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A missed golden opportunity

President Ramon Magsaysay gifted us with a golden opportunity to have unemployment benefit as part of our social security program when he signed into law Republic Act 1161 or the Social Security Act of 1954. 

That law took effect immediately upon its approval on June 18, 1954 to provide “the people throughout the Philippines… protection against the hazards of unemployment, disability, sickness, old age and death.”

Unemployment benefit—listed first among the five original set of benefits—was initially a principal component of the new program. Its rules of payment—set in the early 1950s —were surprisingly comprehensive and remained comparable in form and substance with today’s contemporary programs.

For instance, a covered employee is awarded “an allowance equivalent to twenty per centum of his daily rate of compensation, plus five per centum thereof for every dependent if he has any, but in no case shall the total amount of such daily allowance exceed six pesos, or fifty per centum of his daily rate of compensation, whichever is the smaller amount, nor be paid for a period longer than 90 days in one calendar year.”

Its payment “shall be suspended if his continued unemployment is due to his failure, without good cause, to apply for available suitable work, or to avail himself of a reasonable opportunity for suitable work, or to accept suitable work when offered to him.”

The act even defined “suitable work” as “the usual employment of the covered employee, or other employment for which he is reasonably fitted” and required him to register at “a public employment office.”

Immediately after signing the law, President Magsaysay appointed Dr. Manuel Hizon, the Actuary then of the Government Service Insurance System, as acting administrator of the newly created Social Security System.

That day was clearly the first day SSS started to exist, albeit without yet a single member registered and a centavo of contribution collected.

Dr. Hizon recruited quickly 37 employees from the GSIS to serve as the initial workforce of the SSS. Soon, too, President Magsaysay appointed Health Secretary Paulino Garcia as chairman of the program’s governing board Social Security Commission and Labor Secretary Eleuterio Adevoso, Social Welfare Administrator Pacita Gonzales, and GSIS general manager Rodolfo Andal as its members.

No doubt, the appointment of these top-caliber cabinet members highlighted the important role that President Magsaysay wanted the new program to play —serve as his administration’s flagship project.

However, when the newly appointed SSC members met the following day for their first board meeting, they decided that the program would only commence on December 1 that year.

Employer groups and labor unions—as if they were a mob —used this intervening period to oppose the law’s implementation through a series of protest rallies and meetings with the president.

The very strong opposition was so unlike the way social security was welcomed by Americans in 1935, or when a similar scheme was introduced at the GSIS for public servants in 1937.

Employer groups bannered our unpreparedness to implement this “premature” social security program, warning that it would “frighten foreign capital away” and “adversely affect the flow of investment capital” to the country.

Faced with these strong oppositions, the SSC decided— with the president reluctantly concurring—to suspend the implementation of R.A. 1161, and waited for the passage of amendments to some of its provisions.

President Magsaysay would perish in a plane crash on March 17, 1957 and a very supportive Vice President Carlos P. Garcia would succeed him and pursue the passage of Republic Act 1792 on June 21, 1957.

The amended version may have satisfied most oppositionists but it also deleted unemployment benefit. We thus lost a golden opportunity to enjoy it, and maybe for good because 58 years after its deletion, never had it been seriously considered again.

It is obvious that our employers have consistently outmaneuvered their government and labor social partners in the development of social security, and would likely continue to succeed in preventing our private sector workers from enjoying unemployment benefit.

But the benefits that were not even contemplated in the 1954 and 1957 legislations—maternity, medical care and workmen’s compensation benefits—have become major branches of our country’s social security program.

Medical care was introduced in 1972. SSS initially administered it for private sector workers and GSIS for public sector employees. Now universal, the program is solely administered by PhilHealth and funded by member contributions and government subsidies.

Workmen’s compensation benefit was restructured in 1975 from contributions that employers alone funded. It continues to be administered by SSS for private sector workers and by GSIS for public sector employees.

Maternity benefit was added to the program of benefits in 1978 from contributions that are paid alone by employers.

Despite the deletion of unemployment benefit in Republic Act 1792, there is much to thank President Garcia for pushing through the law’s effectivity on Sept. 1, 1957—which was a Sunday—and for not heeding the 50 desperate labor leaders who called on him the day before to suspend again its effectivity.

Much is also owed to the first 607 firms and their 169,403 employees who had earlier wisely enrolled with SSS. Without them, the commencement of the social security program could have been a missed golden opportunity, too.

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