section 20 of this Act, subject to the
provisions of paragraph (b) of Section 21 hereof.
When the pensioner dies within the period
covered by the lump sum, the survivorship
pension shall be paid only after the expiration
of the said period.
FUNERAL BENEFITS
Section 23. Funeral Benefit. The

amount of funeral benefit shall be
determined and specified by the GSIS
in the rules and regulations but shall
not be less than Twelve thousand pesos
(P12,000.00): Provided, That it shall be
increased to at least Eighteen thousand
pesos (P18,000.00) after five (5) years and
shall be paid upon the death of:
(a) an active member as defined under Section
2(e) of this Act; or
(b) a member who has been separated from
the service, but who may be entitled to
future benefit pursuant to Section 4 of
this Act; or
(c) a pensioner, as defined in Section 2(o) of
this Act; or
(d) a retiree who at the time of his retirement
was of pensionable age under this Act but
who opted to retire under Republic Act
No. 1616.
LIFE INSURANCE BENEFITS
Section 24. Compulsory Life Insurance.

All employees except for Members of
the Armed Forces of the Philippines (AFP)
and the Philippine National Police (PNP)
shall, under such terms and conditions as
may be promulgated by the GSIS, be
compulsorily covered with life insurance,
which shall automatically take effect as
follows:
(1) for those employed after the effectivity of
this Act, their insurance shall take effect
on the date of their employment;
(2) for those whose insurance will mature
after the effectivity of this Act, their
insurance shall be deemed renewed on
the day following the maturity or expiry
date of their insurance;
(3) for those without any life insurance
as of the effectivity of this Act, their
insurance shall take effect following
said effectivity.
Section 25. Dividends. An annual
dividend may be granted to all members of
the GSIS whose life insurance is in force
for at least one (1) year in accordance with a
dividend allocation formula to be determined
by the GSIS.
Section 26. Optional Insurance.
Subject to the rules and regulations
prescribed by the GSIS, a member

may apply for insurance and/or pre-
need coverage embracing life, health,
hospitalization, education, memorial
plans, and such other plans as may be
designed by the GSIS, for himself and/
or his dependents. Any employer may
likewise apply for group insurance
coverage for its employees. The
payment of the premiums/installments
for optional insurance and pre-need
products may be made by the insured
or his employer and/or any person
acceptable to the GSIS.
Section 27. Reinsurance. The GSIS may
reinsure any of its interests or part thereof
with any private company or reinsurer
whether domestic or foreign: Provided, That
the GSIS shall submit an annual report on
its reinsurance operations to the Insurance
Commission.
E. ADJUDICATION
OF CLAIMS AND DISPUTES
Section 28. Prescription. Claims for

benefits under this Act except for life and
retirement shall prescribe after four (4) years
from the date of contingency.
Section 29. Facility of Payment.
The GSIS shall prescribe rules and
regulations to facilitate payment of

benefit, proceeds, and claims under this
Act and any other laws administered by
the GSIS. Payments made by the GSIS
prior to its receipt of an adverse claim,
to a beneficiary or claimant subsequently
found not entitled thereto, shall not bar
the legal and eligible recipient to his
right to demand the payment of benefits,
proceeds, and claims from the GSIS, who
shall, however, have a right to institute
the appropriate action in a court of law
against the ineligible recipient.
Section 30. Settlement of Disputes.
The GSIS shall have original and exclusive
jurisdiction to settle any dispute arising under
this Act and any other laws administered by
the GSIS.
The Board may designate any member
of the Board, or official of the GSIS who
is a lawyer, to act as hearing officer to
receive evidence, make findings of fact and
submit recommendations thereon. The
hearing officer shall submit his findings
and recommendations, together with all
the documentary and testimonial evidence
to the Board within thirty (30) working
days from the time the parties have closed
their respective evidence and filed their
last pleading. The Board shall decide
the case within thirty (30) days from the
receipt of the hearing officers findings

and recommendations. The cases heard
directly by the Board shall be decided
within thirty (30) working days from the
time they are submitted by the parties for
decision.
Section 31. Appeals. Appeals from any
decision or award of the Board shall be
governed by Rules 43 and 45 of the 1997
Rules of Civil Procedure adopted by the
Supreme Court on April 8, 1997 which will
take effect on July 1, 1997: Provided, That
pending cases and those filed prior to July
1, 1997 shall be governed by the applicable
rules of procedure: Provided, further, That
the appeal shall take precedence over all
other cases except criminal cases when the
penalty of life imprisonment or death or
reclusion perpetua is imposable.
The appeal shall not stay the execution of
the order or award unless ordered by the
Board, by the 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 32. Execution of Decision.
When no appeal is perfected and there is
no order to stay by the Board, by the Court
of Appeals or by the Supreme Court, any
decision or award 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 sheriff or its
appointed sheriff such writs of execution as
may be necessary for the enforcement of such
decision or award, and any person who shall
fail or refuse to comply with such decision,
award, writ or process after being required to
do so, shall, upon application by the GSIS, be
punished for contempt.
Section 33. Oaths, Witnesses, and
Production of Records. When
authorized by the Board, an official or
employee of the GSIS shall have the power
to administer oath and affirmation, take
depositions, certify to official acts, and issue
subpoena ad testificandum and subpoena
duces tecum to compel the attendance of
witnesses and the production of books,
papers, correspondences, and other
records deemed necessary as evidence
in connection with any question arising
under this Act. Any case of contumacy
shall be dealt with in accordance with the
provisions of Section 580 of the Revised
Administrative Code.
F. FUNDS OF THE GSIS
Section 34. Funds. All contributions

payable under Section 5 of this Act
together with the earnings and accruals

thereon shall constitute the GSIS Social
Insurance Fund. The said Fund shall be
used to finance the benefits administered
by the GSIS under this Act. In addition,
the GSIS shall administer the optional
insurance fund for the insurance coverage
described in Section 26 hereof, the
employees Compensation Insurance
Fund created under P.D. 626, as amended,
the General Insurance Fund created
under Act No. 656, as amended, and such
other special funds existing or that may
be created for special groups or persons
rendering services to the government.
The GSIS shall maintain the required
reserves to guarantee the fulfillment of its
obligations under this Act.
The funds of the GSIS shall not be used for
purposes other than what are provided for
under this Act. Moreover, no portion of the
funds of the GSIS or income thereof shall
accrue to the General Fund of the national
government and its political subdivisions,
instrumentalities and other agencies
including government-owned and controlled
corporations except as may be allowed under
this Act.
Section 35. Deposits and Disbursements.
All revenues collected and all accruals
thereto shall be deposited, administered
and disbursed in accordance with the law. A

maximum expense loading of twelve percent
(12%) of the yearly revenues from all
sources may be disbursed for administrative
and operational expenses except as may be
otherwise approved by the President of the
Philippines on the basis of actuarial and
management studies.
Section 36. Investment of Funds. The
funds of the GSIS which are not needed to
meet the current obligations may be invested
under such terms and conditions and rules
and regulations as may be prescribed by the
Board: Provided, That investments shall
satisfy the requirements of liquidity, safety/
security and yield in order to ensure the
actuarial solvency of the funds of the GSIS:
Provided, further, That the GSIS shall submit
an annual report on all investments made to
both Houses of Congress of the Philippines,
to wit:
(a) in interest-bearing bonds or securities
or other evidence of indebtedness of the
Government of the Philippines;
(b)
I n interest-b earing deposit s or
securities in any domestic bank doing
business in the Philippines: Provided,
That in the case of such deposits,
these 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 has prior designation
as a depository for the purpose by
the Monetary Board of the Central
Monetary Authority;
(c) in direct housing loans to members
and group housing projects secured by
first mortgage, giving priority to the
low income groups and in short-and-
medium-term loans to members such
as salary, policy, educational, emergency,
stock purchase plan and other similar
loans: Provided, That no less than forty
percent (40%) of the investable fund of
the GSIS Social Insurance Fund shall be
invested for these purposes;
(d) in bonds, securities, promissory notes
educational or medical institutions to
finance the construction, improvement
and maintenance of schools and
hospitals;
(e) in real estate property including shares of
stocks involving real estate property and
investments secured by first mortgages on
real estate or other collaterals acceptable
to the GSIS: Provided, That such
investments shall, in the determination of
the Board, redound to the benefit of the
GSIS, its members, as well as the general
public;
(f)
In debt instruments and other
securities traded in the secondary
markets;
(g) In loans to, or in bonds, debentures,
promissory notes or other evidence of
indebtedness of any solvent corporation
created or existing under the laws of the
Philippines;
(h) In common and preferred stocks of
any solvent corporation or financial
institution created or existing under the
laws of the Philippines listed in the stock
exchange with proven track record or
and payment of dividends at least once
over the same period;
(i) In domestic mutual funds including
investments related to the operations of
mutual funds; and
(j) In foreign mutual funds and in
foreign currency deposits or foreign
currency-denominated debts, non-
speculative equities and other
financial instruments or other assets
issued in accordance with 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.
Section 37. Records and Reports.
The GSIS shall keep and cause to keep
such records as may be necessary for
the purpose of making actuarial studies,
calculations and valuations of the funds
of the GSIS including such data needed
in the computation of rates of disability,
mortality, morbidity, separation and
retirement among the members and
any other information useful for the
adjustment of the benefits of the
members. The GSIS shall maintain
appropriate books of accounts to record
its assets, liabilities, income, expenses,
receipts and disbursements of funds
and other financial transactions and
operations.
Section 38. Examination and Valuation of
the Funds. The GSIS shall make a periodic
actuarial examination and valuation of its
funds in accordance with accepted actuarial
principles.
Section 39. Exemption from Tax, Legal
Process and Lien. It is hereby declared
to be the policy of the State that the
actuarial solvency of the funds of the
GSIS shall be preserved and maintained

at all times and that contribution rates
necessary to sustain the benefits under this
Act shall be kept as low as possible in order
not to burden the members of the GSIS
and their employers. Taxes imposed on the
GSIS 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 GSIS, 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 shall
continue unless expressly and specifically
revoked and any assessment against the
GSIS 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
G. ADMINISTRATION
Section 40. Implementing Body. The

Government Service Insurance System as
created under Commonwealth Act No. 186
shall implement the provisions of this Act.
Section 41. Powers and Functions of
the GSIS. The GSIS shall exercise the
following powers and functions:
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 the 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 GSIS.
(a) to formulate, adopt, amend and/or

rescind such rules and regulations as may
be necessary to carry out the provisions
and purposes of this Act, as well as the
effective exercise of the powers and
functions, and the discharge of duties and
responsibilities of the GSIS, its officers
and employees;
(b) to adopt or approve the annual and
supplemental budget of receipts and
expenditures including salaries and
allowances of the GSIS personnel; to
authorize such capital and operating
expenditures and disbursements of the
GSIS as may be necessary and proper for
the effective management and operation
of the GSIS;
(c) to invest the funds of the GSIS, directly
or indirectly, in accordance with the
provisions of this Act;
(d) to acquire, utilize or dispose of, in
any manner recognized by law, real or
personal property in the Philippines
or elsewhere necessary to carry out the
purposes of this Act;
(e) to conduct continuing actuarial and
statistical studies and valuations to
determine the financial condition of the
GSIS and taking into consideration such
studies and valuations and the limitations
herein provided, re-adjust the benefits,
contributions, premium rates, interest

rates or the allocation or re-allocation of
the funds to the contingencies covered;
(f) to have the power of succession;
(g) to sue and be sued;
(h) to enter into, make, perform and carry out
contracts of every kind and description
with any person, firm or association or
corporation, domestic or foreign;
(i) to carry on any other lawful business
whatsoever in pursuance of, or in
connection with the provisions of this Act;
(j) to have one or more offices in and
outside of the Philippines, and to
conduct its business and exercise its
powers throughout and in any part of
the Republic of the Philippines and/or
in any or all foreign countries, states and
territories: Provided, That the GSIS shall
maintain a branch office in every province
where there exists a minimum of fifteen
thousand (15,000) membership;
(k) to borrow funds from any source, private
or government, foreign or domestic,
only as an incident in the securitization
of housing mortgages of the GSIS and
on account of its receivables from any
government or private entity;
(l) to invest, own or otherwise participate
in equity in any establishment, firm or
entity;
(m) to approve appointments in the GSIS

except appointments to positions which
are policy determining, primarily
confidential or highly technical in
nature according to the Civil Service
rules and regulations: Provided, That all
positions in the GSIS shall be governed
by a compensation and position
classification system and qualifications
standards approved by the GSIS Board
of Trustees based on a comprehensive
job analysis and audit of actual duties
and responsibilities: Provided, further,
That the compensation plan shall
be comparable with the prevailing
compensation plans in the private
sector and shall be subject to the
periodic review by the Board no more
than once every four (4) years without
prejudice to yearly merit reviews or
increases based on productivity and
profitability;
(n) to design and adopt an Early Retirement
Incentive Plan (ERIP) and/or financial
assistance for the purpose of retirement
for its own personnel;
(o) to fix and periodically review and adjust
the rates of interest and other terms and
conditions for loans and credits extended
to members or other persons, whether
natural or juridical;
(p) to enter into agreement with the Social

Security System or any other entity,
enterprise, corporation or partnership
for the benefit of members transferring
from one system to another subject to
the provision of Republic Act No. 7699,
otherwise known as the Portability Law;
(q) to be able to float proper instrument to
liquefy long-term maturity by pooling
funds for short-term secondary market;
(r) to submit annually, not later than June
30, a public report to the President of
the Philippines and the Congress of the
Philippines regarding its activities in the
administration and enforcement of this
Act during the preceding year including
information and recommendations on
broad policies for the development and
perfection of the programs of the GSIS;
(s) to maintain a provident fund, which
consists of contributions made by both
the GSIS and its officials and employees
and their earnings, for the payment of
benefits to such officials and employees
or their heirs under such terms and
conditions as it may prescribe;
(t) to approve and adopt guidelines affecting
investments, insurance coverage of
government properties, settlement of
claims, disposition of acquired assets,
privatization or expansion of subsidiaries,
development of housing projects,

increased benefit and loan packages to
members, and the enforcement of the
(u) any provision of law to the contrary
notwithstanding, to authorize the
payment of extra remuneration to the
officials and employees directly involved
in the collection and/or remittance of
contributions, loan repayments, and
other monies due to the GSIS at such
rates and under such conditions as it may
adopt. Provided, That the best interest of
the GSIS shall be observed thereby;
(v) to determine, fix and impose interest upon
unpaid premiums due from employers
and employees;
(w) to ensure the collection or recovery
of all indebtedness, liabilities and/
or accountabilities, including unpaid
premiums or contributions in favor
of the GSIS arising from any cause or
source whatsoever, due from all obligors,
whether public or private. The Board
shall demand payment or settlement
of the obligations referred to herein
within thirty (30) days from the date
the obligation becomes due, and in the
event of failure or refusal of the obligor
or debtor to comply with the demand,
to initiate or institute the necessary or
proper actions or suits, criminal, civil or

administrative or otherwise, before the
courts, tribunals, commissions, boards,
or bodies of proper jurisdiction within
thirty (30) days reckoned from the expiry
date of the period fixed in the demand
within which to pay or settle the account;
(x) to design and implement programs that
will promote and mobilize savings and
provide additional resources for social
security expansion and at the same time
afford individual members appropriate
returns on their savings/investments.
The programs shall be so designed as
to spur socio-economic take-off and
maintain continued growth; and
(y) to exercise such powers and perform such
other acts as may be necessary, useful,
incidental or auxiliary to carry out the
provisions of this Act, or to attain the
purposes and objectives of this Act.
Section 42. The Board of Trustees; Its
Composition; Tenure and Compensation.
The corporate powers and functions of
the GSIS shall be vested in and exercised
by the Board of Trustees composed of the
President and General Manager of the GSIS
and eight (8) other members to be appointed
by the President of the Philippines, one
(1) of whom shall be either the President
of the Philippine Public School Teachers
Association (PPSTA) or the President

of the Philippine Association of School
Superintendents (PASS), another two (2)
shall represent the leading organizations
or associations of government employees/
retirees, another four (4) from the banking,
finance, investment, and insurance sectors,
and one (1) recognized member of the legal
profession who at the time of appointment
is also a member of the GSIS. The Trustees
shall elect from among themselves a
Chairman while the President and General
Manager of the GSIS shall automatically be
the vice-chairman.
The Trustees, except the President and
General Manager who shall cease as trustee
upon his separation, shall hold office for six (6)
years without reappointment, or until their
successors are duly appointed and qualified.
Vacancy, other than through the expiration
of the term, shall be filled for the unexpired
term only. The members of the Board shall
be entitled to a per diem of Two thousand
five hundred pesos (P2,500) for each board
meeting actually attended by them, but not
to exceed Ten thousand pesos (P10,000) a
month and reasonable transportation and
representation allowances as may be fixed by
the Board.
Section 43. Powers and Functions of
the Board of Trustees. The Board of
Trustees shall have the following powers and

functions:
(a) to formulate the policies, guidelines
and programs to effectively carry out
the purposes of this Act;
(b) to promulgate such rules and regulations
as may be necessary or proper for the
effective exercise of the powers and
functions as well as the discharge of the
duties and responsibilities of the GSIS,
its officers and employees;
(c) upon the recommendation of the
President and General Manager, to
approve the annual and supplemental
budget of receipts and expenditures
of the GSIS, and to authorize such
operating and capital expenditures
and disbursements of the GSIS as
may be necessary or proper for the
effective management, operation
and administration of the GSIS;
(d) upon the recommendation of the
President and General Manager, to
approve the GSIS organizational and
administrative structures and staffing
pattern, and to establish, fix, review, revise
and adjust the appropriate compensation
package for the officers and employees
of the GSIS with reasonable allowances,
incentives, bonuses, privileges and other
benefits as may be necessary or proper
for the effective management, operation

and administration of the GSIS, which
shall be exempt from Republic Act No.
6758, otherwise known as the Salary
Standardization Law and Republic
Act No. 7430, otherwise known as the
Attrition Law;
(e) to fix and periodically review and
adjust the rates of interest and other
terms and conditions for loans and
credits extended to its members or
other persons, whether natural or
juridical;
(f) the provision of any law to the contrary
notwithstanding, to compromise or
release, in whole or in part, any claim or
settle liability to the GSIS, regardless of
the amount involved, under such terms
and conditions as it may impose for the
best interest of the GSIS;
(g) to approve and adopt guidelines affecting
investments, insurance coverage of
government properties, settlement of
claims, disposition of acquired assets,
development of housing projects,
increased benefit and loan packages to
members, and the enforcement of the
(h) to determine, fix and impose interest
upon unpaid or unremitted premiums
and/or contributions; and
(i) to do and perform any and all acts

necessary, proper or incidental to
the attainment of the purposes and
objectives of this Act.
Section 44. Appointment, Qualifications,
and Compensation of the President and
General Manager and of Other Personnel.
The President and General Manager of
the GSIS shall be its Chief Executive Officer
and shall be appointed by the President of
the Philippines. He shall be a person with
management and investments expertise
necessary for the effective performance of
his duties and functions under this Act.
The GSIS President and General
Manager shall be assisted by one or more
executive vice-presidents, senior vice-
presidents, vice-presidents and managers
in addition to the usual supervisory
and rank and file positions who shall be
appointed and removed by the President
and General Manager with the approval of
the Board, in accordance with the existing
Civil Service rules and regulations.
Section 45. Powers and Duties of the
President and General Manager. The
President and General Manager of the GSIS
shall among others, execute and administer
the policies and resolutions approved by
the board and direct and supervise the
administration and operations of the GSIS.
The President and General Manager, subject

to the approval of the Board, shall appoint
the personnel of the GSIS, remove, suspend
or otherwise discipline them for cause, in
accordance with existing Civil Service rules
and regulations, and prescribe their duties
and qualifications to the end that only
competent persons may be employed.
Section 46. Auditor.
(a) The Chairman of the Commission on
Audit shall be the ex officio auditor of
the GSIS. For this purpose, he may
appoint a representative who shall be the
Auditor of the GSIS, and the necessary
personnel to assist said representative in
the performance of his duties.
(b) The Chairman of the Commission on
Audit or his authorized representative,
shall submit to the Board soon after the
close of each calendar year, an audited
statement showing the financial condition
and progress of the GSIS for the calendar
year just ended.
Section 47. Legal Counsel. The
Government Corporate Counsel shall be
the legal adviser and consultant of the GSIS,
but the GSIS may assign to the Office of the
Government Corporate Counsel (OGCC)
cases for legal action or trial, issues for
legal opinions, preparation and review of
contracts/agreements and others, as the
GSIS may decide or determine from time to

time: Provided, however, That the present
legal services group in the GSIS shall serve
as its in-house legal counsel.
The GSIS may, subject to approval by the
proper court, deputize any personnel of the
legal service group to act as special sheriff in the
enforcement of writs and processes issued by the
court, quasi-judicial agencies or administrative
bodies in cases involving the GSIS.
Section 48. Powers of the Insurance
Commission. The Insurance
Commissioner or his authorized
representatives shall make an examination
of the financial condition and methods of
transacting business of the GSIS at least
once every three (3) years and the report
of said examination shall be submitted to
the Board of Trustees and copies thereof
be furnished the Office of the President of
the Philippines and the two Houses of the
Congress of the Philippines within five (5)
days after the close of examination: Provided,
however, That for each examination the
GSIS shall pay the office of the Insurance
Commissioner an amount equal to the
actual expenses incurred by the said office
in the conduct of the examination, including
the salaries of the examiners and of the
actuary of such examination for the actual
time spent.
H. GENERAL PROVISIONS
Section 49. Dispensation of Social Insurance

Benefits.
(a) The GSIS shall pay the retirement
benefits to the employee on his last day of
service in the government: Provided, That
all requirements are submitted to the GSIS
within a reasonable period prior to the effective
date of the retirement;
(b) The GSIS shall discontinue the processing
and adjudication of retirement claims under
R.A. No. 1616 except refund of retirement
premium and R.A. No. 910. Instead, all
agencies concerned shall process and pay
the gratuities of their employees. The
Board shall adopt the proper rules and
procedures for the implementation of this
provision.
Section 50. Development and
disposition of Acquired Assets. The
GSIS shall have the right to develop and
dispose of its acquired assets obtained in
the ordinary course of its business. To
add value to, improve profitability on,
and/or enhance the marketability of an
acquired asset, the GSIS may further
develop/renovate the same either with
its own capital or through a joint venture
arrangement with private companies or
individuals.
The GSIS may sell its acquired assets in

accordance with existing Commission on Audit
(COA) rules and regulations for an amount
not lower than the current market value of
the property. For this purpose, the GSIS shall
conduct an annual appraisal of its property or
acquired assets to determine its current market
value. All notices of sale shall be published in
newspapers of general circulation.
No injunction or restraining order issued
by any court, commission, tribunal or
office shall bar, impede or delay the sale
and disposition by the GSIS of its acquired
assets except on questions of ownership and
national or public interest.
Section 51. Government Assistance to the
GSIS. The GSIS may call upon any employer
for such assistance as may be necessary in the
discharge of its duties and functions.
L. PENAL PROVISIONS
Section 52. Penalty.

(a) Any person found to have participated
directly or indirectly in the commission
of fraud, collusion, falsification, or
misrepresentation in any transaction
with the GSIS whether for him or for
some other persons, shall suffer the
penalties provided for in Article 172 of
the Revised Penal Code.
(b) Whoever shall obtain or receive any

money or check invoking any provision
of this Act or any agreement thereunder,
without being entitled thereto with
the intent to defraud any member, any
employer, the GSIS, or any third party,
shall be punished by a fine of not less
than Five thousand pesos (P5,000.00)
(P20,000.00) or by imprisonment of
not less than six (6) years and one (1)
day to twelve (12) years, or both, at the
discretion of the court.
(c) Whoever fails or refuses to comply with
the provisions of this Act or with the rules
and regulations adopted by the GSIS shall
be punished by a fine of not less than Five
thousand pesos (P5,000.00) nor more than
Twenty thousand pesos (P20,000.00), or
by imprisonment of not less than six (6)
years and one (1) day to twelve (12) years,
or both, at the discretion of the court.
(d) The treasurer, finance officer, cashier,
disbursing officer, budget officer or
other official or employee who fails to
include in the annual budget the amount
corresponding to the employer and
employee contributions, or who fails or
refuses or delays by more than thirty (30)
days from the time such amount becomes
due and demandable, or to deduct the
monthly contributions of the employee

shall, upon conviction by final judgment,
suffer the penalties of imprisonment from
six (6) months and one (1) day to six (6)
years, and a fine of not less than Three
thousand pesos (P3,000.00) but not more
than Six thousand pesos (P6,000.00), and
in addition shall suffer absolute perpetual
disqualification from holding public
office and from practicing any profession
or calling licensed by the government.
(e) Any employee or member who receives
or keeps fund or property belonging,
payable or deliverable to the GSIS
and appropriates the same, or takes or
misappropriates or uses the same to any
purpose other than that authorized by
this Act, or permits another person to
take, misappropriate or use said fund
or property by expressly consenting
thereto, or through abandonment
or negligence, or is otherwise guilty
of the misappropriation of said fund
or property, in whole or in part, shall
suffer the penalties provided in Article
217 of the Revised Penal Code,
and in addition shall suffer absolute
perpetual disqualification from holding
public office and from practicing any
profession or calling licensed by the
government.
(f) Any employee, who after deducting the

monthly contribution or loan amortization
from a members compensation, fails to
remit the same to the GSIS within thirty
(30) days from the date they should have
been remitted under Section 6(a) shall
be presumed to have misappropriated
such contribution or loan amortization
and shall suffer the penalties provided in
Article 315 of the Revised Penal Code, and
in addition shall suffer absolute perpetual
disqualification from holding public
office and from practicing any profession
or calling licensed by the government.
(g) 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 of premium contributions, loan
amortization and other accounts due the
GSIS who shall fail, refuse or delay the
payment, turnover, remittance or delivery
of such accounts to the GSIS within thirty
(30) days from the time that the same
shall have been due and demandable
shall, upon conviction by final judgment,
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 Ten thousand pesos (P10,000.00)
(P20,000.00), and in addition shall suffer
absolute perpetual disqualification from
holding public office and from practicing
any profession or calling licensed by the
government.
(h) The officers and/or personnel referred
to in paragraph (g) of this section shall be
liable not only criminally but also civilly to
the GSIS or to the employee or member
concerned in the form of damages,
including surcharges and interests.
(i) For the charges or complaints referred
to in paragraph (g) of this Section, the
liabilities therein set forth shall be
construed as waiver of the State of its
immunity from suit, hence, the above-
mentioned officials and/or personnel
may not invoke the defense of non-
suability of the State.
(j) Failure of the Members of the GSIS
Board, including the chairman and
the vice-chairman, to comply with
the provisions of paragraph (w) of
Section 41 hereof, shall subject them
to imprisonment of not less than six (6)
months nor more than one (1) year or
a fine of not less than Five thousand
pesos (P5,000.00) nor more than Ten
thousand pesos (P10,000.00) without

prejudice to any civil or administrative
liability which may also arise therefrom.
Criminal actions arising from violations of
the provisions of this Act may be commenced
by the GSIS or by the aggrieved member,
either under this Act or, in appropriate cases,
under the Revised Penal Code.
Section 53. Implementing Rules and
Regulations. The implementing rules and
regulations to carry out the provisions of this
Act shall be adopted and promulgated by the
GSIS not later than ninety (90) days after the
approval of this Act.
Section 54. Non-impairment of Benefits,
Powers, Jurisdiction, Rights, Privileges,
Functions and Activities. Nothing
in this Act shall be construed to repeal,
amend or limit any provision of existing
laws. Presidential Decrees and Letters of
Instructions, not otherwise specifically
inconsistent with the provisions of this Act.
Section 55. Exclusiveness of Benefits.
Whenever other laws provide similar
benefits for the same contingencies covered
by this Act, the member who qualifies to
the benefits shall have the option to choose
which benefits will be paid to him. However,
if the benefits provided by the law chosen
are less than the benefits provided under this
Act, the GSIS shall pay only the difference.
Section 56. Appropriations. The

amount necessary to carry out the
provisions of this Act shall be included in
the respective budgets of the agencies in the
national government obligation program
of the year following its enactment into
law and thereafter.
Section 2. Separability Clause. Should any provision
of this Act or any part thereof be declared
invalid, the other provisions, so far as they
are separable from the invalid ones, shall
remain in force and effect.
Section 3. Repealing Clause. All laws and any other
law or parts of law specifically inconsistent
herewith are hereby repealed or modified
accordingly: Provided, That the rights under
existing laws, rules and regulations vested
upon or acquired by an employee who is
already in the service as of the effectivity
of this Act shall remain in force and effect:
Provided, further, That subsequent to the
effectivity of this Act, a new employee or
an employee who has previously retired or
separated and is reemployed in the service
shall be covered by the provisions of this Act.
Section 4. Effectivity. This Act shall take effect fifteen
(15) days after its publication in the Official
Gazette or in at least two (2) newspapers of
general circulation.
Approved: May 30, 1997


AN ACT PROHIBITING THE EMPLOYMENT
OF CHILDREN BELOW 15 YEARS OF AGE
IN PUBLIC AND PRIVATE UNDERTAKINGS,
AMENDING FOR THIS PURPOSE
SECTION 12, ARTICLE VIII OF R.A. 7610
Section 1. Section 12, Article VIII of R.A. No. 7610

otherwise known as the Special Protection of
Children Against Child Abuse, Exploitation
and Discrimination Act is hereby amended
to read as follows:
Section 12. Employment of Children. -
Children below fifteen (15) years of age shall
not be employed except:
1) When a child works directly under
the sole responsibility of his parents
or legal guardian and where only
members of the employers family are
employed: Provided, however, That his
employment neither endangers his life,
safety, health and morals, nor impairs his
normal development; Provided, further,
That the parent or legal guardian shall
provide the said minor child with the
prescribed primary and/or secondary
education; or
2) Where a childs employment or
participation in public entertainment
or information through cinema,
theater, radio or television is essential:

Provided, The employment contract is
concluded by the childs parents or legal
guardian, with the express agreement
of the child concerned, if possible,
and the approval of the Department of
Labor and Employment: and Provided,
That the following requirements in
all instances are strictly complied
with:cd
(a) The employer shall ensure the
protection, health, safety, morals
and normal development of the
child;
(b)The employer shall institute measures
to prevent the childs exploitation or
discrimination taking into account
the system and level of remuneration,
and the duration and arrangement of
working time; and
(c) The employer shall formulate and
implement, subject to the approval and
supervision of competent authorities,
a continuing program for training and
skills acquisition of the requirements.
In the above exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging such child,
a work permit from the Department of
Labor and Employment which shall ensure
observance of the child.cd i
The Department of Labor and Employment

shall promulgate rules and regulations
necessary for the effective implementation
of this Section.
Section 2. All laws, decrees, executive orders, rules
and regulations or parts thereof contrary
to, or inconsistent with this Act are hereby
modified or repealed accordingly.
Section 3. This Act shall take effect fifteen (15)
days after its complete publication in
the Official Gazette or in at least two (2)
national newspapers or general circulation
whichever comes earlier.
Approved: November 9, 1993
DEPARTMENT ORDER NO. 18

Rules and Regulations
Implementing Republic Act No. 7658
By virtue of the provisions of Section 2 of Republic Act No.

7658, An Act Prohibiting the Employment of Children Below
Fifteen (15) Years of Age in Public and Private Undertakings,
amending Section 12, Article VIII of Republic Act No.
7610, the following Rules and Regulations governing the
employment of children are hereby issued:
Section 1. General Prohibition. - Except as otherwise

provided in this Rules, children below 15
years of age shall not be employed, permitted
or suffered to work, in any public or private
establishments in the Philippines.
Section 2. Definition of terms.
a. Employer - any parent, legal guardian
or producer acting as employer who hires
or engages the services of any child below
15 years of age.
b. Legal Guardian - any person duly appointed
by a court of competent authority to exercise
care and custody of or parental authority over
the person of such child/employee.
c. Producer - any individual or group of
individuals engaged in the production
of movies, films, motion pictures, shows
or advertisements, whether on cinema,
theater, radio or television, wherein the
services of such child/employee are hired.
d. Members of the family - those persons

having family relations referred to under
Article 150 of the Family Code of the
Philippines.It shall include the employer
parents or legal guardians husband or
wife, parents, children, other ascendants
or descendants, brothers and sisters
whether of full or half blood.
e. Department - the Department of Labor
and Employment.
Section 3. Exceptions and conditions. - The following shall
be the only exceptions to the prohibition on the
employment of children below 15 years of age and
the conditions for availment of said exceptions:
a. When the child works directly under the
sole responsibility of his/her parents or legal
guardian who employs members of his/her
family only, under the following conditions:
1. the employment does not endanger the
childs life, safety, health and morals;
2. the employment does not impair the
childs normal development.
3. the employer parent or legal
guardian provides the child with the
primary and/or secondary education
prescribed by the Department of
Education, Culture and Sports.
b. Where the childs employment or
participation in public entertainment or
information through cinema, theater, radio
or television is essential, provided that:
1. the employment does not involve

advertisements or commercials
promoting alcoholic beverages,
intoxicating drinks, tobacco and its
by-products or exhibiting violence;
2. there is a written contract approved
by the Department of Labor and
Employment; and
3. the condition prescribed in Section a
above are met.
Section 4. Pre-employment requirements. - Before an
employer engages a child for employment
under the exceptions enumerated above, he/
she met first secure a work permit from the
Regional Office of the Department having
jurisdiction over the workplace.
The Regional Office shall require the employer
to submit the following documents in support
of the application for a work permit:
a. two (2) pictures of the child, one full body
and the other showing the childs face,
both of which must be recently taken and
recognizable;
b. the childs Birth Certificate or in its absence,
his/her Baptismal Certificate and a joint
affidavit of his/her two nearest kin showing
the year he/she was born and a duly
authenticated proof of legal guardianship
where the employer is a legal guardian;
c. a certificate of enrollment issued by the school
where he/she is currently or last enrolled or a
statement from the parent or legal guardian

that the child is attending school;
d. a written undertaking that:
1. measures shall be instituted by
the employer to prevent the childs
exploitation and discrimination such
as payment of minimum age, hours of
work and other terms and conditions
required by law; and
2. the employer shall ensure the
protection, health, safety, morals and
normal development of the child;
e. a medical certificate showing that the
child is fit for employment;
f. a certification of a continuing program for
training and skills acquisition approved and
supervised by any competent authority, nearest
the place of work, which may be recognized
vocational or training school, the regional
or local office of the Department of Social
Welfare and Development and the National
Manpower and Youth Council; and
g. a written contract of employment concluded
by the childs parents or legal guardian with
the employer in cases of employment or
participation in public entertainment or
information through cinema, theater, radio or
television.Said contract shall bear the express
agreement of the child concerned, if possible,
and shall state the nature or full description of
the job and the justification is essential.
Section 5. Hours of Work. - Subject to consultations with

the sectors concerned, the Department shall
by appropriate regulations, issue standards
governing the hours of work and time of day
that children may be allowed to work.
Section 6. Effect on other issuances. - The provisions of
existing rules and administrative issuances not
otherwise repealed, modified or inconsistent
with this Order shall continue to have full
force and effect.
Section 7. Penalties. - Any person who shall violate
any provision of Article 12 of RA 7658,
shall suffer the penalty of a fine of not
less than One Thousand Pesos (P1,000)
but not more than Ten Thousand Pesos
(P10,000) or imprisonment of not less than
three (3) months but not more than three
(3) years, or both at the discretion of the
court: Provided, that in case of repeated
violations of the provisions of this Article,
the offenders license to operate shall be
revoked.
Section 8. Effectivity. - This Rules and Regulations shall
take effect fifteen (15) days after its publications
in a newspaper of general circulation.
Signed this 12th day of May, 1994 in the City of Manila,

Philippines.
(SGD.) MA. NIEVES R. CONFESOR

Secretary

Migrant Workers and Overseas Filipinos Act of 1995
An act to institute the policies of overseas employment

and establish a higher standard of protection and
promotion of the welfare of migrant workers, their
families and overseas Filipinos in distress, and for
other purposes.
of the Philippines in Congress assembled:
Section 1. Short Title. - This act shall be known and

cited as the Migrant Workers and Overseas
Filipinos Act of 1995.
Section 2. Declaration of Policies --
(a) In the pursuit of an independent foreign
policy and while considering national
sovereignty, territorial integrity,
national interest and the right to self-
determination paramount in its relations
with other states, the State shall, at all
times, uphold the dignity of its citizens
whether in country or overseas, in
general, and Filipino migrant workers, in
particular.
(b) The State shall afford full protection
to labor, local and overseas, organized
and unorganized, and promote
full employment and equality of
employment opportunities for all.
Towards this end, the State shall
provide adequate and timely social,

economic and legal services to Filipino
migrant workers.
(c) While recognizing the significant
contribution of Filipino migrant workers
to the national economy through their
foreign exchange remittances, the State
does not promote overseas employment
as a means to sustain economic growth
and achieve national development. The
existence of the overseas employment
program rests solely on the assurance
that the dignity and fundamental
human rights and freedoms of the
Filipino citizens shall not, at any time,
be compromised or violated. The State,
therefore, shall continuously create local
employment opportunities and promote
the equitable distribution of wealth and
the benefits of development.
(d) The State affirms the fundamental equality
before the law of women and men and
the significant role of women in nation-
building. Recognizing the contribution
of overseas migrant women workers and
their particular vulnerabilities, the State
shall apply gender sensitive criteria in the
formulation and implementation of policies
and programs affecting migrant workers
and the composition of bodies tasked for
the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial

bodies and adequate legal assistance
shall not be denied to any persons by
reason of poverty. In this regard, it is
imperative that an effective mechanism
be instituted to ensure that the rights and
interest of distressed overseas Filipinos,
in general, and Filipino migrant
workers, in particular, documented or
undocumented, are adequately protected
and safeguarded.
(f) The right of Filipino migrant workers
and all overseas Filipinos to participate
in the democratic decision-making
processes of the State and to be
represented in institutions relevant to
overseas employment is recognized and
guaranteed.
(g) The State recognizes that the ultimate
protection to all migrant workers is the
possession of skills. Pursuant to this and
as soon as practicable, the government
shall deploy and/or allow the deployment
only to skilled Filipino workers.
(h) Non-governmental organizations, duly
recognized as legitimate, are partners of
the State in the protection of Filipino
migrant workers and in the promotion
of their welfare, the State shall cooperate
with them in a spirit of trust and mutual
respect.
(i) Government fees and other administrative

costs of recruitment, introduction,
placement and assistance to migrant
workers shall be rendered free without
prejudice to the provision of Section 36
hereof.
Nonetheless, the deployment of Filipino
overseas workers, whether land-based or
sea-based by local service contractors and
manning agencies employing them shall be
encouraged. Appropriate incentives may be
extended to them.
Section 3. Definitions. - For purposes of this Act:
(a) Migrant worker refers to a person who
is to be engaged, is engaged or has been
engaged in a renumerated activity in
a state of which he or she is not a legal
resident to be used interchangeably with
overseas Filipino worker.
(b) Gender-sensitivity shall mean
cognizance of the inequalities and
inequities prevalent in society
between women and men and a
commitment to address issues with
concern for the respective interests
of the sexes.
(c) Overseas Filipinos refers to dependents
of migrant workers and other Filipino
nationals abroad who are in distress
as mentioned in Sections 24 and 26
of this Act.
I. DEPLOYMENT
Section 4. Deployment of Migrant Workers - The

State shall deploy overseas Filipino
workers only in countries where the
rights of Filipino migrant workers are
protected. The government recognizes
any of the following as guarantee on
the part of the receiving country for the
protection and the rights of overseas
Filipino workers:
(a) It has existing labor and social laws
protecting the rights of migrant
workers;
(b) It is a sign ato ry t o m ult ila t e ra l
conventions, declaration or resolutions
relating to the protection of migrant
workers;
(c) It has concluded a bilateral agreement
or arrangement with the government
protecting the rights of overseas Filipino
workers; and
(d) It is taking positive, concrete measures to
protect the rights of migrant workers.
Section 5. Termination of Ban on Deployment -
Notwithstanding the provisions of
Section 4 hereof, the government, in
pursuit of the national interest or when
public welfare so requires, may, at any
time, terminate or impose a ban on the
deployment of migrant workers.
II. ILLEGAL RECRUITMENT
Section 6. Definitions. - For purposes of this Act, illegal

recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing,
hiring, procuring workers and includes
referring, contact services, promising or
advertising for employment abroad, whether
for profit or not, when undertaken by a
non-license or non-holder of authority
contemplated under Article 13(f) of
Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the
Philippines. Provided, that such non-license
or non-holder, who, in any manner, offers or
promises for a fee employment abroad to two
or more persons shall be deemed so engaged.
It shall likewise include the following acts,
whether committed by any persons, whether
a non-licensee, non-holder, licensee or holder
of authority.
(a) To charge or accept directly or indirectly
any amount greater than the specified
in the schedule of allowable fees
prescribed by the Secretary of Labor and
Employment, or to make a worker pay
any amount greater than that actually
received by him as a loan or advance;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,

information or document or commit any
act of misrepresentation for the purpose
of securing a license or authority under
the Labor Code;
(d) To induce or attempt to induce a worker
already employed to quit his employment
in order to offer him another unless the
transfer is designed to liberate a worker
from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence
any persons or entity not to employ
any worker who has not applied for
employment through his agency;
(f) To engage in the recruitment of placement
of workers in jobs harmful to public
health or morality or to dignity of the
Republic of the Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor and
Employment or by his duly authorized
representative;
(h) To fail to submit reports on the
status of employment, placement
vacancies, remittances of foreign
exchange earnings, separations from
jobs, departures and such other
matters or information as may be
required by the Secretary of Labor
and Employment;
(i) To substitute or alter to the prejudice of the

worker, employment contracts approved
and verified by the Department of Labor
and Employment from the time of actual
signing thereof by the parties up to and
including the period of the expiration
of the same without the approval of the
Department of Labor and Employment;
(j) For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation engaged in travel agency or
to be engaged directly on indirectly in
the management of a travel agency;
(k) To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under the Labor Code
and its implementing rules and regulations;
(l) Failure to a ctually deploy without valid
reasons as determined by the Department
of Labor and Employment; and
(m) Failure to reimburse expenses incurred
by the workers in connection with
his documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the workers fault. Illegal
recruitment when committed by a syndicate
or in large scale shall be considered as
offense involving economic sabotage.
Illegal recruitment is deemed committed by

a syndicate carried out by a group of three (3)
or more persons conspiring or confederating
with one another. It is deemed committed in
large scale if committed against three (3) or
more persons individually or as a group.
The persons criminally liable for the above
offenses are the principals, accomplices and
accessories. In case of juridical persons, the
officers having control, management or
direction of their business shall be liable.
Section 7. Penalties -
(a) Any person found guilty of illegal
recruitment shall suffer the penalty of
imprisonment of not less than six (6) years
and one (1) day but not more than twelve
(12) years and a fine not less than two
hundred thousand pesos (P200,000.00)
nor more than five hundred thousand
pesos (P500,000.00).
(b) The penalty of life imprisonment and a
fine of not less than five hundred thousand
pesos (P500,000.00) nor more than one
million pesos (P1,000,000.00) shall be
imposed if illegal recruitment constitutes
economic sabotage as defined herein.
Provided, however, that the maximum
penalty shall be imposed if the person
illegally recruited is less than eighteen (18)
years of age or committed by a non-licensee
or non-holder of authority.
Section 8. Prohibition on Officials and Employees - Ot shall

be unlawful for any official or employee of
the Department of Labor and Employment,
the Philippine Overseas Employment
Administration, or the Overseas Workers
Welfare Administration, or the Department
of Foreign Affairs, or other government
agencies involved in the implementation of
this Act, or their relatives within the fourth
civil degree of consanguinity or affinity, to
engage, directly or indirectly, in the business
of recruiting migrant workers as defined in
this Act. The penalties shall be imposed upon
them.
Section 9. Venue - A criminal action arising from illegal
recruitment as defined herein shall be filed with
the Regional Trial Court of the province or city
where the offense was committed or where the
offended party actually resides at the same time
of the commission of the offense: Provided,
That the court where the criminal action is first
filed shall acquire jurisdiction to the exclusion
of other courts. Provided, however, That the
aforestated provisions shall also apply to those
criminal actions that have already been filed in
court at the time of the effectivity of this Act.
Section 10. Money Claims - Notwithstanding any
provision of law to the contrary, the Labor
Arbiters of the National Labor Relations
Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after filing

of the complaint, the claims arising out of an
employer-employee relationship or by virtue
of any law or contract involving Filipino
workers for overseas deployment including
claims for actual, moral, exemplary and other
forms of damages.
The liability of the principal/employer
and the recruitment/placement agency
for any and all claims under this section
shall be joint and several. This provisions
shall be incorporated in the contract
for overseas employment and shall be
a condition precedent for its approval.
The performance bond to be filed by the
recruitment/placement agency, as provided
by law, shall be answerable for all money
claims or damages that may be awarded to
the workers. If the recruitment/placement
agency is a juridical being, the corporate
officers and directors and partners as the
case may be, shall themselves be jointly
and solidarily liable with the corporation
or partnership for the aforesaid claims and
damages.
Such liabilities shall continue during the
entire period or duration of the employment
contract and shall not be affected by any
substitution, amendment or modification
made locally or in a foreign country of the
said contract.
Any compromise/amicable settlement or

voluntary agreement on money claims
inclusive of damages under this section shall
be paid within four (4) months from the
approval of the settlement by the appropriate
authority.
In case of termination of overseas
employment without just, valid or
authorized cause as defined by law or
contract, the workers shall be entitled to
the full reimbursement of his placement fee
with interest of twelve percent (12%) per
annum, plus his salaries for the unexpired
portion of his employment contract or
for three (3) months for every year of the
unexpired term, whichever is less.
Non-compliance with the mandatory
periods for resolutions of cases provided
under this section shall subject the
responsible officials to any or all of the
following penalties:
(a) The salary of any such official who fails
to render his decision or resolutions
within the prescribed period shall be,
or caused to be, withheld until the said
official complies therewith;
(b) Suspension for not more than ninety (90)
days; or
(c) Dismissal from the service with
disqualifications to hold any appointive
public office for five (5) years.
Provided, however, that the penalties herein

provided shall be without prejudice to any
liability which any such official may have
incurred under other existing laws or rules
and regulations as a consequence of violating
the provisions of this paragraph.
Section 11. Mandatory Periods for Resolutions of Illegal
Recruitment Cases - The preliminary
investigations of cases under this Act shall
be terminated within a period of thirty
(30) calendar days from the date of their
filing. Where the preliminary investigation
is conducted by a prosecution officer
and a prima facie case is established, the
corresponding information shall be filed in
court within twenty-four (24) hours from
the termination of the investigation. If the
preliminary investigation is conducted by a
judge and a prima facie case is found to exist,
prosecution officer within forty-eight (48)
hours from the date of receipt of the records
of the case.
Section 12. Prescriptive Periods - Illegal recruitment
cases under this Act shall prescribe in
five (5) years: Provided, however, That
illegal recruitment cases involving
economic sabotage as defined herein
shall prescribe in twenty (20) years.
Section 13. Free Legal Assistance, Preferential Entitlement
Under the Witness Protection Program - A
mechanism for free legal assistance
for victims of illegal recruitment shall

be established within the Department
of Labor and Employment including its
regional offices. Such mechanism must
include coordination and cooperation
with the Department of Justice, the
Integrated Bar of the Philippines, and
other non-governmental organizations
and volunteer groups.
The provisions of Republic Act No.
6981 to the contrary, notwithstanding,
any person who is a victim of illegal
recruitment shall be entitled to the
Witness Protection Program provided
thereunder.
III. SERVICES
Section 14. Travel Advisory/Information Dissemination.

- To give utmost priority to the
establishment of programs and services
to prevent illegal recruitment, fraud,
and exploitation or abuse of Filipino
migrant workers, all embassies and
consular offices, through the Philippine
Overseas Employment Administration
(POEA), shall issue travel advisories
or disseminate information on labor
and employment conditions, migration
realities and other facts; and adherence
of particular countries to international
standards on human and workers rights

which will adequately prepare individuals
into making informed and intelligent
decisions about overseas employment.
Such advisory or information shall be
published in a newspaper of general
circulation at least three (3) times in every
quarter.
Section 15. Repatration of Workers; Emergency
Repatration Fund. - The repatriation
of the worker and the transport of his
personal belongings shall be the primary
responsibility of the agency which
recruited or deployed the worker overseas.
All costs attendant to repatriation shall
be borne by or charged to the agency
concerned and/or its principal. Likewise,
the repatriation of remains and transport
of the personal belongings of a deceased
worker and all costs attendant thereto
shall be borne by the principal and/or
local agency. However, in cases where the
termination of employment is due solely
to the fault of the worker, the principal/
employer or agency shall not in any
manner be responsible for the repatriation
of the former and/or his belongings.
The Overseas Workers Welfare Administration
(OWWA), in coordination ith appropriate
international agencies, shall undertake
the repatriation of workers in cases
of war, epidemic, disasters or calamities,

natural or man-made, and other similar
events without prejudice to reimbursement
by the responsible principal or agency.
However, in cases where the principal or
recruitment agency cannot be identified, all
costs attendant to repatriation shall be borne
by the OWWA.
For this purposes, there is hereby created
and established an emergency repatriation
fund under the administration control
and supervision of the OWWA, initially
to consist of one hundred million pesos
(P100,000,000.00), inclusive of outstanding
balances.
Section 16. Mandatory Repatration of Underage Migrant
Workers. - Upon discovery or being informed
of the presence of migrant workers whose
actual ages fall below the minimum age
requirement for overseas deployment, the
responsible officers in the foreign service
shall without delay repatriate said workers
and advise the Department of Foreign Affairs
through the fastest means of communication
availavle of such discovery and other relevant
information.
Section 17. Establishment of Re-Placement and Monitoring
Center - A replacement and monitoring
center is hereby created in the Department
of Labor and Employment for returning
Filipino migrant workers which shall provide
a mechanism for their reintegration into

the Philippine society, serve as a promotion
house for their local employment, and
tap their skills and potentials for national
development.
The Department of Labor and
Employment, the Overseas Workers
Welfare Administration, and the Philippine
Overseas Employment Administration
shall, within ninety (90) days from the
effectivity of this Act, formulate a program
that would motivate migrant workers to
plan for productive options such as entry
into highly technical jobs or undertakings,
livelihood and entrepreneurial
development, better wage employment,
and investment of savings.
For this purpose, the Technical Education
and Skills Development Authority (TESDA),
the Technology Livelihood Resource
Center (TLRC), and other government
agencies involved in training and livelihood
development shall give priority to return
who had been employed as domestic helpers
and entertainers.
Section 18. Functions of the Re-Placement and Monitoring
Centyer - The center shall provide the
following service:
(a) Develop livelihood programs and projects
for returning Filipino migrant workers in
coordination with the private sector;
(b) Coordinate with appropriate private and

government agencies the promotion,
development, re-placement and the full
utilization of their potentials;
(c) Institute in cooperation with other
government agencies concerned, a
computer-based information system on
skilled Filipino migrant workers which
shall be accessible to all local recruitment
agencies and employers, both public and
private;
(d) Provide a periodic study and assessment
of job opportunities for returning
Filipino migrant workers.
Section 19. Establishement of a Migrant Workers and
Other Overseas Filipinos Resource Center.
- Within the premises and under the
administrative jurisdiction of the Philippine
Embassy in countries where there are large
concentrations of Filipino migrant workers,
there shall be establish a Migrant Workers
and Other Overseas Filipinos Resource
Center with the following services:
(a) Counseling and legal services;
(b) Welfare assistance including
the procurement of medical and
hospitalization services;
(c) Information, advisory and programs to
promote social integration such as post-arrival
orientation, settlement and community
networking services for social integration;
(d) Institute a scheme of registration

of undocumented workers to bring
them within the purview of this Act. For
this purpose, the Center is enjoined to
compel existing undocumented workers
to register with it within six (6) months
from the effectivity of this Act, under
pain of having his/her passport cancelled;
(e) Human resource development, such as
training and skills upgrading;
(f) Gender sensitive programs and activities to
assist particular needs of women migrant
workers;
(g) Orientation program for returning workers
and other migrants; and
(h) Monitoring of daily situations, circumstances
and activities affecting migrant workers
and other overseas Filipinos.
The establishment and operations of the
Center shall be a joint undertaking of the
various government agencies. The Center
shall be open for twenty-four (24) hours daily,
including Saturdays, Sundays and holidays, and
shall be staffed by Foreign Service personnel,
service attaches or officers who represent
other organizations from the host countries.
In countries categorized as highly problematic
by the Department of Foreign Affairs and the
Department of Labor and Employment and
where there is a concentration of Filipino
migrant workers, the government must
provide a lawyer and a social worker for the

Center. The Labor Attache shall coordinate
the operation of the Center and shall keep the
Chief of Mission informed and updated on all
matters affecting it.
The Center shall have a counterpart 24-
hour information and assistance center at
the Department of Foreign Affairs to ensure
a continuous network and coordinative
mechanism at the home office.
Section 20. Establishment of a Shared Government
Information System for Migration. - An
inter-agency committee composed of
the Department of Foreign Affairs and
its attached agency, the Commission on
Filipino Overseas, the Department of Labor
and Employment, the Philippine Overseas
Employment Administration, The Overseas
Workers Welfare Administration, The
Department of Tourism, the Department
of Justice, the Bureau of Immigration, the
National Bureau of Investigation, and the
National Statistics Office shall be established to
implement a shared government information
system for migration. The inter-agency
committee shall initially make available to itself
the information contained in existing data bases/
files. The second phase shall involve linkaging
of computer facilities in order to allow free-flow
data exchanges and sharing among concerned
agencies.
The inter-agency committee shall convene

to identify existing data bases which shall
be declassified and shared among member
agencies. These shared data bases shall
initially include, but not limited to, the
following information:
(a) Masterlists of departing/arriving Filipinos;
(b) Inventory of pending legal cases
involving Filipino migrant workers and
other Filipino nationals, including those
serving prison terms;
(c) Masterlists of departing/arriving
Filipinos;
(d) Statistical profile on Filipino migrant
workers/overseas Filipinos/Tourists;
(e) Blacklisted foreigners/undesirable aliens;
(f) Basic data on legal systems, immigration
policies, marriage laws and civil and
criminal codes in receiving countries
particularly those with the large numbers
of Filipinos;
(g) List of labor and other human rights
instruments where receiving countries
are signatories;
(h) A tracking system of past and present
gender disaggregated cases involving
male and female migrant workers; and
(i) Listing of overseas posts which may
render assistance to overseas Filipinos,
in general, and migrant workers, in
particular.
Section 21. Migrant Workers Loan Guarantee Fund. -

In order to further prevent unscrupulous
illegal recruiters from taking advantage of
workers seeking employment abroad, the
OWWA, in coordination with government
financial institutions, shall institute financing
schemes that will expand the grant of pre-
departure loan and family assistance loan.
For this purpose, a Migrant Workers
Loan Guarantee Fund is hereby created
and the revolving amount of one hundred
million pesos (P100,000,000.00) from the
OWWA is set aside as a guarantee fund in
favor of participating government financial
institutions.
Section 22. Rights and Enforcement Mechanism
Under International and Regional Human
Rights Systems. - The Department of Foreign
Affairs is mandated to undertake the necessary
initiative such as promotions, acceptance or
adherence of countries receiving Filipino
workers to multilateral convention, declaration
or resolutions pertaining to the protection of
migrant workers rights. The Department of
Foreign Affairs is also mandated to make an
assessment of rights and avenues of redress
under international and regional human rights
systems that are available to Filipino migrant
workers who are victims of abuse and violation
and, as far as practicable and through the
Legal Assistant for Migrant Workers Affairs
created under this Act, pursue the same on

behalf of the victim if it is legally impossible
to file individual complaints. If a complaints
machinery is available under international or
regional systems, the Department of Foreign
Affairs shall fully apprise the Filipino migrant
workers of the existence and effectiveness of
such legal options.
IV. GOVERNMENT AGENCIES
Section 23. Role of Government Agencies. - The following

government agencies shall perform the
following to promote the welfare and protect
the rights of migrant workers and, as far as
applicable, all overseas Filipinos:
(a) Department of Foreign Affairs. - The
Department, through its home office or
foreign posts, shall take priority action its
home office or foreign posts, shall take
priority action or make representation with
the foreign authority concerned to protect
the rights of migrant workers and other
overseas Filipinos and extend immediate
assistance including the repatriation of
distressed or beleaguered migrant workers
and other overseas Filipinos;
(b) Department of Labor and Employment
- The Department of Labor and
Employment shall see to it that labor
and social welfare laws in the foreign
countries are fairly applied to migrant

workers and whenever applicable, to
other overseas Filipinos including the
grant of legal assistance and the referral
to proper medical centers or hospitals:
(b.1)
Philippine Overseas Employment
Administration - Subject to
deregulation and phase out as provided
under Sections 29 and 30 herein, the
Administration shall regulate private
sector participation in the recruitment
and overseas placement of workers by
setting up a licensing and registration
system. It shall also formulate and
implement, in coordination with
appropriate entities concerned, when
necessary employment of Filipino
workers taking into consideration
their welfare and the domestic
manpower requirements.
(b.2)
Overseas Workers Welfare
Administration - The Welfare
Officer or in his absence, the
coordinating officer shall provide
the Filipino migrant worker and his
family all the assistance they may need
in the enforcement of contractual
obligations by agencies or entities
and/or by their principals.
In the performance of this functions, he shall
make representation and may call on the
agencies or entities concerned to conferences

or conciliation meetings for the purpose of
settling the complaints or problems brought
to his attention.
V. THE LEGAL ASSISTANT

FOR MIGRANT WORKERS AFFAIRS
Section 24. Legal Assistance for Migrant Workers Affairs.

- There is hereby created the position of
Legal Assistant for Migrant Workers Affairs
under the Department of Foreign Affairs
who shall be primarily responsible for the
provision and overall coordination of all legal
assistance services to be provided to Filipino
migrant workers as well as overseas Filipinos
in distress. He shall have the rank, salary and
privileges equal to that of an undersecretary
of said Department.
The said Legal Assistant for Migrant
Workers Affairs shall be appointed by the
President and must be of proven competence
in the field of law with at least ten (10) years
of experience as a legal practitioner and must
not have been a candidate to an elective office
in the last local or national elections.
Among the functions and responsibilities of the
aforesaid Legal Assistant are:
(a) To issue the guidelines, procedures and
criteria for the provisions of legal assistance
services to Filipino migrant workers;
(b) To establish close linkages with the

Department of Labor and Employment,
the POEA, the OWWA and other
government agencies concerned, as well
as with non-governmental organizations
assisting migrant workers, to ensure
effective coordination and cooperation
in the provision of legal assistance to
migrant workers;
(c) To tap the assistance of reputable law firms
and the Integrated Bar of the Philippines
and other bar associations to complement
the governments efforts to provide legal
assistance to migrant workers;
(d) To administer the legal assistance fund for
migrant workers established under Section
25 hereof and to authorize disbursements
there from in accordance with the purposes
for which the fund was set up; and
(e) To keep and maintain the information
system as provided in Section 20. The
legal Assistant for Migrant Workers
Affairs shall have authority to hire private
lawyers, domestic or foreign, in order to
assist him in the effective discharge of the
above functions.
Section 25. Legal Assistance Fund - There is hereby
established a legal assistance fund for migrant
workers, herein after referred to as Legal
Assistance fund, in the amount of One
hundred million pesos (P100,000,000.00) to be
constituted from the following sources:

Fifty million pesos (P50,000,000.00) from the
Contingency Fund of the President;
Thirty million pesos (P30,000,000.00) from the
Presidential Social Fund; and
Twenty million pesos (P20,000,000.00) from
the Welfare Fund for Overseas Workers
established under Letter of Instruction No.
537, as amended by Presidential Decree Nos.
1694 and 1809.
Any balances of existing fund which have
been set aside by the government specifically
as legal assistance or defense fund to help
migrant workers shall, upon effectivity of
this Act, to be turned over to, and form part
of, the Fund created under this Act.
Section 26. Uses of the Legal Assistance Fund. - The
Legal Assistance Fund created under the
preceeding section shall be used exclusively
to provide legal services to migrant workers
and overseas Filipinos in distress in accordance
witht the guidelines, criteria and procedures
promulgated in accordance with Section 24 (a)
hereof.The expenditures to be charged against
the Fund shall include the fees for the foreign
lawyers to be hired by the Legal Assistance for
Migrant Workers Affairs to represent migrant
workers facing charges abroad, bail bonds to
secure the temporary release of workers under
detention, court fees and charges and other
litigation expenses.
VI. COUNTRY - TEAM APPROACH
Section 27. Priority Concern of Philippine Foreign Service

Posts. - The country team approach, as
enunciated under Executive Order No.
74, series of 1993, shall be the mode
under which Philippine embassies or their
personnel will operate in the protection
of the Filipino migrant workers as well
as in the promotion of their welfare. The
protection of the Filipino migrant workers
and the promotion of their welfare, in
particular, and the protection of the dignity
and fundamental rights and freedoms of
the Filipino citizen abroad, in general,
shall be the highest priority concerns of
the Secretary of Foreign Affairs and the
Philippine Foreign Service Posts.
Section 28. Country-Team Approach - Under the
country-team approach, all officers,
representatives and personnel of the
Philippine government posted abroad
regardless of their mother agencies
shall, on a per country basis, act as one
country-team with a mission under the
leadership of the ambassador. In this
regard, the ambassador may recommend
to the Secretary of the Department of
Foreign Affairs the recall of officers,
representatives and personnel of the
Philippine government posted abroad for
acts inimical to the national interest such

as, but not limited to, failure to provide
the necessary services to protect the rights
of overseas Filipinos.
Upon receipt of the recommendation
of the ambassador, the Secretary of the
Department of Foreign Affairs shall, in
the case of officers, representatives and
personnel of other departments, endorse
such recommendation to the department
secretary concerned for appropriate
action. Pending investigation by an
appropriate body in the Philippines, the
person recommended for recall may be
placed under preventive suspension by the
ambassador.
In host countries where there are Philippine
consulates, such consulates shall also
constitute part of the country-team under
the leadership of the ambassador.
In the implementation of the country-
team approach, visiting Philippine
delegations shall be provided full support
and information.
VII. DEREGULATION AND PHASE-OUT
Section 29. Comprehensive Deregulation Plan on

Recruitment Activities. - Pursuant to
a progressive policy of deregulation
whereby the migration of workers becomes
strictly a matter between the worker and

his foreign employer, the DOLE within
one (1) year from the effectivity of this
Act, is hereby mandated to formulate a
five-year comprehensive deregulation
plan on recruitment activities taking into
account labor market trends, economic
conditions of the country and emergency
circumstances which may affect the welfare
of migrant workers.
Section 30. Gradual Phase-Out of Regulatory Functions.
- Within a period of five (5) years from
the effectivity of this Act, the DOLE shall
phase out the regulatory functions of
the POEA pursuant to the objectives of
deregulation.
VII. PROFESSIONAL AND OTHER

HIGHLY-SKILLED FILIPINOS ABROAD
Section 31. Incentives to Professionals and Other Highly-

Skilled Filipinos Abroad. - Pursuant to the
objective of encouraging professionals
and other highly-skilled Filipinos abroad
especially in the field of science and
technology to participate in, and contribute
to national development, the government
shall provide proper and adequate incentives
and programs so as to secure their services in
priority development areas of the public and
private sectors.
IX. MISCELLANEOUS PROVISIONS
Section 32. POEA and OWWA Board; Additinal

Memberships. - Notwithstanding any
provision of law to the contrary, the
respective Boards of the POEA and the
OWWA shall, in addition to their present
composition, have three (3) members each
who shall come from the women, sea-based
and land-based sectors, respectively, to be
appointed by the President in the same
manner as the other members.
Section 33. Report to Congress. - In order to inform the
Philippine Congress on the implementation
of the policy enunciated in Section 4 hereof,
the Department of Foreign Affairs and the
Department of Labor and Employment
shall submit to the said body a semi-annual
report of Philippine foreign posts located in
countries hosting Filipino migrant workers.
The report shall not be limited to the
following information:
(a) Masterlist of Filipino migrant workers,
and inventory of pending cases involving
them and other Filipino nationals
including those serving prison terms;
(b) Working conditions of Filipino migrant
workers;
(c) Problems encountered by the migrant
workers, specifically violations of their
rights;
(d) Initiative/actions taken by the Philippine

foreign posts to address the problems of
Filipino migrant workers;
(e) Changes in the laws and policies of host
countries; and
(f) Status of negotiations on bilateral labor
agreements between the Philippines and
the host country.
Any officer of the government who fails to
report as stated in the preceeding section
shall be subjected to administrative penalty.
Section 34. Representation in Congress - Pursuant to Section
3(2), Article VI of the Constitution and in line
with the objective of empowering overseas
Filipinos to participate in the policy-making
process to address Filipino migrant concerns,
two (2) sectoral representatives for migrant
workers in the House of Representatives shall
be appointed by the President from the ranks
of migrant workers: Provided, that at least
one (1) of the two (2) sectoral representatives
shall come from the women migrant workers
sector: Provided, further, that all nominees
must have at least two (2) years experience as
a migrant worker.
Section 35. Exemption From Travel Tax and Airport Fee.
- All laws to the country notwithstanding,
the migrant worker shall be exempt from the
payment of travel tax and airport fee upon
proper showing of proof of entitlement by
the POEA.
Section 36. Non-Increase of Fees; Abolition of Repatration

Bond. - Upon approval of this Act, all fees
being charged by any government office on
migrant workers shall remain at their present
levels and the repatriation bond shall be
established.
Section 37. The Congressional Migrant Workers
Scholarship Fund - There is hereby created a
Congressional Migrant Workers Scholarship
Fund which shall benefit deserving migrant
workers and/or their immediate descendants
below twenty-one (21) years of age who
intent to pursue courses or training primarily
in the field of science and technology. The
initial seed fund of two hundred million
pesos (P200,000,000.00) shall be constituted
from the following sources:
(a) Fifty million pesos (P50,000,000.00)
from the unexpected Countrywide
Development Fund for 1995 in equal
sharing by all members of Congress; and
(b) The remaining one hundred fifty million
pesos (P150,000,000.00) shall be funded
from the proceeds of Lotto.
The Congressional Migrant Workers
Scholarship Fund as herein created shall be
administered by the DOLE in coordination with
the Department of Science and Technology
(DOST). To carry out the objectives of
this section, the DOLE and the DOST shall
formulate the necessary rules and regulations.
Section 38. Appropriation and Other Sources of Funding.

- The amount necessary to carry out the
provisions of this Act shall be provided for
in the General Appropriations Act of the
year following its enactment into law and
thereafter.
Section 39. Migrant Workers Day.- The day of signing
by the President of this Act shall be
designated as the Migrant Workers Day and
shall henceforth be commemorated as such
annually..
Section 40. Implementing Rules and Regulations. - The
departments and agencies charged with
carrying out the provisions of this Act shall,
within ninety (90) days after the effectivity
of this Act, formulate the necessary rules and
regulations for its effective implementation.
Section 41. Repealing Clause. - All laws, decrees, executive
orders, rules and regulations, or parts thereof
inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
Section 42. Separability Clause. - If, for any reason,
any section or provision of this Act is held
unconstitutional or invalid, the other sections
or provisions hereof shall not be affected
thereby.
Section 43. Effectivity Clause. - This Act shall take effect
after fifteen (15) days from its publication
in the Official Gazette or in at least two (2)
national newspapers of general circulation
whichever comes earlier.
Omnibus Rules and Regulations Implementing The

Migrant Workers and Overseas Filipinos Act of 1995
I. GENERAL POLICY STATEMENT
Section 1. Declaration of Policies. -

(a) In the pursuit of an independent
foreign policy and while considering
national sovereignty, territorial integrity,
national interest and the right to self-
determination paramount its relations
with other states, the State shall, all times,
uphold the dignity of its citizens whether
in the country or overseas, in general, the
Filipino migrant workers, in particular.
(b) The State shall afford full protection
to labor, local and overseas, organized
and unorganized, and promote full
employment and equality of employment
opportunities for all. Toward this end, the
State shall provide adequate and timely
social, economic and legal services to
Filipino migrant workers.
(c) While recognizing the significant
contribution of Filipino migrant workers
to the national economy through their
foreign exchange remittances, the State
does not promote overseas employment
as a means to sustain economic growth
and achieve national development. The
existence of the overseas employment
program rest solely on the assurance that

the dignity and fundamental human rights
and freedom of the Filipino citizen shall not,
at any time, be compromised or violated.
The State, therefore, shall continuously
create local employment opportunities
and promote the equitable distribution of
wealth and the benefits of development.
(d) The State affirms the fundamental
equality before the law of women and
men and the significant role of women
in nation-building. Recognizing the
contribution of women migrant workers
and their particular vulnerabilities, the
State shall apply gender sensitive criteria
in the formulation and implementation
of policies and programs affecting
migrant workers and the composition of
bodies tasked for the welfare of migrant
workers.
(e) Free access to the courts and quasi-judicial
bodies and adequate legal assistance
shall not be denied to any persons by
reason of poverty. In this regard, it is
imperative that an effective mechanism
be instituted to ensure that the rights and
interest of distressed overseas Filipinos,
in general, and Filipino migrant
workers, in particular, documented or
undocumented, are adequately protected
and safeguarded.
(f) The right of Filipino migrant workers

and all overseas Filipinos to participate
in the democratic decision-making
processes of the State and to be
represented in institutions relevant to
overseas employment is recognized and
guaranteed.
(g) The State recognizes that the ultimate
protection to all migrant workers is the
possession of skills. Pursuant to this and
as soon as practicable, the government
shall deploy and/or allow the deployment
only to skilled Filipino workers.
(h) Non-governmental organizations, duly
recognized as legitimate, are partners of
the State in the protection of Filipino
migrant workers and in the promotion
of their welfare, the State shall cooperate
with them in a spirit of trust and mutual
respect.
II. DEFINITION OF TERMS
Section 2. Definitions. -
(a) Migrant Workers or Overseas Filipino
Workers a person who is to be engaged,
is engaged, or has been engaged in a
remunerated activity in a state which he
or she is not a legal resident. A person to
be engaged in a remunerated activity
refers to an applicant worker who has
been promised or assured employment

overseas and acting on such promise or
assurance sustains damage and/or injury.
(b) Overseas Filipinos are migrant
workers, other Filipino nationals and
their dependents abroad.
(c) Overseas Filipino in distress Overseas
Filipinos as defined in Section3(c) of the Act
shall be deemed in distress in cases where
they have valid medical, psychological
or legal assistance problems requiring
treatment, hospitalization, counseling, legal
representation is specified in Sections 24
and 26 or any other kind of intervention
with the authorities in the country where
they are found.
(d) Legal Resident a person who has
obtained permanent residency status in
accordance with the law of the host country.
(e) Documented Migrant Workers
(1) those who possess valid passports and visas
or permits to stay in the host country and
whose contracts of employment have been
processed by the POEA if required by law
or regulation; or
(2) those registered by the Migrant-
Workers and Other Overseas Filipinos
Resource Center or by the Embassy.
Those who do not fall under the
preceding paragraph are considered
undocumented migrant workers.
(f) Undocumented Filipinos

(1) Those who acquired their passports
through fraud or misrepresentation;
(2) Those who possess expired visas or
permits to stay;
(3) Those who have no travel document
what so ever (4) Those who have valid
but in appropriate visas;
(g) Gender Sensitivity cognizant of the
inequalities and inequities prevalent in
society between women and men and a
commitment to address issues with concern
for the respective interest of the sexes.
(h) Legal Assistance includes, in appropriate
cases, giving legal advice, active participation
in litigation whenever allowed by local laws,
hiring of private lawyers, documentation
assistance payment of bail bonds, court fees
and other litigation expenses.
(i) Bonfire Non-Government Organizations
(NGOs) non-government organizations
duly registered with appropriate Philippine
government agencies which, active partners
of the Philippine Government in the
protection of Filipino migrant workers and
the promotion of their welfare.
(j) Skilled Workers those who have obtained
an academic degree or sufficient training
or experience in the job for which they
are applying, as may be determined by the
Secretary of Labor and Employment.
(k) Underage Migrant Workers those

who are below 18 years or below the
minimum age requirement for overseas
employment as determined by the
(l) Employment Agency any person,
partnership or corporation duly
licensed by the Secretary of Labor
and Employment to engage in the
recruitment and placement of workers
for overseas employment for a fee which
is charged, directly or indirectly, from the
workers or employers or both.
(m) Manning Agency any person,
licensed by the Secretary of Labor
and Employment to engage in the
recruitment and placement of seafarers
for vessels plying international waters
and for related maritime activities.
(n) Service Contractor any person,-
licensed by the Secretary of Labor and
Employment to recruit workers for its
accredited projects or contracts overseas.
(o) Labor Code Presidential Decree No.
442, as amended.
(p) Act the Migrant Workers and Overseas
Filipinos Act of 1995, to be used
interchangeably with the R.A 8042.
(q) DFA-the Department of Foreign Affairs.
(r) DOLE -the Department of Labor and

Employment.
(s) POEA the Philippine Overseas
Employment Administration.
(t) OWWA the Overseas Workers Welfare
Administration.
(u) NLRC -the National Labor Relations
Commission.
(v) BLE the Bureau of Local Employment
(w) TESDA the Technical Education and
Skills Development Authority.
(x) DOJ the Department of Justice.
(y) DOST - the Department of Science and
Technology.
III. DEPLOYMENT
Section 3. Guarantee of Migrant Workers Rights. The

Secretary of Labor and Employment shall
deploy or allow the deployment of Filipino
migrant workers only in countries where
their rights are protected, recognizing
any of the following as a guarantee for the
protection of the rights of migrant workers:
(a) The country has existing labor and social
laws protecting the rights of migrant
workers;
(b) The country is a signatory to multilateral
conventions declarations or resolutions
relating to the protection of migrant
workers;
(c) The country has concluded a bilateral

agreement or arrangement with
the Philippine Government on the
protection of the rights of Overseas
Filipino Workers; and
(d) The host country is taking positive,
concrete measures to protect the rights
of migrant workers. The POEA shall
process overseas employment contracts
only for countries meeting any of the
above criteria, as determined by the
Section 4. Deployment of Skilled Workers. - As soon as
adequate mechanisms for determination
of skills are in place and consistent with
national interest, the Secretary of Labor and
Employment shall allow the deployment
only of skilled Filipino workers.
Section 5. Ban on Deployment. - Notwithstanding the
provisions of Sections 3 and 4 of these Rules,
the Secretary of Labor and Employment,
in pursuit of the national interest or-when
public welfare so requires, may, at any time,
terminate or impose ban on the deployment
of migrant workers.
Section 6. Travel Advisory. - The DFA through the POEA
shall issue travel advisories or disseminate
information on labor and employment
conditions, migration realities and other facts,
as well as adherence of particular countries
to international standards on human and
workers rights which will adequately

prepare individuals into making informed
and intelligent decisions about overseas
employment. The POEA shall publish,
at least once a month, such advisory in a
newspaper of general circulation.
The POEA may undertake other programs
or resort to other modes of information
and dissemination campaign, such as the
conduct of nationwide, comprehensive and
sustainable Pre-Employment Orientation
Seminars.
IV. REGULATION OF
PRIVATE SECTOR PARTICIPATION
Section 7. Role of POEA. - Subject to deregulation and

phase out as provided under Sections 29
and 30 of the Act, the POEA shall continue
to regulate private sector participation in the
recruitment and overseas placement of workers
through its licensing and registration system
pursuant to its Rules and Regulations on
Overseas Employment.
POEA shall formulate and implement,
in coordination with appropriate entities
concerned when necessary, a system for
promoting and monitoring the overseas
employment of Filipino workers taking into
consideration their welfare and the domestic
manpower requirements. The POEA
shall come up with a package of incentives

for deserving manning agencies and service
contractors, along with the policy that the
deployment of workers by such entities shall
be encouraged.
V. FEES AND OTHER COSTS
Section 8. Government Fees and Administrative Costs. -

All fees for services being charged by any
government office on migrant workers as of
7 June 1995 shall not be increased. All other
services rendered by the DOLE and other
government agencies in connection with the
recruitment introduction and placement of and
assistance to migrant workers shall be rendered
free. The administrative cost thereof shall not
be borne by the worker.
The migrant workers are exempt from the
payment of travel tax and airport fee upon
proper showing of Overseas Employment
Certificate issued by the POEA.
VI. ILLEGAL RECRUITMENT
Section 9. Definition. - For purposes of the Act, illegal

recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing,
hiring, or procuring workers and includes
referring, contract services, promising
or advertising for employment abroad,
whether for profit or not, when undertaken

by a non-licensee or non-holder of authority
contemplated under Article 13(f) of the Labor
Code of the Philippines: Provided, That any
such non-licensee or non-holder who, in any
manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed
so engaged. It shall likewise include the following
acts committed by any person whether or not a
holder of a license or authority:
(a) To charge or accept directly or indirectly
any amount Greater than !ha! specified in
the schedule of allowable fees prescribed by
or to make a worker pay the recruiter or
its agents any amount greater than that
actually loaned or advanced to him;
(b) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony,
information or document pr commit any
act of misrepresentation for the purpose
of securing a license or authority under
the Labor Code;
(d) To induce or attempt to induce a worker
already employed to quit his employment
in order to offer him another unless the
transfer is designed to liberate a worker
from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence any

person or entity not to employ any worker
who has not applied for employment
through his agency;
(f) To engage in the recruitment or placement
of workers in jobs harmful to public health
or morality or to the dignity of the Republic
of the Philippines as may be prohibited by
law or duly constituted authority;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor
and Employment or by his/her duly
authorized representative;
(h) To fail to submit reports on the status
of employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
other matters or information as may be
required by the Secretary of Labor and
Employment under penalty of law;
(i) To substitute or alter to the prejudice
of the worker, employment contracts
approved and verified by the DOLE from
the time of actual signing thereof by the
parties up to and including the period of
the expiration of the same without the
approval of the DOLE;
(j) For an officer or agent of a recruitment or
placement agency to became officer or
member of the Board of any corporation
engaged in travel agency or to be engaged
directly or indirectly in the management of

a travel agency;
(k) To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under the Labor Code
and its implementing rules and regulations;
(l) To fail to actually deploy without valid
reason as determined by the DOLE; and
(m) To fail to reimburse expenses incurred
by the worker in connection with his/
her documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the workers fault.
Section 10. Crime Involving Economic Sabotage. - Illegal
recruitment when committed by a syndicate
or in large scale shall be considered an
offense involving economic sabotage. Illegal
recruitment is deemed committed by a
syndicate if carried out by a group of three (3)
or more persons conspiring or confederating
with one another. it is deemed committed in
large scale if committed against three (3) or
more persons individually or as a group.
Section 11. Persons Responsible. - The persons criminally
liable for the above offenses are the
principals, accomplices and accessories. In
case of juridical persons, the officer having
control, management or direction of their
business shall be liable.
Section 12. Independent Administrative Action. - The

institution of the criminal action is without
prejudice to any administrative action against
the licensee or holder of authority cognizable
by the POEA which could proceed
independently of the criminal action.
VII. PROHIBITION ON
GOVERNMENT PERSONNEL
Section 13. Disqualification. - The following personnel

shall be prohibited from engaging directly or
indirectly in the business of recruitment of
migrant workers;
(a) Any official or employee of the DOLE,
POEA OWWA, DFA, DOJ and other
government agencies involved in the
implementation of this Act, regardless of
the status of his/her employment; and
(b) Any of his/her relatives within the fourth
civil degree of consanguinity or affinity.
Any government official or employee found
to be violating this Section shall be charged
administratively, according to Civil Service
Rules and Regulations without prejudice to
criminal prosecution.
The government agency concerned shall
monitor and initiate, upon its initiative or
upon the petition of any private individual,
action against erring officials and employees,
and/or their relatives.
VIII. ANTI-ILLEGAL RECRUITMENT

PROGRAMS
Section 14. POEA Programs. - The POEA shall

adopt policies and procedures, prepare
and implement programs toward the
eradication of illegal recruitment
activities such as, but not limited to the
following:
(a) Providing legal assistance to victims
of illegal recruitment and related cases
which are administrative or criminal in
nature;
(b) Prosecution of illegal recruiters;
(c) Special operations such as surveillance
of persons and entities suspected to be
engaged in illegal recruitment; and
(d) Information and education campaign.
Whenever necessary, the POEA shall
coordinate with other appropriate entities
in the implementation of said programs.
Section 15. Legal Assistance. - The POEA shall provide
free legal service to victims of illegal
recruitment and related cases which are
administrative or criminal in nature in
the form of legal advice, assistance in the
preparation of complaints and supporting
documents, institution of criminal actions
and whenever necessary, provide counseling
assistance during preliminary investigation
and hearings.
Section 16. Receiving of Complaints for illegal Recruitment

- Victims of illegal recruitment and related
cases which are administrative or criminal
in nature may file with the POEA a report
or complaint in writing and under oath for
assistance purposes.
In regions outside the National Capital
Region, complaints and reports involving
illegal recruitment may be filed with the
appropriate regional office of the POEA or
DOLE.
Section 17. Action on the Complaint/Report. - Where
the complaint report alleges that illegal
recruitment activities are ongoing, surveillance
shall be conducted and if such activities are
confirmed, issuance of closure order may be
recommended to the POEA Administrator
through the Director of the Licensing and
Regulation Office (Director LRO). If
sufficient basis for criminal action is found,
the case shall be immediately forwarded to the
appropriate office for such action.
Section 18. Surveillance. - The POEA and/or designated
official in the DOLE regional offices may on
his own initiative conduct surveillance on the
alleged illegal recruitment activities.
Within two (2) days from the termination of
surveillance, report supported by an affidavit,
shall be submitted to the Director-LRO or
the Regional Director concerned, as the case
may be.
Section 19. Issuance of Closure Order. - The Secretary

of Labor and Employment or the POEA
Administrator or the DOLE Regional
Director of the appropriate regional office
outside the National Capital Region, or
their duly authorized representatives, may
conduct an ex parte preliminary examination
to determine whether the activities of a
non-licensee constitute a danger to national
security and public order or will lead to further
exploitation of job seekers. For this purpose,
the POEA Administrator or the Regional
Director concerned or their duly authorized
representatives, may examine personally the
complainants and/or their witnesses in the
form of searching questions and answers
and shall take their testimony under oath.
The testimony of the complainants and/
or witnesses shall be reduced in writing and
signed by them.
If upon the preliminary examination or
surveillance, the Secretary of Labor and
Employment, the POEA Administrator
or DOLE Regional Director is satisfied
that such danger or exploitation exists, a
written order may be issued for the closure
of the establishment being used for illegal
recruitment activity.
In case of a business establishment whose
license or permit to operate a business was
issued by the local government, the Secretary

of Labor and Employment, the POEA
Administrator or the Regional Director
concerned shall likewise recommend to
the granting authority the immediate
cancellation/revocation of the license or
permit to operate its business.
Section 20. Implementation of Closure Order. - Closure order
shall be served upon the offender or the person
in charge of the establishment subject thereof.
The closure shall be effected by sealing the
establishment and posting a notice of such
closure in bold letters at a conspicuous place in
the premises of the establishment. Whenever
necessary, the assistance and support of the
appropriate law enforcement agencies may be
requested for this purpose.
Section 21. Report on Implementation. - A report on the
implementation of the closure order executed
under oath, stating the details of the proceedings
undertaken shall be submitted to the Director-
LRO or the Regional Director concerned, as
the case may be, within two (2) days from the
date of implementation.
Section 22. Institution of Criminal Action. - The Secretary
of Labor and Employment, the POEA
Administrator or the Regional Director
concerned, or their duly authorized
representatives, or any aggrieved person,
may initiate the corresponding criminal
action with the appropriate office.
Where a complaint is filed with the POEA

and the same is proper for preliminary
investigation, it shall file the corresponding
complaint with the appropriate officer, with
the supporting documents.
Section 23. Motion to Lift A Closure Order. - A motion to
lift a closure order which has already been
implemented may be entertained only when
filed with the Licensing and Regulation Office
(LRO) within ten (10) calendar days from the
date of implementation thereof. The motion
shall clearly state the grounds upon which it
is based, attaching thereto the documents in
support thereof. A motion to lift which does
not conform with the requirements herein set
forth shall be denied outrightly.
Section 24. Who May File. - The motion to lift a closure
order may be filed only by the following:
(a) The owner of the building or his/her duly
authorized representative;
(b) The building administrator or his/her
duly authorized representative;
(c) The person or entity against whom the
closure order was issued and implemented
or the duly authorized representative; or
(d) Any other person or entity legitimately
operating within the premises closed/
padlocked whose operations/activities are
distinct from the recruitment activities of
the person/entity subject of the closure
order.
Section 25. Grounds for Lifting/Re-Opening. - Lifting of

the closure order and/or re-opening of the
office closed or padlocked may be granted on
any of the following grounds:
(a) That the office is not the subject of the
closure order;
(b) That the contract of lease with the owner of
the building or the building administrator
has already been cancelled or terminated.
The request to re-open shall be duly
supported by an affidavit of undertaking
either of the owner of the building or the
building administrator that the same will
not be leased/rented to any other person/
entity for recruitment purposes without the
necessary license from the POEA;
(c) That the office is shared by a person/entity
not involved in illegal recruitment activities,
whether directly or indirectly; or
(d) Any other ground that the POEA may
consider as valid and meritorious.
Lifting of a closure order is without prejudice
to the filing of a criminal complaint with the
appropriate office against the person alleged
to have conducted illegal recruitment
activities.
Section 26. Appeal. - The order of the POEA
Administrator denying the motion to lift
may be appealed to the Secretary of Labor
and Employment within ten (10) days from
service or receipt thereof.
Section 27. Re-Padlocking of Office. - Where a re-opened

office was subsequently confirmed to be
used for illegal recruitment activities, a new
closure order shall be issued which shall not
be subject to a motion to lift.
IX. PRE-EMPLOYMENT AND

DISCIPLINARY ACTION CASES
Section 28. Jurisdiction of the POEA. - The POEA shall

exercise original and exclusive jurisdiction to
hear and decide:
(a) all cases, which are administrative
in character, involving or arising out of
violations of rules and regulations relating
to licensing and registration of recruitment
and employment agencies or entities; and
(b) disciplinary action cases and other special
cases, which are administrative in character,
involving employers, principals, contracting
partners and Filipino migrant workers.
Section 29. Venue. - The cases mentioned in Section 28(a)
of this Rule, may be filed with the POEA
Adjudication Office or the DOLE/POEA
regional office of the place where the complaint
applied or was recruited, at the option of the
complainant. The office with which the complaint
was first filed shall take cognizance of the case.
Disciplinary action cases and other special cases, as
mentioned in the preceding Section, shall be filed
with the POEA Adjudication Office.
X. MIGRANT WORKERS
LOAN GUARANTEE FUND
Section 30. Definitions.

(a) Pre-Departure Loans refers to loans
granted to departing migrant workers
covered by new contracts to satisfy their
pre-departure requirements such as
payments for placement/processing fees,
airplane fare, subsistence allowance, cost
of clothing and pocket money.
(b) Family Assistance Loans refers to loans
granted to currently employed migrant
workers or their eligible dependents/
families in the Philippines to tide them
over during emergency situations.
(c)
Guarantee Agreement refers to a
contract between the participating
financial institution and OWWA whereby
the latter pledges to pay a loan obtained
by a migrant worker from the former in
case the worker defaults.
(d) GFIs refers to government financial
institutions.
Section 31. Loan Guarantee Fund. - The Migrant Workers
Loan Guarantee Fund is hereby established:
(a) to prevent any recruiter from taking
advantage of workers seeking employment
abroad by expanding the grant of Pre-
Departure and Family Assistance Loans to
covered migrant workers;
(b) to establish and operate a guarantee

system in order to provide guarantee
cover on the pre-departure and family
assistance loans of migrant workers who
lack or have insufficient collateral or
securities; and
(c) to ensure the participation of GFIs in
extending loan assistance to needy migrant
workers who are to be engaged or is engaged
for a remunerated activity abroad.
Section 32. Coverage and Scope. - All departing migrant
workers who need financial assistance to pay
or satisfy their pre-departure expenses may
avail of the Pre-Departure Loans.
Currently employed migrant workers or their
eligible dependents who need emergency
financing assistance may avail of the Family
Assistance Loan.
Section 33. Administration of the Fund. Pursuant to
Section 21 of the Act, the amount of One
hundred million pesos (P100,000,000.00)
from the Capital Funds of OWWA shall
constitute the Migrant Workers Loan
Guarantee Fund. The Fund, which shall be
administered by the OWWA, shall be used
exclusively to guarantee the repayment of
Pre-Departure and Family Assistance Loans
granted by participating GFIs.
All existing revolving funds earmarked for the
Pre-Departure and Family Assistance Loans
shall revert back to OWWAs Capital Fund.
Section 34. Financing Scheme. - The OWWA shall initiate

arrangements with GFIs to implement
mutually agreed financing schemes, that
will expand the Pre-Departure and Family
Assistance Loans.
Section 35. Guarantee Agreement. - No loan shall be
considered covered by a guarantee unless a
Guarantee Agreement has been prepared and
approved by both the participating financial
institution and the OWWA.
XI. CONGRESSIONAL MIGRANT WORKERS

SCHOLARSHIP PROGRAM
Section 36. Establishment of the Congressional Migrant

Workers Scholarship Fund. - There is hereby
created a Congressional Migrant Workers
Scholarship Fund which shall benefit
deserving migrant workers and/or their
immediate descendants who intend to pursue
courses or training primarily in the field of
science and technology, as defined by the
DOST.
Section 37. Sources of Fund. - The initial seed Fund of Two
hundred million pesos (P200,000,000.00)
shall be constituted from the following
sources:
(a) Fifty million pesos (P50,000,000.00)
from the unexpended Countrywide
Development Fund for 1995 in equal
sharing by all Members of Congress; and
(b) The remaining One hundred fifty million

pesos (P 50,000,000.00) shall be funded
from the proceeds of Lotto draws.
Section 38. Creation of the Scholarship Fund Committee. -
There is hereby created a Scholarship Fund
Committee to be composed of representatives
from the DOLE, DOST, POEA, OWWA,
TESDA and two (2) representatives of migrant
workers to be appointed by the Secretary of
Labor and Employment.
Section 39. Functions of the Scholarship Fund Committee.
(a) To set the coverage, criteria and standards
of admission to the Scholarship Program;
(b) To determine the amount of availment;
(c) To monitor and evaluate the program;
(d) To identify/accredit training and testing
institutions; and
(e) To perform such other functions necessary
to attain the purpose of the Fund.
Section 40. Implementing Agency. - The OWWA shall
be the Secretariat of the Scholarship Fund
Committee. As such, it shall administer the
Scholarship Program, in coordination with
the DOST.
XII. LEGAL ASSISTANT FOR

MIGRANT WORKERS AFFAIRS
Section 41. Function and Responsibilities. - The Legal

Assistant for Migrant Workers Affairs under
the Department of Foreign Affairs shall
be primarily responsible for the provision and

over-all coordination of all legal assistance
services to Filipino Migrant Workers as well as
Overseas Filipinos in distress. In the exercise
of these primary responsibilities, he/she shall
discharge the following duties and functions:
(a) Issue the guidelines, procedures and
criteria for the provision of legal
assistance services to Filipino Migrant
Workers;
(b) Establish close linkages with the DOLE,
POEA, OWWA and other government
agencies concerned, as well as with non-
governmental organizations assisting
migrant workers, to ensure effective
coordination in providing legal assistance
to migrant workers,
(c) Tap the assistance of the Integrated
Bar of the Philippines (IBP), other bar
associations, and reputable law firms, as the
need arises, to complement government
services and resources to provide legal
assistance to migrant workers;
(d) Administer the Legal Assistance Fund
for Migrant Workers and to authorize
its disbursement, subject to approved
guidelines and procedures, governing its
use, disposition and disbursement;
(e) Keep and maintain an information
system for migration as provided in Sec.
20 of the Act; and
(f) Prepare its budget for inclusion in the

Department of Foreign Affairs budget in
the annual General Appropriations Act.
Section 42. Qualifications and Authority. - The Legal
Assistant for Migrant Workers Affairs shall
be headed by a lawyer of proven competence
in the field of law with at least ten (10) years
experience as a legal practitioner and who
must not have been a candidate to an elective
office in the last local or national elections.
He/she shall be appointed by the President
of the Philippines. He/she shall have the
rank, salary, and privileges equal to that of an
Undersecretary of Foreign Affairs.
The Legal Assistant for Migrant Workers
Affairs shall have authority to hire private
lawyers, domestic or foreign, in order to
assist him/her in the effective discharge of
the functions of his/her Office.
Section 43. Legal Assistance Fund. - The Legal Assistance
Fund created under the Act shall be used
exclusively to provide legal services for
Migrant Workers and Overseas Filipinos
in distress in accordance with approved
guidelines, criteria and procedures.
It shall be used inter alia for the following
specific purposes:
(a) Payment of attorneys fees to foreign
lawyers for their services in representing
migrant workers facing criminal and
other charges;
(b) Bail bonds to secure the temporary

release of workers under detention when
so recommended by the lawyer;
(c) Court fees, charges and other litigation
expenses when so recommended by their
lawyers.
XIII. MIGRANT WORKERS AND OTHER

OVERSEAS FILIPINOS RESOURCE CENTER
Section 44. Establishment of Overseas Filipinos Resource

Center. - Pursuant to Sections 19 and 23 of
the Migrant Workers and Overseas Filipinos
Act of 1995, a Migrant Workers and Overseas
Filipinos Resource Center (Filipinos Resource
Center) shall be established in countries where
there are at least 20,000 migrant workers.
Where feasible it shall be established within the
premises of the Embassy.
When the Filipinos Resource Center is
established out side the premises of the Embassy,
the Department of Foreign Affairs shall exert its
best effort to secure appropriate accreditation
from the host government in accordance with
applicable laws and practices.
Section 45. Services. - The Filipinos Resource Center
shall provide the following services:
(a) Counseling and legal services;
(b) Welfare assistance including
the procurement of medical and
hospitalization services;
(c) Information, advisory programs to

promote social integration such as
post-arrival orientation, settlement and
community networking services and
activities for social interaction;
(d) Registration of undocumented workers to
bring them within the purview of theAct;
(e) Implementation of the Voluntary
Membership Program of OWWA;
(f) Human resource development, such as
training and skills upgrading;
(g) Gender-sensitive programs and activities to
assist particular needs of migrant workers;
(h) Orientation program for returning
workers and other migrants;
(i) Mo nito ring o f da ily sit ua t ion,
circumstances and activities affecting
migrant workers and other overseas
Filipinos;
(j) Seeing to it that labor and social welfare
laws in the host country are fairly applied
to migrant workers and other overseas
Filipinos, and
(k) Conciliation of disputes arising from
employer-employee relationship.
Section 46. Personnel. - Each Filipinos Resource Center
shall be staffed by a minimum of four (4)
personnel composed of the following:
a. a Labor Attache (DOLE)
b. Foreign Service personnel (DFA)
c. a Welfare Officer (OWWA)
d. a Center Coordinator (OWWA)

e. an interpreter, when necessary (local
hire)
When the Foreign Service Post is
deemed highly problematic and has
a concentration of Filipino migrant
workers, a lawyer and a social worker may
be deployed by concerned government
agency upon the recommendation of the
Chief of Mission.
Section 47. Administration. - The Labor Attache shall
coordinate the operation of the Filipinos
Resource Center and shall keep the Chief of
Mission informed and updated on all matters
affecting it.
Section 48. Round-the Clock Operations. - The
Filipinos Resource Center shall operate
on a 24-hour basis including Saturdays,
Sundays and holidays. A counterpart
24-hour information and Assistance
Center to ensure a continuous network
and coordinative mechanism shall be
established at the DFA.
Section 49. Budget. - The establishment, yearly
maintenance and operating costs of the
Filipinos Resource Centers, including
the costs of services and programs not
specially funded under the Act, shall be
sourced from the General Appropriations
Act (GAA) and shall be included in the
annual budget of DOLE. In the meantime,
existing Filipino Workers Development

Centers presently manned and operated
by the OWWA shall be funded by the
OWWA until such time as the operating
expenses and other related expenditures
of the Filipinos Resource Centers are
integrated in the GAA.
However, the salaries and allowances of
overseas personnel shall be sourced from
their respective agencys budget.
Section 50. Sharing of information. - The registry
of undocumented workers and other
relevant data shall be provided by the
Filipinos Resource Centers to the inter-
agency Committee on Shared Information
Systems.
XIV. ENFORCEMENT OF
CONTRACTUAL OBLIGATIONS
Section 51. Role of OWWA. - The Welfare Officer, or in

his/her absence, the Center Coordinator of
the Filipinos Resource Center shall make
proper representations with the employer/
principal and/or agency as the case may
be, through conciliation meetings or
conferences for the purpose of enforcing
contractual obligations concerning migrant
workers. For this purpose, the officer may
enlist the assistance of the OWWA Home
Office.
XV. REPATRIATION OF
FILIPINO MIGRANT WORKERS
Section 52. Primary Responsibility for Repatriation. -

The repatriation of the worker, or his/her
remains, and the transport of his/her personal
effects shall be the primary responsibility of
the principal or agency which recruited or
deployed him/her abroad. All costs attendant
thereto shall be borne by the principal or the
agency concerned.
Section 53. Repatriation of Workers. - The primary
responsibility to repatriate entails the
obligation on the part of the principal or
agency to advance the cost of plane fare
and to immediately repatriate the worker
should the need for it arise, without a
prior determination of the cause of the
termination of the workers employment.
However, after the worker has returned
to the country, the principal or agency
may recover the cost of repatriation
from the worker if the termination of
employment was due solely to his/her
fault.
Every contract for overseas employment
shall provide for the primary responsibility
of agency to advance the cost of plane fare,
and the obligation of the worker to refund
the cost thereof in case his/her fault is
determined by the Labor Arbiter.
Section 54. Repatriation Procedure. - When a need for

repatriation arises and the foreign employer
fails to provide for its cost, the responsible
personnel at site shall simultaneously notify
OWWA and the POEA of such need. The
POEA shall notify the agency concerned of
the need for repatriation. The agency shall
provide the plane ticket or the prepaid ticket
advice (PIA) to the Filipinos Resource Center
or to the appropriate Philippine Embassy;
and notify POEA of such compliance. The
POEA shall inform OWWA of the action of
the agency.
Section 55. Action on Non-Compliance. - If the employment
agency fails to provide the ticket or PTA
within 48 hours from receipt of the notice,
the POEA shall suspend the license of the
agency or impose such sanctions as it may
deem necessary. Upon notice from the
POEA, OWWA shall advance the costs of
repatriation with recourse to the agency or
principal. The administrative sanction shall
not be lifted until the agency reimburses the
OWWA of the cost of repatriation with legal
interest.
Section 56. Emergency Repatriation. - The OWWA, in
coordination with DFA, and in appropriate
situations, with international agencies, shall
undertake the repatriation of workers in
cases of war, epidemic, disasters or calamities,
natural or man-made, and other similar events
without prejudice to reimbursement by the

responsible principal or agency within sixty
(60) days of notice. In such case, POEA will
simultaneously identify and give notice to
the agencies concerned.
Section 57. Mandatory Repatriation of Underage Migrant
Workers. - The responsible officer at the
foreign service post shall immediately
cause the repatriation of underage Filipino
migrant workers. The cost attendant to this
activity shall be borne correspondingly by
the agency and/or principal or the OWWA
as the case maybe.
Section 58. Other Cases of Repatriation. - In all cases
where the principal or agency of the worker
cannot be identified, cannot be located or
had ceased operations, and the worker is
in need and without means, the OWWA
personnel at jobsite, in coordination with
the DFA, shall cause the repatriation.
All costs attendant to repatriation borne
by the OWWA are chargeable to the
Emergency Repatriation Fund provided
in the Act, without prejudice to the
OWWA requiring the agency/employer
or the worker to reimburse the cost of
repatriation, in appropriate cases.
Section 59. Emergency Repatriation Fund. - When
repatriation becomes immediate and
necessary, the OWWA shall advance
the needed costs from the Emergency
Repatriation Fund without prejudice

to reimbursement by the deploying
agency and/or principal, or the worker
in appropriate cases. Simultaneously, the
POEA shall ask the concerned agency
to work towards reimbursement of costs
advanced by the OWWA. In cases where
the cost of repatriation shall exceed One
Hundred Million (P100,000,000.00) Pesos,
the OWWA shall make representation with
the Office of the President for immediate
funding in excess of said amount.
Section 60. Prohibition on Bonds and Deposits. - In no case
shall an employment agency require any
bond or cash deposit from the worker to
guarantee performance under the contract
or his/her repatriation.
Section 61. Abolition of Mandatory Repatriation Bond. -
Pursuant to Section 36 of R.A 8042, the
mandatory repatriation bond is abolished as
of 7 June 1995.
XVI. MONEY CLAIMS
Section 62. Jurisdiction of the Labor Arbiters. - The

labor Arbiters of the NLRC shall have
the original and exclusive jurisdiction to
hear and decide all claims arising out of
employer-employee relationship or by
virtue of any law or contract involving
Filipino workers for overseas deployment
including claims for actual, moral,

exemplary and other forms of damages,
subject to the rules and procedures of the
NLRC.
Section 63. Pending Cases. - All unresolved money claims
pending at POEA as of 15 July 1995 shall be
referred to NLRC for disposition.
Section 64. Solidary Liability. - The liability of the
principal/employer and the recruitment/
placement agency on any and all claims
under this Rule shall be joint and solidary.
This liability shall be incorporated in the
contract for overseas employment and shall
be a condition precedent for its approval.
The performance bond to be filed by the
recruitment/placement agency, as provided
by law, shall be answerable for all money
claims or damages that may be awarded to
the workers.
If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be,
shall themselves be jointly and solidarily
liable with the corporation or partnership for
the aforesaid claims and damages.
Such liabilities shall continue during
the entire period or duration of the
employment contract and shall not be
affected by any substitution, amendment
or modification made locally or in a
foreign country of the said contract.
Section 65. Compromise Agreement. - Any compromise,

amicable settlement or voluntary agreement
on money claims inclusive of damages under
this Rule shall be paid within four (4) months
from the approval of the settlement by the
appropriate authority.
XVII. RE-PLACEMENT AND

MONITORING CENTER (RPM CENTER)
Section 66. Re-Placement and Monitoring Center. - A Re-

Placement and Monitoring Center (RPM Center)
is hereby created in the DOLE for returning
Filipino migrant workers which shall:
(a) provide a mechanism for their
reintegration into the Philippine society;
(b) serve as a promotion house for their local
employment; and
(c) tap their skills and potentials for national
development.
The RPM Center shall be under the
administrative supervision and control of
the Secretary of Labor and Employment.
The RPM Center, while serving the needs
of returning migrant workers, shall likewise
provide support to related programs in the
Filipinos Resource Centers.
Section 67. Secretariat. - A Secretariat shall be created
to be composed of technical staff from, but
not limited to, the OWWA, POEA, TESDA,
and BLE; and shall be headed by a Program
Manager to be designated by the Secretary of

Labor and Employment. The Secretariat shall
be the coordinating and monitoring body of
the RPM Center.
Section 68. Participation of Government, Private Sector and
NGOs. - The DOLE, in pursuit of the objectives
and functions of the Center, may request the
participation of other government agencies, the
private sector and non-government organizations.
Each participating entity shall identify and develop
programs or services related to reintegration
for the attainment of the Centers objectives. A
Memorandum of Agreement (MOA) shall be
entered into by the participating entities to define
their respective roles.
Section 69. Functions of the Center.
(a) Develop livelihood programs and
projects for returning Filipino migrant
workers in coordination with the
private sector;
(b) Coordinate with appropriate private and
government agencies in the promotion,
development, re-placement and the full
utilization of the potentials of returning
migrant workers;
(c) Institute, in cooperation with other
government agencies concerned, a computer-
based information system on skilled Filipino
migrant workers which shall be accessible to
all local recruitment agencies and employers,
both public and private;
(d) Provide a periodic study and assessment

of job opportunities for returning Filipino
migrant workers;
(e) Develop and implement other appropriate
programs to promote the welfare of
returning Filipino migrant workers; and
(f) In coordination with DOST, provide
incentives for professionals and other highly
skilled Filipinos abroad, especially in the
field of science and technology, to participate
in and contribute to national development.
Section 70. Funding for the Center. -
(a) Funds necessary for the establishment
and initial implementation of the programs
or services of the RPM Center shall be
sourced from each of the participating
agencies as may be determined by the
(b) Funds for the operation of the RPM
Center shall come from the General
Appropriations Act and shall be integrated
into the annual budget of the DOLE.
XVIII. SHARED GOVERNMENT

INFORMATION SYSTEM FOR
MIGRATION
Section 71. Composition. - Said Inter-Agency Committee

shall be composed of the following agencies:
(a) The Department of Foreign Affairs, as
Chairman,
(b) Department of Labor and Employment,

as Vice chairman;
(c) Department of Justice;
(d) Department of Tourism;
(e) Philippine Overseas Employment
Administration;
(f) Overseas Workers Welfare Administration;
(g) Bureau of immigration;
(h) National Bureau of investigation;
(i) National Statistics Office; and
(j) Commission on Filipinos Overseas
Section 72. Initially, the Inter-Agency Committee shall
make available to itself the information
contained in existing data bases/files. The
second phase shall involve the linkaging of
computer facilities in order to allow free-
flow data exchanges and sharing among
concerned agencies.
Section 73. Information and data acquired through this
shared information system shall be treated
as confidential and shall only be used for
lawful and official purposes, connected
to the usual functions of the member
agencies, and for purposes envisioned by
R.A. 8042.
Section 74. The Inter-Agency Committee shall convene
to identify existing data bases which shall be
declassified and shared only among member
agencies. These shared data bases shall
initially include, but not be limited to, the
following:
(a) Masterlists of Filipino migrant workers/

mail order brides/overseas Filipinos
classified according to occupation/job
category, civil status, by country/state of
destination including visa classification;
(b) Inventory of pending legal cases involving
Filipino migrant workers and other Filipino
nationals, including those serving prison
terms;
(c) Masterlist of departing/arriving Filipinos;
(d) Statistical profile on Filipino migrant
workers/overseas Filipinos/tourists;
(e) Blacklisted foreigners/undesirable aliens;
(f) Basic data on legal systems, immigration
policies, marriage laws and civil and
criminal codes in receiving countries
particularly those with large numbers of
Filipinos;
(g) List of labor and other human rights
instruments where receiving countries
are signatories;
(h) A tracking system of past and present
gender disaggregated cases involving
male and female migrant workers;
(i) Listing of overseas posts which may render
assistance to overseas Filipinos, in general,
and migrant workers, in particular.
(j) Listing of accredited recruiters and
recruitment agencies;
(k) Listing of accredited foreign employers;
and
(l) Listing of recruiters and recruitment

agencies with decided/pending criminal/
civil/administrative cases, and their
dispositions.
For purposes of declassifying information,
the inter-agency Committee shall establish
policies, guidelines and procedures.
Section 75. The Inter-Agency Committee shall submit
appropriate recommendations to the
President. It shall also provide information
and factual basis for the report to Congress
by the DFA and DOLE.
Section 76. Secretariat. A secretariat which shall provide
administrative and support services to the
inter-agency Committee shall be based in
the DFA.
Section 77. Funds. - There is hereby allocated the initial
amount of P1OM from the Philippine
Charity Sweepstakes Office to carry out the
provisions of this Rule. Thereafter, the actual
budget of the inter-agency Committee shall
be drawn from the General Appropriations
Act in accordance with Section 38 of R.A.
8042.
XIX. MIGRANT WORKERS DAY
Section 78. Commemoration. - The DOLE shall lead and

enlist the cooperation of other government
agencies in the commemoration of a Migrant
Workers Day on 7 June of every year.
XX. MISCELLANEOUS PROVISIONS
Section 79. Additional Members of the POEA and

OWWA Boards. - The POEA and OWWA
Boards shall have at least three (3) additional
members each to come from the women,
sea-based and land-based sectors, and to be
appointed by the President.
Section 80. Reports to Congress. - The DFA and DOLE shall
submit to Congress the required reports under
Section 33 of the Act on or before the last day
of the Quarter following the reporting period.
Section 81. Repealing Clause. - All Department Orders,
Circulars and implementing Rules and
Regulations inconsistent with these Omnibus
Rules and Regulations are hereby repeated
or amended accordingly.
Section 82. Effectivity. - The provisions of these Rules
and Regulations shall take effect fifteen days
(15) after publication in two (2) newspapers
of general circulation.
Done in the City of Manila, this 29th day of February

1996.
(Sgd.)
DOMINGO L. SIAZON, JR.
Secretary Department of Foreign Affairs
(Sgd.) JOSE S. BRILLANTES

Acting Secretary
Department of Labor and Employment

Compendium of Right To Food Laws in The Philippines - Vol. II - Part 2

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Food Accessibility Laws 01

National Food Coalition

Published by: National Food Coalition

Lay-out: Ramon T. Ayco, Sr.

Printed in the Philippines

Republic of the Philippines

Republic Act No. 6971 November 22, 1990

Be it enacted by the Senate and House of Representatives

Section 1. Short Title.- This Act shall be known as the

Section 3. Coverage.- This Act shall apply to all business

bonuses proportionate to increases in

c) In business enterprises without

Section 7. Benefits and Tax Incentives.-

or lockout: Provided, That the business

Section 9. Disputes and Grievances.- Whenever disputes,

less than two thousand pesos (P2,000.00) but

Approved:November 22, 1990

Pursuant to the authority granted to the Secretary

Section 1. Title. These Rules shall be known as the

Section 3. Definition of Terms. As used in these Rules:

management policies and/or to hire,

(s) Productivity Incentives Program refers

competent, trained and impartial person

Section 1. Coverage. The Rules shall apply to:

Section 1. Organization. A business enterprise and/

all rank-and-file employees who have

Section 1. Objectives and Scope. The productivity

Section 2. Components. The productivity incentives

1. Objective/s of training program

instructors, and certificates of

Partial Total Value of Output

Intermediate inputs = raw materials consumed,

(b) Factors in Determining Productivity

of bonuses. Said list shall be updated

Section 4. Ratification. The productivity incentives

Section 8. Technical Support in the Development of

Section 1. Productivity Bonuses. Productivity bonuses

incentives program; provided that said

Section 1. Rate of Deductions.

equivalent to fifty (50%)percent of

Section 39 of the National Internal

Section 1. Non-Diminution of Benefits. Nothing in these

program shall suspend the effectivity

Done in the City of Manila, Republic of the Philippines,

Republic Act No. 1161

AN ACT TO CREATE A SOCIAL SECURITY

Section 1. Short Title. This Act shall be known as the

Section 3. Social Security System

Philippines is hereby created. The SSS

3, P.D. No. 24, S-1972; Sec. 1, P.D. No.

selected only from civil service eligibles

and calculations concerning increases

(h) To require reports, compilations and

by the Commission and decided within

must be taken within fifteen days from

Section 6. Auditor and Counsel.

Section 8. Terms Defined. For the purposes of this Act,

self-employed professional shall be both

in section eighteen of this Act. (As

child under the age of twenty-one

any such agreement. (As amended by

(m) Average monthly salary credit The

(o) Semester A period of two consecutive