Sss 2021 Audited Fs

SOCIAL SECURITY SYSTEM
STATEMENTS OF FINANCIAL POSITION

December 31, 2021 and 2020
(In Philippine Peso)
2020
Note 2021
(As restated)
ASSETS
Current assets
Cash and cash equivalents 3 22,075,249,008 21,514,274,598
Financial assets 4.1 78,429,985,389 65,177,190,895
Receivables, net 5 67,661,138,887 81,090,413,914
Inventories 6 69,167,527 85,318,643
Non-current assets held for sale 7 188,660,672 167,063,160
Other current assets 8 5,702,265,741 4,684,312,210
174,126,467,224 172,718,573,420
Non-current assets
Financial assets 4.2 382,187,833,823 327,742,312,466
Receivables 5 57,069,783,288 59,821,985,630
Investment property 9 79,076,648,180 74,621,527,922
Property and equipment, net 10 8,740,850,841 6,315,447,464
Intangible assets 11 119,993,813 138,878,299
Right of use assets 12 736,532,439 812,536,732
Other non-current assets 13 344,023,935 318,180,461
528,275,666,319 469,770,868,974
TOTAL ASSETS 702,402,133,543 642,489,442,394
LIABILITIES AND EQUITY

Current liabilities
Financial liabilities 14 4,240,405,468 4,475,331,211
Lease payable 15 232,114,952 156,254,268
Inter-agency payables 16 203,764,400 188,515,012
Trust liabilities 17 1,089,073,312 1,201,667,210
Deferred credits/Unearned income 18 88,787,679 76,721,000
Other payables 21 757,360,817 882,539,662
6,611,506,628 6,981,028,363
Non-current liabilities
Financial liabilities 14 0 1,422,339
Lease payable 15 592,436,627 727,679,432
Deferred credits/Unearned income 18 302,210,840 329,061,510
Provisions 19 2,134,002,987 1,941,881,916
Insurance contract liability 20 7,629,580,348,453 6,757,220,290,677
Other payables 21 50,000,000 50,000,000
7,632,658,998,907 6,760,270,335,874
TOTAL LIABILITIES 7,639,270,505,535 6,767,251,364,237
EQUITY/(DEFICIT)
Reserve fund 22.1 (6,951,136,953,816) (6,106,279,980,864)
Revaluation surplus 22.2 6,572,652,754 4,046,242,799
Members' equity 22.3 16,863,603,589 1,281,698,533
Cumulative changes in fair value 22.4 (9,167,674,519) (23,809,882,311)
TOTAL EQUITY/(DEFICIT) (6,936,868,371,992) (6,124,761,921,843)
TOTAL LIABILITIES AND EQUITY 702,402,133,543 642,489,442,394
The Notes on pages 9 to 89 form part of these financial statements.
Certified true copy:
JEAN V. LAGRADA
Vice President
Financial and Budget Division
5
STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2021 and 2020
2020
Note 2021
(As restated)
INCOME
Service and business income 23 255,314,086,030 236,406,973,077
Gains 24 18,876,825,990 18,194,086,778
Other non-operating income 25 2,138,184,794 2,643,354,322
276,329,096,814 257,244,414,177
EXPENSES
Benefit payments 26 223,981,986,472 194,870,857,224
Change in policy reserves 27 872,359,500,057 461,748,116,997
Personnel services 28 7,727,034,576 6,768,825,122
Maintenance and other operating expenses 29 1,685,100,957 1,502,086,598
Financial expenses 30 214,094,554 218,744,669
Non-cash expenses 31 14,275,192,866 16,501,739,107
1,120,242,909,482 681,610,369,717
NET INCOME/(LOSS) (843,913,812,668) (424,365,955,540)
OTHER COMPREHENSIVE INCOME

Gain/(loss) on sale of FA at FVTOCI (204,050,992) 80,013,113
Changes in fair value of FA at FVTOCI 14,642,207,792 7,691,803,748
Revaluation surplus 2,526,409,955 0
16,964,566,755 7,771,816,861
TOTAL COMPREHENSIVE LOSS (826,949,245,913) (416,594,138,679)
JEAN V. LAGRADA
Vice President
6
STATEMENTS OF CHANGES IN EQUITY
Cumulative
Reserve fund Revaluation Members' Equity Changes in Fair TOTAL
(Note 22.1) Surplus (Note 22.3) Value
(Note 22.2) (Note 22.4)
BALANCE AT JANUARY 1, 2021 (6,106,279,980,864) 4,046,242,799 1,281,698,533 (23,809,882,311) (6,124,761,921,843)

Adjustments:
Benefit payment accrual (99,116,050) 0 0 0 (99,116,050)
Premium contribution accrual (291,212,013) 0 0 0 (291,212,013)
MIA valuation of policy reserves (1,418,613) 0 0 0 (1,418,613)
RESTATED BALANCE AT JANUARY 1, 2021 (6,106,671,727,540) 4,046,242,799 1,281,698,533 (23,809,882,311) (6,125,153,668,519)
CHANGES IN EQUITY FOR 2021
Add/(Deduct):
Members' contributions 0 0 15,628,512,456 0 15,628,512,456
Comprehensive income/(loss) for the year (844,117,863,660) 2,526,409,955 0 14,642,207,792 (826,949,245,913)
SSS' share in ECC & OSHC corporate operating budget (332,667,772) 0 0 0 (332,667,772)
Withdrawal/Management cost 0 0 (68,669,837) 0 (68,669,837)
Guaranteed income/Annual incentive benefit (14,694,844) 0 22,062,437 0 7,367,593
BALANCE AT DECEMBER 31, 2021 (6,951,136,953,816) 6,572,652,754 16,863,603,589 (9,167,674,519) (6,936,868,371,992)
BALANCE AT JANUARY 1, 2020 (5,681,272,001,318) 4,046,242,799 1,038,891,527 (31,501,686,059) (5,707,688,553,051)
CHANGES IN EQUITY FOR 2020

Add/(Deduct):
Members' contributions 0 0 271,421,251 0 271,421,251
Comprehensive income/(loss) for the year (424,285,942,427) 0 0 7,691,803,748 (416,594,138,679)
SSS' share in ECC & OSHC corporate operating budget (292,617,921) 0 0 0 (292,617,921)
Withdrawal/Management cost 0 0 (47,953,998) 0 (47,953,998)
Guaranteed income/Annual incentive benefit (551,806) 0 19,339,753 0 18,787,947
Adjustment on prepaid benefits payable (428,867,392) 0 0 0 (428,867,392)
RESTATED BALANCE AT DECEMBER 31, 2020 (6,106,279,980,864) 4,046,242,799 1,281,698,533 (23,809,882,311) (6,124,761,921,843)
JEAN V. LAGRADA
Vice President
7
STATEMENTS OF CASH FLOWS
Note 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Members' contribution 235,585,266,359 208,959,277,135

Investment and other income 14,833,670,926 22,549,725,256
Payments to members and beneficiaries, net (225,246,593,862) (197,872,788,741)
Payments for operations, net (9,543,417,322) (7,646,880,488)
Net cash provided by operating activities 15,628,926,101 25,989,333,162
CASH FLOWS FROM INVESTING ACTIVITIES
Loan releases and other investment purchases, net (30,058,314,548) (26,483,852,613)

Acquisition of property and equipment, net (247,759,096) (356,705,736)
Acquisition of intangible assets, net 11 (21,433,292) (541,000)
Net cash used in investing activities (30,327,506,936) (26,841,099,349)
CASH FLOWS FROM FINANCING ACTIVITIES
Corporate operating budget of:

Employees' Compensation Commission (176,068,900) (118,958,924)
Occupational Safety and Health Center (156,598,872) (173,658,997)
Flexi-fund equity:
Contribution 124,764,191 250,564,915
Withdrawal (65,801,457) (47,603,998)
Guaranteed income 8,904,319 18,839,674
Annual incentive benefit 0 (55,180)
PESO fund equity:
Contribution 18,683,518 20,856,336
Withdrawal (2,868,380) (350,000)
Guaranteed income 0 3,453
Annual incentive benefit (1,469,754) 0
Mandatory provident fund contribution 22.3 15,484,997,775 0
Net cash provided by/(used in) financing activities 15,234,542,440 (50,362,721)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 535,961,605 (902,128,908)

Effect of exchange rate changes on cash and cash equivalents 25,012,805 (789,604)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3 21,514,274,598 22,417,193,110
CASH AND CASH EQUIVALENTS AT END OF YEAR 22,075,249,008 21,514,274,598
JEAN V. LAGRADA
Vice President
8
NOTES TO FINANCIAL STATEMENTS
(Amounts in Philippine Peso)
1. GENERAL INFORMATION
The Social Security System (SSS) is an independent and accountable government-owned

and controlled corporation that administers social security protection to Filipino workers,
local and overseas and their beneficiaries. Social security provides replacement income for
workers in times of death, disability, sickness, maternity, old age, unemployment or
involuntary separation and other contingencies.
On September 1, 1957, Republic Act (RA) No. 1161 or the “Social Security Act of 1954” was
implemented. Thereafter, the coverage and benefits given by SSS have been expanded and
enhanced through the enactment of various laws. On May 1, 1997, RA No. 8282, otherwise
known as the “Social Security Act of 1997”, was enacted to further strengthen the SSS.
Under this Act, the government accepts general responsibility for the solvency of the SSS
and guarantees that prescribed benefits shall not be diminished. Section 16 of RA No. 1161,
as amended by RA No. 8282, exempts the SSS and all its benefit payments from all kinds of
taxes, fees or charges, customs or import duty.
On February 7, 2019, RA No. 11199 or the “Social Security Act of 2018”, was enacted to
rationalize and expand the powers and duties of the Social Security Commission (SSC) to
ensure the long-term viability of the Social Security System, repealing for the purpose RA
No. 1161, as amended by RA No. 8282, otherwise known as the Social Security Act of
1997. Among the landmark provisions of the RA No. 11199 are the grant of unemployment
or involuntary separation benefits for the first time in the country, the mandatory coverage of
Overseas Filipino Workers (OFWs), the establishment of a Provident Fund exclusive to SSS
members, the condonation of penalties on delinquent contributions, and the legislated
adjustments in membership premium and monthly salary credits. In pursuit of its policy, a
social security program shall be developed emphasizing the value of “work, save, invest and
prosper” for a more responsive SSS. The maximum profitability of investible funds and
resources of the program shall be ensured through a culture of excellence in management
grounded upon sound and efficient policies employing internationally recognized best
practices.
Pursuant to Sections 9 to 11 of RA No. 11199, coverage in the SSS shall be compulsory

upon all private employees including domestic workers not over 60 years of age and their
employers, self-employed persons, regardless of trade, business or occupation and sea-
based and land-based OFWs. 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, while
coverage of self-employed person shall take effect upon his registration with the SSS. Non-
working spouses of SSS members and Filipino permanent migrants, including Filipino
immigrants, permanent residents and naturalized citizens of their host countries may be
covered by the SSS on a voluntary basis. Likewise, SSS members separated from
employment including OFWs may continue to pay contributions on a voluntary basis to
maintain their rights to full benefits.
Under Section 26-B of RA No. 11199, the SSS as part of its investment operations, acts as
Certified true copy: insurer of all or part of its interest on SSS properties mortgaged to the SSS, or lives of
JEAN
JEANV. V.LAGRADA
LAGRADA 9
Vice
VicePresident
President
Financial and
Financial and Budget
BudgetDivision
Division
mortgagors whose properties are mortgaged to the SSS. For this purpose, a separate
account known as the “Mortgagors’ Insurance Account” was established wherein all
amounts received by the SSS in connection with the aforesaid insurance operations are
placed.
Under Section 4 of RA No. 11199, a Provident Fund for the members which will consist of
contributions of employers and employees, self-employed, OFW and voluntary members
shall be established based on (i) the SSS contribution rate in excess of 12 per cent, or (ii)
monthly salary credit in excess of P20,000.00 up to the prescribed maximum monthly salary
credit and their earnings, for the payment of benefits to such members or their beneficiaries
in addition to the benefits provided for under this Act. A member may contribute voluntarily
in excess of the prescribed SSS contribution rate and/or the maximum monthly salary credit,
subject to such rules and regulations as the SSC may promulgate. The rate of contributions
as well as the minimum and maximum monthly salary credits shall be in accordance with the
schedule defined under Section 4.a.9 of the law. The rate of penalty on unpaid loan
amortizations shall be determined and fixed by the SSC from time to time through rules and
regulations based on applicable actuarial studies, rate of benefits, inflation, and other
relevant socioeconomic data.
Under Section 4 of RA No. 8282, voluntary provident funds known as the Flexi-Fund and the
Personal Equity and Savings Option (PESO) Fund were established and approved in
September 2001 and June 2011, respectively. Membership to the Flexi-Fund is on a
voluntary basis for OFW members with at least P16,000 monthly earnings either covered
under the existing program or new entrant with the requirement of initial contributions to the
SSS program. The PESO Fund is offered exclusively to SSS members in addition to the
regular SSS Program. It aims to provide SSS members with the opportunity to receive
additional benefits in their capacity to contribute more. Each member of the PESO Fund
shall be allowed a maximum contribution of P500,000 per annum and a minimum of P1,000
per contribution. These two funds shall cease upon implementation of the new provident
fund provided under Section 4 of RA No. 11199.
The SSS also administers Employees’ Compensation and State Insurance Fund as
provided in Presidential Decree (PD) No. 626, as amended. The Employees’ Compensation
Commission (ECC), a government corporation, is attached to the Department of Labor and
Employment for policy coordination and guidance. It was created on November 1, 1974, by
virtue of PD No. 442 or the Labor Code of the Philippines. It, however, became fully
operational with the issuance of PD No. 626 which took effect on January 1, 1975.
The ECC is a quasi-judicial corporate entity created to implement the Employees’

Compensation Program (ECP). The ECP provides a package of benefits for public and
private sector employees and their dependents in the event of work-connected
contingencies such as sickness, injury, disability or death.
The State Insurance Fund (SIF) was established to provide funding support to the ECP. It is
generated from the employers’ contributions collected by both the Government Service
Insurance System (GSIS) and SSS from public and private sector employers, respectively.
Coverage in the SIF shall be compulsory upon all employers and their employees not over
60 years of age, provided, that an employee who is over 60 years of age and paying
contributions to qualify for the retirement of life insurance benefit administered by the
System shall be subject to compulsory coverage. On March 6, 2019, the ECC in its Board
10
Resolution No. 19-03-05 approved the policy on expanding the coverage of the ECP to the
self-employed compulsory members of the SSS.
The summary of the financial performance and result of operations of the funds as at
December 31, 2021, are as follows. All inter-fund accounts have been eliminated.
SSS* EC-SIF Total
Total Assets 657,486,431,459 44,915,702,084 702,402,133,543
Liabilities 7,600,981,378,159 38,289,127,376 7,639,270,505,535

Reserve Fund**/Equity (6,943,494,946,700) 6,626,574,708 (6,936,868,371,992)
Total Liabilities and Equity 657,486,431,459 44,915,702,084 702,402,133,543
**Includes Insurance Contract Liability (ICL)
SSS* EC-SIF Total

Income 271,851,724,926 4,477,371,888 276,329,096,814
Expenses 245,252,009,532 2,631,399,893 247,883,409,425
Net change in policy reserves 857,207,463,317 15,152,036,740 872,359,500,057
Total expenses 1,102,459,472,849 17,783,436,633 1,120,242,909,482
Profit/(Loss) (830,607,747,923) (13,306,064,745) (843,913,812,668)
Other comprehensive income
for the year 15,782,259,272 1,182,307,483 16,964,566,755
Total comprehensive income (814,825,488,651) (12,123,757,262) (826,949,245,913)
*SSS includes Flexi-Fund, PESO Fund, Mortgagors’ Insurance Account and Mandatory Provident Fund
The principal office of SSS is located at East Avenue, Diliman, Quezon City. It has 167 local
branches and 115 service and representative offices located in various cities and
municipalities of the country, and 28 foreign branch offices situated in Asia and Pacific,
Europe, Middle East and North America.
The accompanying financial statements as at and for the year ended December 31, 2021
(including the comparative financial statements as at for the year ended December 31,
2021) were approved and authorized under SSC Resolution No. 203-s.2022.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies that have been used in the preparation of these financial
statements are summarized below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
a. Statement of Compliance with Philippine Financial Reporting Standards

(PFRS) and Commission on Audit (COA) Circular No. 2017-004
The accompanying financial statements were prepared in accordance with

PFRS and Philippine Accounting Standards (PAS) issued by the Philippine
Financial Reporting Standards Council (PFRSC). PFRS are adopted by the
PFRSC from the pronouncements issued by the International Accounting
11
Standard Board and approved by the Philippine Board of Accountancy. As a
Commercial Public Sector Entity (CPSE), SSS is required to adopt the PFRS
as its applicable financial reporting framework pursuant to COA Circular No.
2015-003 dated April 16, 2015, as amended.
b. Presentation of Financial Statements
The financial statements are presented in accordance with PAS 1,

Presentation of Financial Statements. The System presents all items of
income and expenses in a single Statement of Comprehensive Income (SCI).
For this purpose, SSS adopts the guidelines laid down under COA Circular
No. 2017-004 dated December 13, 2017, on the preparation of financial
statements and other financial reports and implementation of PFRS by
government corporations classified as CPSE, unless Management believes
that a different classification and presentation of the accounts provides
information that is reliable and more relevant to users of the financial
statements.
c. Basis of Measurement
The financial statements have been prepared on a historical cost basis,

except for the following items:
• Financial assets at fair value through profit or loss (FVTPL) are measured
at fair value;
• Financial assets at fair value through other comprehensive income
(FVTOCI) are measured at fair value;
• Investment properties are measured at fair value;
• Non-current assets held for sale are measured at the lower of carrying
amount or fair value less cost to sell; and
• Land under property and equipment are measured at revalued amount.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value of a non-financial asset is measured to its
highest and best use. The fair value of financial and non-financial liabilities
takes into account non-performance risk, which is the risk that the entity will
not fulfill an obligation.
The SSS classifies its fair value measurements using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements.
The fair value hierarchy has the following levels:
• Level 1 – inputs are quoted prices (unadjusted) in active markets for

identical assets or liabilities that the entity can access at the
measurement date. FVTPL and FVTOCI investments fall under this level.
12
• Level 2 – inputs other than quoted market prices included within Level 1
that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices). This level includes the
majority of the over-the-counter derivative contracts.
• Level 3 – inputs for the asset or liability that are not based on observable
market data (unobservable inputs). This level includes investments and
debt instruments with significant unobservable components. This
hierarchy requires the use of observable market prices in its valuations
where possible. Investment properties and non-current assets held for
sale are within this level.
d. Accrual Accounting
In accordance with PAS 1, the financial statements, except for cash flow
information, have been prepared using the accrual basis of accounting.
e. Functional and Presentation Currency
The financial statements are presented in Philippine peso, which is the

System’s functional and presentation currency. All amounts are rounded to
the nearest peso, unless otherwise stated.
f. Estimates and Judgments
The preparation of the financial statements requires management to make

judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, revenue
and expenses. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustment to the
carrying amount of the affected asset or liability in the future.
Judgments, estimates, and assumptions are continually evaluated and are

based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
2.2 Adoption of New and Amended PFRS and Interpretations
a. Effective in 2021 that are relevant to the System
The accounting policies adopted are consistent with those of the previous
financial year, except for the adoption of the following new and amended
PFRS and Philippine Interpretations which the SSS adopted effective for
annual periods beginning on or after January 1, 2021:
• Amendments to PAS 37 – Provisions, contingent liabilities and contingent

assets specify which costs a company includes when assessing whether
a contract will be loss-making.
13
• Amendments to PFRS 9, Financial Instruments, PAS 39 Financial
Instrument. Recognition and Measurement and PFRS 7 Financial
Instruments Disclosures. PFRS 4, Insurance Contracts and PFRS 16,
Leases – Interest Rate Benchmark Reform-Phase 2. The amendments
relate to the modification of financial assets, financial liabilities and lease
liabilities, specific hedge accounting requirements and disclosure
requirements applying PFRS 7 to accompany the amendments regarding
modifications and hedge accounting.
• Amendments to PFRS 16, Leases – COVID-19 related rent concessions

extension of the practical expedient. On March 31, 2021, the IASB
published an additional amendment to extend the date of the practical
expedient from June 30, 2021 to June 30, 2022. Lessees can select to
account for such rent concessions in the same way as they would if they
were not lease modifications. In many cases, this will result in accounting
for the concessions as variable lease payments in the period(s) in which
the event or condition that triggers the reduced payment occurs.
b. New Accounting Standards, Interpretations and Amendments Effective

Subsequent to December 31, 2021
Issued but not yet effective are listed below. Unless otherwise stated, the
SSS does not expect that the future adoption of said pronouncements will
have a significant impact on its financial statements:
(i) Effective for annual period beginning on or after January 1, 2022
• Amendments to PFRS 3, Business Combinations update a reference

in PFRS 3 to the Conceptual Framework of Financial Reporting
without changing the accounting requirements for business
combinations.
• Amendments to PFRS 3, Reference to the Conceptual Framework.

The amendments update an outdated reference to the Conceptual
Framework in PFRS 3 without significantly changing the requirements
in the standard.
• Amendments to PAS 1, Presentation of Financial Statements, on

classification of liabilities – These narrow-scope amendments to PAS
1, Presentation of financial statements, clarify that liabilities are
classified as either current or non-current, depending on rights that
exist at the end of the reporting period. Classification is unaffected by
the expectations of the entity or events after the reporting date. The
amendment also clarifies what PAS 1 means when it refers to the
settlement of a liability.
• Amendments to PAS 16, Property, Plant and Equipment – Proceeds

before Intended Use. The amendments prohibit deducting from the
cost of an item of property, plant and equipment any proceeds from
selling items produced while bringing that asset to the location and
14
condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognizes the proceeds
from selling such items, and the cost of producing those items, in profit
or loss.
• Amendments to PAS 37, Onerous Contracts – Cost of Fulfilling a

Contract. The amendments specify that the cost of fulfilling a contract
comprises the costs that relate directly to the contract. Costs that
relate directly to a contract can either be incremental costs of fulfilling
that contract (examples would be direct labor, materials) or an
allocation of other costs that relate directly to fulfilling contracts (an
example would be the allocation of the depreciation charge for an item
of property, plant and equipment used in fulfilling the contract).
(ii) Annual Improvements PFRS Standards 2018-2020 (effective January 1,

2022)
• PFRS 1, First-time Adoption of PFRS – Subsidiary as a first-time

adopter. The amendment permits a subsidiary that applies paragraph
D16 (a) of PFRS 1 to measure cumulative transition differences using
the amounts reported by its parent, based on the parent’s date of
transition to PFRS.
• PFRS 9, Financial Instrument – Fees in the “10 per cent” test for
derecognition of financial liabilities. The amendment clarifies which
fees should be included in the “10 per cent” test for the derecognition
of a financial liability. An entity includes only fees paid to or received
between the entity (the borrower) and the lender, including fees
directly attributable to third-party fees.
• PFRS 16, Leases – Lease incentives. Any payments made to or on

behalf of a lessee within the context of the lease contract shall be
considered as an integral part of the net consideration of the lease and
therefore be accounted for as an incentive.
• Amendment to PFRS 16, Covid 19 Related Rent Concessions. The

amendment provides relief for leases in accounting for rent
concessions granted because of COVID 19. It therefore provides an
option to lessees from assessing whether a rent concession related to
COVID 19 is a lease modification or just a variable lease payment in
the period(s) in which the event or condition that triggers the reduced
payment occurs.
• Amendments to PFRS 7, Financial Instruments – Disclosures. It

requires entities to provide disclosures in the financial statements that
will enable users to evaluate the following:
o The significance of financial instruments for the entity’s financial

position and performance;
15
o The nature and extent of risks arising from financial instruments to
which the entity is exposed during the period and at the end of the
reporting period; and
o How the entity manages those risks.
(iii) Effective for annual period beginning on or after January 1, 2023

(globally); January 1, 2025 (local-Philippines)
• PFRS 17, Insurance Contracts – PFRS 17 is a comprehensive new

accounting standard for insurance contracts covering recognition and
measurement, presentation, and disclosure. Once effective, PFRS 17
will replace PFRS 4, Insurance Contracts, which currently permits a
wide variety of practices in accounting for insurance contracts. The
new standard applies to all types of insurance contracts (i.e., life, non-
life, direct insurance, and reinsurance), regardless of the type of
entities that issue them, as well as to certain guarantees and financial
instruments with discretionary participation features. A few exceptions
will apply.
The overall objective of PFRS 17 is to provide an accounting model for

insurance contracts that is more useful and consistent for insurers.
The code model of PFRS 17 is the general model, supplemented by
(a) a specific adaptation for contracts with direct participation features
(the variable fee approach) mainly for short-duration contracts. The
new standard requires insurance liabilities to be measured at a current
fulfillment value and provides a more uniform measurement and
presentation approach for all insurance contracts. These requirements
are designed to achieve the goal of a consistent, principle-based
accounting for insurance contracts.
• Amendments to PAS 1, Classification of Liabilities as Current or Non-

Current. The amendments aim to promote consistency in applying
requirements by helping companies determine whether, in the
statement of financial position, debt and other liabilities with an
uncertain settlement date should be classified as current (due or
potentially due to be settled within one year) or non-current.
• Amendments to PAS 1 and PFRS Practice Statement 2, Disclosure of

Accounting Policies. The amendments require that an entity discloses
its material accounting policies, instead of its significant accounting
policies. Further amendments explain how an entity can identify a
material accounting policy.
• Amendments to PAS 8, Definition of Accounting Estimates. The

amendments replace the definition of change in accounting estimates
with a definition of accounting estimates. Under the new definition,
accounting estimates are monetary amounts in financial statements
that are subject to measurement uncertainty. Entities develop
accounting estimates if accounting policies require items in financial
statements to be measured in a way that involves measurement
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uncertainty. The amendments clarify that a change in accounting
estimates that result from new information or new developments is not
the correction of error.
• Amendments to PAS 12, Deferred Tax related to Assets and Liabilities

arising from a Single Transaction. The amendments clarify that the
initial recognition exemption does not apply to transactions in which
equal amounts of deductible and taxable temporary differences arise
on initial recognition.
(iv) Effectivity deferred indefinitely
• PFRS 10 (Amendments), Consolidated Financial Statements and PAS

28 (Amendments), Investment in Associates and Joint Venture. The
amendments to PFRS 10 require full recognition in the investor’s
financial statements of gain or losses arising on the sale or
contribution of assets that constitute a business as defined in PFRS 3,
between an investor and its associate or joint venture. Corresponding
amendments have been made to PAS 28 to reflect these changes. In
addition, PAS 28 has been amended to clarify that when determining
whether assets that were sold or contributed to a business, an entity
shall consider whether the sale or contribution of those assets is part
of multiple arrangements that should be accounted for as a single
transaction.
2.2.1 Current versus non-current Classification
The SSS presents assets and liabilities in the statement of financial

position based on current/non-current classification. An asset is current
when it is:
• Expected to be realized or intended to be sold or consumed in the

normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realized within 12 months after the reporting period; or
• Cash and cash equivalents unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period.
All other assets are non-current.
A liability is current when:
• Expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;
• Due to be settled within 12 months after the reporting period.
• There is no unconditional right to defer the settlement of the liability for
12 months after the reporting period.
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All other liabilities are non-current.
Net deferred tax assets (liabilities) are classified as non-current.
2.3 Financial instruments
a. Financial assets
a.1 Date of recognition
The SSS initially recognizes loans and receivables and deposits on the date
that they are originated. All other financial assets are recognized initially on
the trade date at which the SSS becomes a party to the contractual
provisions of the instrument.
a.2 Initial recognition
The SSS initially recognizes a financial asset at fair value. Transaction costs
are included in the initial measurement, except for financial assets measured
at FVTPL.
a.3 Determination of fair value
The SSS determines fair value based on the nature of the financial assets
classified according to the intention of the management following the fair
value hierarchy of PFRS 13. This seeks to increase consistency and
comparability in fair value measurements and related disclosures. Based on
the hierarchy category which considers the inputs used in valuation
techniques into three levels. SSS financial assets fall under Levels 1 and 3
only.
a.4 Classification and subsequent measurement
The SSS classifies its financial assets as subsequently measured at FVTPL

or FVTOCI or at amortized cost based on the business model for managing
the financial assets and their contractual cash flow characteristics. The
business model determines whether cash flows will result from collecting the
contractual cash flows, selling the financial assets, or both.
• Financial assets at FVTPL
Financial assets at FVTPL consist of held-for-trading financial assets,

financial assets designated at FVTPL upon initial recognition, or financial
assets mandatorily required to be measured at fair value. Held-for-trading
financial assets are financial assets acquired or held for the purpose of
selling in the short term or for which there is a recent pattern of short-
term profit taking.
Upon initial recognition, attributable transaction costs are recognized in

profit or loss as incurred. Financial assets at FVTPL are measured at fair
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value as at reporting period and the corresponding unrealized gain or
losses on fair value changes are recognized in profit or loss.
SSS financial assets at FVTPL include investment in government

securities, equity securities, corporate bonds, externally managed fund
and investment in mutual fund.
• Financial assets at amortized cost
Financial assets are measured at amortized cost if both of the following

conditions are met: (1) the asset is held within the System’s business
model, the objective of which is to hold the assets in order to collect
contractual cash flows; and (2) the contractual terms of the instrument
give rise on specific dates to cash flows that are solely payments of
principals and interest (SPPI) on the principal amount outstanding.
After initial recognition, financial assets at amortized cost are

subsequently measured at amortized cost using the effective interest
method, less allowance for impairment, if any. Amortized cost is
calculated by taking into account any discount or premium on acquisition
that are an integral part of the effective interest rate.
Gains and losses are recognized in profit or loss when the financial
assets at amortized cost are derecognized or impaired, as well as
through the amortization process.
Loans and receivables are financial assets carried at cost or amortized

cost less impairment in value. Such assets are with fixed or determinable
payments that are not quoted in an active market.
Financial assets at amortized cost also include investments in

government bonds/notes, corporate bonds/notes and debenture bonds.
• Financial assets at FVTOCI
Financial assets are measured at FVTOCI if both of the following

conditions are met: (1) the asset is held within the business model, the
objective of which is achieved both by collecting contractual cash flows
and selling financial assets; and (2) the contractual terms of the
instrument give rise on specified dates to cash flows that are SPPI on the
principal amount outstanding. Subsequent to initial recognition, FVTOCI
financial assets are carried at fair value in the statement of financial
position. Changes in the fair value of such assets are recognized in other
comprehensive income and presented within reserves in the unrealized
gain or loss on FVTOCI financial assets portion. When equity instruments
measured at FVTOCI is derecognized, the cumulative gains or losses are
not recognized to profit or loss, instead, it will remain part of the
statement of comprehensive income. Dividends on FVTOCI equity
instruments are recognized in profit or loss when the right to receive
payments is established.
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SSS financial assets at FVTOCI consist of investments in equity
securities, government and corporate notes and bonds.
a.5 Impairment of financial assets
The SSC in its Resolution No. 41-s.2021 approved the policy/guidelines in

recognizing and measuring credit impairment. The SSS adopts the Expected
Credit Loss (ECL) in accordance with the provisions of PFRS 9 Financial
Instruments – Impairment.
The ECL Model is applied on credit exposures covered by PFRS 9, which

include the following:
1. Loans and receivables that are measured at amortized cost.

2. Investments in debt instruments that are measured at amortized cost.
3. Credit commitments and financial guarantee contracts that are not
measured at fair value through profit or loss.
SSS adopts the rebuttable presumption in PFRS 9 that a default does not
occur later than when a financial asset is 90 days past due.
Credit exposures are classified into three different stages at each reporting
date, based on the significance of the increase in credit risk since initial
recognition, as follows:
• Stage 1 – Performing – credit exposure that fall under this category are
those that are not yet amortizing, current and whose credit risk has not
appreciated significantly from initial recognition, i.e., credit exposures with
days-past-due (DPD) not more than 30 days.
• Stage 2 – Under-performing – credit exposures classified under this

category are those whose credit risk increased significantly since initial
recognition, i.e., past due credit exposures with DPD greater than 30 days
but less than or equal to 90 days.
• Stage 3 – Non-performing – credit exposures that have clear evidence of

impairment at the reporting date, i.e., past due credit exposures with DPD
greater than 90 days.
In assessing significant increases in credit risk, the risk of a default occurring

on the credit exposure at the reporting date is compared to the risk of a
default occurring on the credit exposure at the date of initial recognition.
As soon as the loan is granted to the member-borrower, it is classified under

Stage 1. For all credit exposure already in the books, the following rules shall
apply:
a. Exposures with significantly increased credit risk since initial recognition

shall be classified under Stage 2.
b. Non-performing exposures shall be classified under Stage 3.
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Transfer from Stage 1 to Stage 2 is made under the following conditions:
a. Exposures with missed payment for more than thirty (30) days
b. Exposures with risk ratings downgraded by at least two grades for rating
agencies with below 15 rating grades and three grades for rating
agencies with more than 15 rating grades
a. There is sufficient evidence to support full collection.

b. Full collection is probable when payments of principal and interest due
are received for at least six months.
c. Non-performing restructured exposures that have exhibited improvement
in credit worthiness of the counterparty after a total one-year probation
period, i.e.,
- Six (6) months in Stage 3 before transferring to Stage 2, and another
6 months in Stage 2 before transferring to Stage 1; or
- Directly from Stage 3 to Stage 1 without passing through Stage 2 after
12 months.
Restructured exposures classified as “performing” prior to restructuring shall

be initially classified under Stage 2. The transfer from Stage 2 to Stage 1
shall follow the six-month rule as mentioned in item “b” above.
The ECLs are revalued every year.
a.6 Derecognition of financial assets
Financial assets are derecognized when the rights to receive cash flows from
the asset have expired or have been transferred and the SSS either has
transferred substantially all risks and rewards of ownership or has neither
transferred nor retained substantially all the risks and rewards of ownership
but has transferred control of the asset.
b. Financial liabilities
Financial liabilities are initially measured at fair value, and when applicable,
adjusted for transaction costs unless the Fund designated a financial liability
at FVTPL.
The Fund’s financial liabilities include accounts payable, accrued operating

payable, accrued benefit payable, claims pay-out payable, and lease
liabilities which are subsequently measured at amortized cost.
Financial Liabilities are derecognized in the statement of financial position

only when the obligation is extinguished either through discharge,
cancellation or expiration. The difference between the carrying amount of the
financial liability derecognized and the consideration paid or payable is
recognized in profit or loss.
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2.4 Cash and cash equivalents
Cash comprises cash on hand and cash in bank. Cash equivalents are deposit on
call and highly liquid investments with original maturity of three months or less,
which are readily convertible to known amount of cash and are subject to an
insignificant risk of change in value.
2.5 Inventories
Supplies and materials inventories are valued at cost. Cost is determined using
the weighted average method. Inventories are recognized as an expense when
deployed for utilization or consumption in the ordinary course of operation of the
SSS.
Inventories include semi-expendable property, or those tangible items with cost

below the capitalization threshold for property and equipment (see Note 2.8).
These items are recognized as expense in full upon issuance to end users but are
recorded in the Report on the Physical Count of Inventories for monitoring
purposes.
2.6 Non-current assets held for sale
Non-current assets are classified as held for sale (NCAHFS) if their carrying
amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met when the sale is highly
probable, and the asset is available for immediate sale in its present condition.
Assets classified as held for sale are measured at the lower of carrying amount or
fair value less costs to sell. Any excess of carrying amount over fair value less
costs to sell is an impairment loss. No depreciation is recognized for these assets
while classified as held for sale.
NCAHFS includes real and other properties acquired (ROPA) in settlement of

contribution and member/housing/other loan delinquencies through foreclosure or
dation in payment. They are initially booked at the carrying amount of the
contribution/loan delinquency plus transaction costs incurred upon acquisition.
When the booked amount of ROPA exceeds the appraised value of the acquired
property, an allowance for impairment loss equivalent to the excess of the amount
booked over the appraised value is set up.
Upon in-depth assessment that properties classified as NCAHFS ceases to meet

the conditions set under PFRS 5, such assets will be reclassified to other asset
classification following the guidelines in the Classification, Reclassification and
Recording of SSS Real Estate Properties.
2.7 Investment property
Investment property account consists of land or building held to earn rentals

and/or for capital appreciation. This account also includes real properties that
were previously subject of mortgage loans, individual real estate loan, commercial
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and industrial loan which were foreclosed or acquired through Dacion en Pago,
cancelled or relinquished by former owners in favor of SSS due to non-payment.
An investment property is initially measured at cost, including transaction costs.

Such costs should not include start-up costs, abnormal waste, or initial operating
losses incurred before the investment property achieves the planned level of
occupancy. After initial recognition, it is measured at fair value with any change
therein recognized in profit or loss except for properties carried at cost due to
inability to determine the fair value reliably.
The fair values of investment properties are determined annually at the reporting
date by an independent professionally qualified valuer and internal appraiser
using the Market Data Approach, Cost Approach, and Income Approach. The
market value is estimated using gathered available local market conditions giving
considerations to the following: (a) extent, character and utility of the properties,
(b) comparable properties which have been sold recently, plus current asking
prices; (c) zoning and current land usage in the locality, and (d) highest and best
use of the property.
The generally accepted Market Data or Comparative Approach is used to

measure land under the investment property based on sales and listings of
comparable property registered within the vicinity. Comparisons are premised on
the factors of location, land use, physical characteristics of the land and time
element. For the value of the land with improvements, the appraisers use the
Cost Approach taking into account the current cost of reproduction, if new, of the
replaceable property in accordance with the prevailing market prices for materials,
labor, contractor’s overhead, and profit and fees. In arriving at the value of the
improvements, the modified quantity survey method is used by analyzing the
various construction elements of the property (foundations, columns and beams,
flooring walls, roof, etc.). In the Income Approach, the value of the property is
determined using the interest rates and yields as well as the records of rental
income and operating expenses. However, in some cases when there are no
comparable listings in the open market, the Value Opinion from other appraisers
or the BIR Zonal Valuation are used which are considered as Level 3 valuation.
Transfers to or from investment property are made when and only when, there is
a change in use, evidenced by: (a) commencement of owner-occupation; (b) end
of owner-occupation; (c) commencement of an operating lease to another party,
or (d) commencement of development with a view to sale.
2.8 Property and equipment
Property and equipment, except land, are stated at cost less accumulated
depreciation, amortization and any impairment in value. Land is carried at
revalued amount. Increase in value as a result of revaluation is recognized in OCI
and accumulated in Revaluation Surplus. However, if there is a decrease in the
value of asset due to revaluation, this shall be recognized in OCI to the extent of
recorded Revaluation Surplus in SCE, any excess shall be recognized in profit
and loss.
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Valuations are done by an external independent appraiser every three years or as
the need arises. The value of land is arrived at using the Market Data Approach.
In this approach, the value of the land is based on sales and listings of
comparable properties registered within the vicinity. This approach requires the
establishment of comparable properties by reducing reasonable comparative
sales and listings to a common denominator with the subject. This is done by
adjusting the differences between the value of the subject property and those
actual sales and listings regarded as comparable. Comparisons are premised on
the factors of location, land use, physical characteristics of the land, time element,
quality, and prospective use. On improvement and building, the Cost Approach is
adopted in arriving at the market value of the building. This approach considers
the cost to reproduce or replace in new conditions the assets appraised in
accordance with current prices for similar assets including costs of labor,
transport, installation, commissioning, and consultant’s fees. Adjustment is then
made for accrued depreciation which encompasses condition, utility, age, wear
and tear, functional and economic obsolescence.
Construction in progress (CIP) represents building and building/leasehold

improvements under construction and is stated at cost. CIP is not depreciated
until such time as the relevant assets are completed and put into operational use.
The initial cost of property and equipment consists of its purchase price, including
import duties and non-refundable purchase taxes, and any directly attributable
cost necessary in bringing the asset to its working condition and location for its
intended use. Cost also includes an initial estimate for dismantling and removing
the item or restoring the site on which it is located, the obligation for which an
entity incurs when the item is acquired. The capitalization threshold for an item to
be recognized as property and equipment is P15,000 while items whose amounts
are below the capitalization threshold are accounted as semi-expendable
properties (see Note 2.5).
The cost of replacing a part of an item of property and equipment is recognized in

the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the SSS, and its cost can be measured
reliably. The carrying amount of the replaced part is derecognized. An item of
property and equipment is derecognized when either it has been disposed of or
when it is permanently withdrawn from use and no future economic benefits are
expected from its use or disposal. Any gains or losses on the retirement and
disposal of an item of property and equipment are recognized in the SCI in the
period of retirement or disposal.
Expenditure incurred after the item has been put into operations, such as repairs
and maintenance, are normally recognized as expenses in the period such cost is
incurred.
Depreciation is calculated over the depreciable amount less its residual value. It is
recognized in profit or loss on a straight-line basis over the estimated useful life of
each part of an item of property and equipment.
Consistent with COA Circular No. 2017-004, the estimated useful life of property
and equipment are as follows:
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Assets Useful Life
Building and other structures 10-30 years
Furniture and equipment/computer hardware 5-10 years
Land improvements 10 years
Transportation equipment 7 years
Leasehold improvements 10-30 years or the term of
lease whichever is shorter
Property and equipment except land and construction in progress have residual
value equivalent to five per cent of the acquisition cost for assets recorded in
2021. The property and equipment acquired in prior years are presented at ten
per cent residual value. A system enhancement will be developed to compute the
correct depreciation expense recognized for the property and equipment acquired
in prior years using the five percent residual value.
Leasehold improvements are amortized over the shorter of the terms of the
covering leases or the estimated useful life of the improvements.
Fully depreciated assets are retained in the accounts until they are no longer in
use.
2.9 Right-of-use assets
The System recognizes the right-of-use (ROU) asset for the right to use the
underlying asset over the lease term. ROU asset is initially measured at costs,
which comprises the initial amount of lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct cost
incurred and an estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset on which it is located, less any lease incentives
received.
Right-of-use assets are amortized on a straight-line basis over the term of the
lease.
2.10 Intangible assets
Intangible assets are stated at cost less accumulated amortization and

impairment. They comprise software and licenses. Acquired computer
software/licenses are capitalized on the basis of the costs incurred to acquire and
bring to use the specific software. Computer software/licenses with finite lives are
amortized on a straight-line basis over their estimated useful life while those with
indefinite useful life or those used perpetually or for as long as there are
computers compatible with them are carried at cost and tested annually for
impairment or whenever there is an indication that the assets may be impaired.
Intangible assets are derecognized once the computer where it was installed is
disposed.
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2.11 Impairment of non-financial assets
The carrying amount of non-financial assets are assessed to determine whether

there is any indication of impairment, or an impairment previously recognized may
no longer exist or may have decreased. If any such indication exists or when
annual impairment testing is required, then the asset’s recoverable amount is
estimated. Recoverable amount is the higher of an asset's fair value less costs to
sell and its value in use.
Impairment loss is recognized if the carrying amount of an asset exceeds its

estimated recoverable amount. The carrying amount of the asset is reduced
through the use of an allowance account and the amount of loss is recognized in
profit or loss unless it relates to a revalued asset where the value changes are
recognized in other comprehensive income/loss and presented within reserves in
the property valuation reserve portion. Depreciation and amortization charge for
future periods is adjusted.
An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment
loss had been recognized in prior years.
2.12 Insurance contract liability
In CY 2020, SSS adopted PFRS 4 and recognized contingent liability for the
present value of future benefits and expenses, less the present value of future
contributions discounted at the appropriate risk-free discount. The change in
accounting treatment from PAS 37 – Provisions, Contingent Liabilities and
Contingent Assets is in compliance with the government’s directive of treating
government insurance institutions as self-sustaining insurance institutions.
Insurance contract liability (ICL) is a social benefit liability recognized in

compliance with DOF’s policy directive requiring government insurance institutions
(GIIs) falling under its supervision to adopt PFRS 4. It is computed based on six
per cent discount rate considering SSS’ past investment performance, which
considered the following: (a) past performance of SSS’ investment assets; (b)
collectability of its loan receivables; and (c) forward-looking view of the portfolio
performance or outlook on SSS’ investments and market conditions.
2.13 Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits
will flow to the SSS and the amount of revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is
recognized:
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a. Members’ contribution
Revenue is recognized from member contributions when it falls due or when

earned, not necessarily when collected or when cash is received with the
following criteria: (a) collectability is reasonably assured (e.g., the employer
can be reliably expected to pay the contribution; (b) sufficient documentation
exists; and (c) the contribution due is determinable.
The SSC under its Resolution No. 161-s.2021 dated April 8, 2020, approved
the Accounting Policy on Accrual of Revenues from Member Contributions
and Expenses for Member Benefits. The accrual of member contributions
procedural guidelines includes the following:
1. Employers shall be assessed for collectability.
a. In the initial phase (Phase 1), accrual shall be applied to large

accounts employers starting CY 2020. Phase 2 covering all active
employers will be implemented in CY 2022.
b. The employer must be paying for at least three years and with
continuous payment for the last six months which shall be recomputed
by semester.
c. Accrual shall stop if the employer has no payment for three

consecutive months prior to applicable month.
2. Contribution collection from active regular employers who pass the

collectability assessment shall be accrued every month using as basis
the electronic Collection System (e-CS) which automates the generation
of Payment Reference Number (PRN).
3. Analysis of the accrual report:
a. The generated PRN shall be recorded as receivable and revenue

based on the applicable month.
b. If the employer paid, the accrual entries will be reversed or will be

adjusted accordingly if with error.
c. If the employer did not pay or make advance payment for the
contributions due, different balance sheet entries are required
depending on when employer/member pays the amount due:
accounts receivable asset or unearned revenue liability.
d. Provision for impairment shall be recorded in accordance with

existing ECL policy.
Contributions from other employers that are not yet included in the accrual
process, self-employed and voluntary members' contribution shall be
recorded on a cash basis.
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Contributions from Flexi-Fund, PESO Fund and Mandatory Provident Fund
(MPF) members are directly credited to equity upon collection.
b. Interest and penalty income
Revenue is recognized as the interest and penalty accrues, taking into

account the effective yield on the asset and computed based on the following
approved policy:
▪ Accrual of interest and penalty earned on loans shall only be allowed if

the loans and other credit accommodations are current and performing.
▪ Loans are current and performing if any principal and/or interest are paid
for at least 90 days from the contractual due date.
▪ No accrual of interest and penalty is allowed if a loan has become non-

performing. Interest and penalty on non-performing loans shall be taken
up as income only when actual payments are received.
▪ Loans, investments, receivables, or any financial asset shall be

considered non-performing, even without any missed contractual
payments, when it is considered impaired under existing accounting
standards, classified as doubtful or loss, in litigation, and/or there is
evidence that full repayment of principal, interest and penalty is unlikely
without foreclosure of collateral, if any.
▪ All other loans, even if not considered impaired, shall be considered non-
performing if any principal and/or interest and/or penalty are unpaid for
more than 90 days from contractual due dates or accrued interest for
more than 90 days have been capitalized, refinanced, or delayed by
agreement.
c. Dividend income
Dividend income is recognized at the time the right to receive the payment is
established.
d. Rental income
Rental income is recognized on a straight-line basis over the lease term.
2.14 Expense recognition
Expenses are recognized in the statement of comprehensive income upon

utilization of the service or at the date they are incurred for operational and benefit
expenses.
The accrual of benefit expense is recognized when the transaction occurs or

when the expenses are incurred, not necessarily when they are paid or disbursed
with the following criteria being met: (a) there is an obligating event that creates a
legal or constructive obligation that results in an entity having no realistic
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alternative to settling that obligation; and (b) the amount of expense is
determinable or can be reliably estimated in the case of accrued expense.
The procedural guidelines for the accrual of benefit expenses include the
following:
1. Phase 1 - Retirement benefits and Phase 2 – Disability benefits, both for

pensions only
a. Benefit filed and encoded in the Benefit System but not yet settled (i.e.,
in-process claims) or incurred benefits but not yet paid (IBNP);
b. Benefits entitlements but not yet filed (i.e., compulsory retirement), or
incurred benefits but not yet reported (IBNR); and
c. Adjustments of the portion of initial pension benefits (i.e., advance 18
months) paid but applicable after the financial statement reporting period.
Phase 3 shall cover lumpsum and all other benefits, including monthly
pension for death. The program development will be in place before
December 2023 in time for the computation of the accrued benefits.
2. The Benefit Systems shall compute the amount of accrued benefits for set-up
of payables, including the generation of aging report.
3. The Benefit Administration Division (BenAD) and Information Technology

Management Group (ITMG) shall certify the generation of the following
reports:
a. Summary of Yearly Benefit Accruals per Type; and

b. Yearly Aging Report of Accrued Benefits.
4. Year-end reports shall be provided to the Branch Accounting Department in

January of the following year for proper recording.
2.15 Leases
a. SSS as lessee
At inception of the contract, the SSS has assessed that the contract contains
a lease that conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. The System assessed whether:
• The contract involves the use of an identified asset – which the asset is
physically distinct or represents substantially all the capacity of a
physically distinct asset;
• The System has the right to obtain substantially all of the economic
benefits from the use of the asset throughout the period of use; and
• The System has the right to direct the use of the asset and that it has the
decision-making rights that are most relevant to changing how and for
what purpose the asset is used.
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As a lessee, the SSS classified leases as an operating lease based on its
assessment of non-transferability of the risks and rewards of ownership. The
right-of-use asset is recognized for lease contracts that have a term of more
than twelve months at the commencement date of the lease.
The lease liability is initially measured at the present value of the lease
payments that are not yet paid at the commencement date, discounted using
applicable Bloomberg’s PHP BVAL rates. The BVAL rate used in 2021 is
based on the term specified in the contract.
In applying PFRS 16 for the first time, SSS has used the following practical
expedients permitted by the Standard:
• The use of applicable BVAL rate to a portfolio of leases depending on the

term on the lease of contract;
• Reliance on previous assessments on whether leases are onerous;
• The accounting for operating leases with a remaining lease term of less
than 12 months as at January 1, 2021 as short-term leases on a straight-
line basis;
• The exclusion of initial direct costs for the measurement of the right-of-
use asset at the date of initial application; and
• The use of hindsight in determining the lease term where the contract
contains options to extend or terminate the lease.
SSS has also elected not to reassess existing lease contracts at the date of
initial application. Instead, for contracts entered into before the transition
date, SSS relied on its assessment made applying PAS 17. Accrued rent
payable is also adjusted accordingly.
The SSS leases various offices nationwide. Rental contracts are typically
made for fixed periods of three to eight years but may have extension
options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions.
b. SSS as lessor
Leases, where the SSS does not transfer to the lessee substantially all the
risk and benefits of ownership of the asset, are classified as operating leases.
Lease income from operating leases is recognized as income on a straight-
line basis over the lease term.
In any case, SSS does not enter into a finance lease agreement.
2.16 Related party disclosures
PAS 24 ensures that an entity’s financial statements contain the disclosures

necessary to draw attention to the possibility that its financial position and profit or
loss may be affected by the existence of related parties and by transactions and
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outstanding balances with such parties. Related party transactions are transfer of
resources, services or obligations between SSS and its related parties, regardless
of whether a price is charged.
2.17 Provisions and contingencies
Provisions are measured at the best estimate (including risks and uncertainties) of
the expenditure required to settle the present obligation and reflects the present
value of expenditures required to settle obligation where the time value of money
is material.
A provision is recognized when, as a result of a past event, the SSS has a present
legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle that obligation.
However, it requires the approval of the SSC and the setup of a budget for the
actual expenditure required to settle the obligation.
ICL is the sum of the present value of future benefits and expenses, less the
present value of future contributions discounted at the appropriate risk-free
discount rate. Actuarial valuation methodology and assumptions are discussed in
Note 22.
2.18 Prepayments
Prepayments are the usual advances to suppliers and creditors including the cash
deposit to the Procurement Service of the Department of Budget and
Management (DBM). The advances to suppliers and creditors are expensed
monthly. Also included is the benefit expense for the first 18 monthly retirement
pension to members who opted to avail of the advance retirement benefits.
2.19 Income taxes
Based on Section 16, RA No. 11199, as amended, 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 import duty.
Thus, SSS is exempt from paying income taxes to the government.
2.20 Transactions in foreign currencies

Transactions in foreign currencies are initially recorded in Peso using the BSP
exchange rate at the date of transaction. Monetary assets and liabilities
denominated in foreign currencies are restated at the prevailing functional
currency rate at the reporting date. Exchange rate differences arising from the
restatement or settlement of monetary items are recognized in profit or loss in the
year in which they arise.
2.21 Events after the reporting date
Post year-end events that provide additional information about the System’s
financial position at the end of reporting date (adjusting events) are reflected in
31
the financial statements. Post year-end events that are not adjusting events are
disclosed in the notes to financial statements when material.
3. CASH AND CASH EQUIVALENTS
This account is composed of the following:
2021 2020
Cash on hand 796,322,123 1,086,399,922
Cash in bank 4,666,857,995 3,919,743,759
Cash equivalents 16,612,068,890 16,508,130,917
22,075,249,008 21,514,274,598
Cash in banks earn interest at the respective bank deposit rates. Time and special savings
deposits (TD/SSD) are made for varying periods of up to 90 days depending on the
immediate cash requirements of SSS and earn interest at the prevailing time and special
savings deposit rates.
Interest rates per annum range from 0.12 per cent to two per cent for time and special
savings deposits which is dependent on the tenor with overnight (one day) placement at the
minimum. Savings and current accounts interest rates are 0.001 per cent to 0.40 per cent
per annum.
In consideration of the banks’ making their deposit pick up facility available to the SSS, the
latter agreed to maintain an average daily balance of P1 million and P10 million with DBP
and LBP/UBP, respectively, in a non-drawing interest bearing current account/savings
account (CASA) with each of the banks’ servicing branches. As at December 31, 2021, the
amount of P374 million is being maintained in said banks for such purpose.
Interest income earned from cash in banks and term deposits amounted to P420.258 million
and P607.557 million as at December 31, 2021 and 2020, respectively (see Note 23).
4. FINANCIAL ASSETS
This account consists of the following:
4.1 Current Financial Assets
2021 2020
Financial assets – at FVTPL

Government securities 32,736,514,630 24,131,015,975
Equity securities 27,241,636,732 14,018,329,535
Externally managed fund 4,551,501,502 9,716,702,606
Investment in mutual fund 3,149,466,800 3,075,426,202
Corporate bonds 254,985,154 0
67,934,104,818 50,941,474,318
32
2021 2020
Financial assets – at amortized cost

Investment in bonds – local
Government bonds 5,113,223,347 4,247,307,625
Debenture bonds 400,000,000 0
Corporate bonds 2,665,790,000 8,996,720,000
Corporate notes 2,324,638,628 500,000,000
Government notes 0 510,000,000
10,503,651,975 14,254,027,625
Allowance for impairment loss (7,771,404) (18,311,048)
10,495,880,571 14,235,716,577
78,429,985,389 65,177,190,895
The fair value of financial assets through profit or loss are measured using active
quoted market prices, recurring and Level 1 based on the level of fair value hierarchy.
They are measured at fair value to properly reflect the changes and actual values of
the asset in the market.
Pursuant to Section 26-A of the RA No. 11199, the engagement of seven local fund
managers was approved by SSC under its Resolution No. 1035-A dated December
12, 2018 to manage portion of SSS Investment Reserve Fund with total original
deployed investment of P9 billion under the following mandates: pure equity fund
mandate; pure fixed income mandate and balanced fund mandate. As at December
31, 2021, the managed fund is reduced to P4.552 billion due to redemption of
investment from four local fund managers.
Mutual fund investment is an investment vehicle made up of a pool of money collected

from many investors for the purpose of investing in securities such as stocks, bonds,
money market instruments and other assets managed by professional fund managers.
Investment in domestic mutual fund was approved by SSC under Resolution Nos. 351
and 509 dated April 25 and June 20, 2018 respectively, with a P3 billion allotment. The
said amount is invested and distributed at P1 billion each to the three accredited
mutual fund companies, namely: Philequity Fund, Inc., Philippine Stock Index Fund
Corp. and Sun Life of Canada Prosperity Balanced Fund, Inc. As at December 31,
2021 and 2020, the value of invested funds amounted to P3.149 billion and P3.075
billion, respectively.
The costs of the financial assets at FVTPL are as follows:
2021 2020
64,336,684,171 51,957,070,186
33
4.2 Non-Current Financial Assets
2020
2021
As restated
Financial assets at amortized cost
Debenture bonds 2,813,170,775 3,213,170,775
Corporate bonds 19,084,974,765 17,830,937,354
Corporate notes 1,680,000,000 4,148,000,000
Government notes 510,000,000 0
239,437,388,429 193,425,289,634
Allowance for impairment – corporate
bonds and notes (32,312,253) (92,021,615)
239,405,076,176 193,333,268,019
Financial assets at FVTOCI
Corporate notes 1 1
Corporate bonds 508,065,035 523,852,555
142,782,757,647 134,409,044,447
382,187,833,823 327,742,312,466
The fair value of the FVTOCI financial asset is measured using active quoted market
prices, recurring and level 1 based on the level of fair value hierarchy. They are
measured at fair value to properly reflect the changes and actual values of the asset in
the market. Realized fair value gains/losses of equity securities are recognized in the
other comprehensive income. The cost of the financial assets as at December 31,
2021 and 2020 is P151.948 billion and P158.219 billion, respectively.
Notes and bonds earn interest at 1.25 to 18.25 per cent depending on the amount and
terms of the investment. Interest income earned from investments in notes and bonds
– local as at December 31, 2021 and restated 2020 is P11.543 billion and P13.601
billion, respectively (see Note 23).
5. RECEIVABLES – NET
2020
2021
As restated
Current
Loans and receivable 70,941,148,563 84,074,068,205
Lease receivable 290,208,363 183,534,338
Other receivables 1,656,587,010 330,677,012
72,887,943,936 84,588,279,555
Allowance for impairment (5,226,805,049) (3,497,865,641)
34
2020
2021
As restated
67,661,138,887 81,090,413,914
Non-Current
Other receivables 1,197,736,311 2,550,751,052
78,964,706,276 82,270,312,818
57,069,783,288 59,821,985,630
124,730,922,175 140,912,399,544
Loans and receivable account is composed of receivables from short-term member loans,
and housing loans due within twelve months. It also includes contribution and premium
receivable, interest, dividend, and sales contract receivables. The account receivable
collecting bank/agent is now presented under the Loans and receivable account from
previous classification under Other receivables per COA Circular No. 2021-005. These are
measured at amortized cost with provision of impairment loss pursuant to PFRS 9 and the
policy guidelines on the recognition of ECL.
The composition of the current and non-current portion is as follows:
2020
2021
As restated
Current
Loans receivable 63,280,761,778 67,459,910,980
Interest receivable 4,603,851,918 3,963,890,903
Contribution and premium receivable 1,959,701,040 11,325,257,363
Receivable collecting banks/agents (CB/CA) 820,740,439 667,306,566
Dividend receivable 275,625,079 657,238,087
Sales contract receivable 468,309 464,306
70,941,148,563 84,074,068,205
2020
2021
As restated
Non-Current
Sales contract receivable 1,211,762,935 1,232,324,560
Loan to other government corporation 9,566,230,283 9,686,181,975
Receivables collecting banks/collecting agents 333,395,452 316,447,220
77,751,189,984 79,703,537,953
35
Loans receivable is recognized at amortized cost and composed of the following:
2021 2020
Member loans 112,294,712,372 118,172,934,616
Housing loans 1,412,321,606 1,560,520,509
Pension loans 3,533,444,328 3,514,955,267
Commercial and industrial loans 69,509,283 69,509,283
Program member assistance for development
entrepreneurship (MADE) 17,219,220 17,219,220
117,327,206,809 123,335,138,895
107,023,175,812 114,495,403,763
The Loan Restructuring Program (LRP) which ended on April 1, 2019, has covered the
member-borrowers affected by previous calamities/disasters with past due calamity loans
and other short-term member loans. The total principal and accrued interest of all past due
short-term loans of the member-borrower were consolidated into one Restructured Loan
(RL1). Penalties were condoned after full payment of outstanding principal and interest of
RL1 within the approved term. However, if the balance of RL1 is not zeroed at the end of the
term, the unpaid principal of RL1 and the proportionate balance of condonable penalty
become part of a new principal under Restructured Loan 2 (RL2). The balance of the
restructured member loan as at December 31, 2021 amounted to P8.711 billion with
accumulated impairment provision of P794.941 million.
The Educational Assistance Loan Program which is part of Member loans amounted to
P5.256 billion consisting of the 50:50 SSS and NG (National Government) shares, has been
extended as loans to member beneficiaries as at December 31, 2021. The loans for degree
course shall be payable in five years to start 18 months for semestral courses, 15 months for
trimestral courses, or 14 months and 15 days for quarter-term courses from the scheduled
last release date or from the date of last release for those who will not avail of the
subsequent releases. For technical/vocational courses, the loan shall be payable in three
years to start 18 months for semestral courses from the scheduled last release date or from
the date of last release for those who will not avail of the subsequent release. Interest and
penalty on overdue amortization as at December 31, 2021 and 2020 are P43.325 million
and P68.580 million, respectively.
The Pension Loan Program (PLP) which was launched on September 3, 2018, aims to
provide financial aid to qualified SSS retiree pensioners by way of providing low-interest
loans. The program was approved by the SSC under Resolution No. 341 dated April 25,
2018 and its implementing guidelines were issued under Office Order No. 2018-033 dated
May 8, 2018. After 10 months of implementation, the SSC under its Resolution No. 429-
s.2019 dated July 5, 2019 approved the enhancement of the program in terms and
conditions of the PLP. Among the highlights of the enhancements are as follows: (1) the
maximum loan limit increased from P32,000 to P200,000; (2) the age of the retiree
pensioner at end of the month of loan term changed from 80 years of age or below to 85
years of age and below; and (3) longer loan repayment terms from 12 months to 24 months.
The monthly amortization of the pension loan shall be deducted from the monthly pension of
the pension loan borrower in which the first monthly amortization shall become due on the
second month after the loan was granted. Interest rate remains at 10 per cent per annum
until fully paid computed on a diminishing principal balance, which shall become part of the
36
monthly amortization. Loan releases for CY 2021 to 69,111 retiree pensioners amounted to
P3.088 billion and interest income recognized is P297.559 million.
Commercial and industrial loans are loan programs through conduit arrangement with the
accredited participating financial institutions (PFIs)/banks and covered by the Omnibus
Credit Line (OCL). The SSS made available the funds of the program to the PFIs which will
on-lend the fund to eligible borrowers/end-users. The programs are being implemented in
accordance with the guidelines, and terms and conditions in the PFIs OCL.
Program MADE are loans released/restructured between CYs 1991 to 1994 to cooperatives,
which was approved under SSC Resolution No. 502 on September 7, 1989 to encourage
the promotion of livelihood enterprises through community-based organizations to create
and sustain local employment opportunities.
Contribution and premium receivable represents accrued receivables due for the next month
which is the next calendar year following the policy approved by the SSC (see Note 2.12a).
However, for 2021, accruals were not effected due to non-separability of the MPF from the
SSS Contribution which requires IT enhancements. Due to the volume of transactions,
computation can only be done electronically.
The interest receivable account represents the accrued interest from various SSS
investments such as cash equivalents, notes and bonds, and loans and receivables which
are still uncollected as at reporting period. Likewise, the penalty receivable represents the
accrual of penalty income from various delinquent loans. These accounts are credited
whenever cash is collected, either monthly, quarterly, semi-annually or annually depending
on the interest/penalty payment dates of the investment.
As at December 31, 2021 and 2020, the accrued interests consist of the following:
2020
2021
As restated
Government notes and bonds 3,899,114,076 3,229,414,776
Member loans 363,515,098 451,773,038
Corporate notes and bonds 173,428,395 231,836,397
Debenture bonds 103,089,229 14,727,032
Receivable from PhilGuarantee 43,295,000 6,185,000
Cash equivalent and Short-term Money
Placement 7,759,974 18,644,603
Sales contract receivable 7,641,210 6,175,424
Housing loans 6,008,936 5,134,633
4,603,851,918 3,963,890,903
Allowance for impairment (34,031,405) (20,634,510)
4,569,820,513 3,943,256,393
Loans and receivables earn interest at their respective rates, as follows:
Interest Rate (Per Annum)

Loans receivable
Member loans 3.0 to 10.0
Housing loans 3.0 to 12.0
37
Pension loans 10.0
Commercial and industrial loans (CIL) 2.5 to 14.0
Loan to other government corporation – NHMFC 4.0
Sales contract receivable 6.0 to 9.0
Non-current interest receivable includes those originated from Home Guaranty Corporation
(HGC) guaranteed corporate notes and loan to National Home Mortgage Finance
Corporation (NHMFC) amounting to P6.162 million and P12.575 billion, respectively.
The SSC approved SSS’ participation and invested in various HGC (now Philippine
Guarantee Corporation or PGC) guaranteed Asset Participation Certificates (APC) from CY
1995 to CY 2000. However, the Asset Pools failed to service the regular interest due to the
APCs. In view of this, the SSS decided to call on the guaranty of HGC from November 2000
to July 2001. HGC was unable to pay in full guaranteed obligations and partially settled it
through the issuance of debenture bonds and transfer of 19 lots through Dacion en Pago.
From CY 2005 to CY 2013, correspondence and meetings were sent and conducted,
respectively between and among SSS, HGC and the Department of Finance (DOF). Upon
approval of the SSC under Resolution No. 899 dated November 27, 2013, SSS formally filed
with Office of the Government Corporate Counsel (OGCC) the Petition for Arbitration and
Adjudication versus HGC (Arbitration Case No. 2013-004). The amount subject of arbitration
was P5.24 billion covering principal, HGC-guaranteed interest, and compound interest.
Thereafter, negotiations continued between PGC and SSS until an agreement has been
reached with SSS condoning 4.972 per cent of the guaranteed interest resulting to a
settlement value of P4,813,170,775.22. The Memorandum of Agreement (MOA) was
executed on August 26, 2021 to settle all disputes and to put an end to the arbitration case.
Upon approval of the MOA by the Department of Justice (DOJ) on December 23, 2021,
PGC shall pay SSS with the following terms and conditions:
Cash Payment:
➢ Upon approval of the Department of Justice/Secretary of 1,100,000,000.00
Justice (DOJ/SOJ) of the MOA with fixed interest rate of 2.01%
p.a. from October 31, 2020 to actual payment date
Deferred Cash Payment
➢ Year 2 to 4 (P100 million per year) 300,000,000.00
➢ Year 5 200,000,000.00
With fixed interest rate of 3.0% p.a., payable semi-annually, to
be computed based on actual number of days
Effective October 31, 2020
PGC Debenture Bond – Backed by Sovereign Guaranty
➢ Year 1 to 4 redemption (P200 million per year) 800,000,000.00
➢ Year 5 (Balloon payment of balance) 2,413,170,775.22

Settlement value as of October 31, 2020 4,813,170,775.22
38
Receivables – CB/CA account represents premium contributions and loan payments
collected by accredited banks and agents but not yet remitted to SSS amounting to
P820.740 million and P667.307 million as at December 31, 2021 and 2020, respectively.
This account is debited upon receipt of collection/remittance data/reports that are
electronically transmitted by the CBs/CAs, which are uploaded by the SSS Data Center
Operations Department from different CBs/CAs servers and credited for the total
remittances appearing in the bank statements. The balances of the account were presented
net of negative balances totaling P572.152 million and P720.633 million as at December 31,
2021 and 2020, respectively, which are mostly prior years’ transactions due to unsubmitted
valid collection/remittance data/reports.
Dividend receivables are cash dividends earned but not yet received on shares of stocks
that are held as FA at FVTPL and FA at FVTOCI.
Sales contract receivables are contracts arising from deed of conditional sale executed by
the SSS with properties under NCAHFS to various buyers of the said properties.
Loan to other government corporation refers to loans to NHMFC as mandated under

Executive Order (EO) No. 90 to be the major government home mortgage institution whose
initial main function was to operate a viable home mortgage market, utilizing long-term funds
principally provided by the SSS, the GSIS, and Home Development Mutual Fund (HDMF), to
purchase mortgages originated by both the private and public institutions within the Unified
Home Loan Program (UHLP) guidelines. In accordance with the mandates of EO No. 90,
the SSC in its Resolution No. 509 dated August 4, 1988 approved the long-term loans to
NHMFC for low-income SSS members. Total loan releases from CY 1988 to CY 1995
amounted to P30.075 billion with total housing loan borrowers/beneficiaries of 135,229. In
CY 1996, a substantial number of UHLP Portfolio borrowers defaulted in the payment of
their loans to NHMFC, thereby causing NHMFC also to default in its payments to SSS. To
address the deterioration of NHMFC’s financial position, a Memorandum of Agreement
dated June 5, 1996 was executed by the parties. On December 17, 2003, the SSC under
Resolution No. 684 approved the restructuring of NHMFC’s total obligations of P40.515
billion broken down into: Principal (Low, Mod & High Del) – P27.940 billion, Accrued Interest
- P11.961 billion and Penalty – P0.614 billion. The interest and penalty were not capitalized
during the restructuring and are to be paid after full satisfaction of restructured principal
obligation per Restructuring Agreement.
As at December 31, 2021, the total outstanding obligation of NHMFC is P22.145 billion,
broken down as follows:
Principal 9,566,230,283
Interest 11,964,663,228
Penalty 614,104,940
22,144,998,451
The DOF in its letter dated October 19, 2020 informed SSS that P10 billion shall be
considered in the CYs 2022 to 2024 budget allocation for the Net Lending Program to
NHMFC in view of the tight fiscal space of the National Government for CY 2020 and CY
2021.
39
Lease receivable consists of operating lease receivables from contract of lease executed
with the lessees. It represents accrual of rental income from tenants of SSS which are
collectible within a year. Rent/lease income is derived from investment properties, ROPA
and operating assets, and recognized a total income of P1.205 billion and P1.137 billion as
at December 31, 2021 and 2020, respectively (see Note 33).
2021 2020
Current
Operating lease receivable 290,208,363 183,534,338
130,743,419 36,682,015
2021 2020
Non-Current
3 1
Other receivables consist of the following:
2020
2021
As restated
Current
Penalty receivable 265,472,682 247,600,218
Receivables – disallowances/charges 28,117,072 20,933,878
Insurance claims receivable 1,001,940 2,262,791
Due from officers and employees 623,001 592,984
Other receivables 61,372,315 59,287,141
356,587,010 330,677,012
329,483,167 319,440,280
2020
2021
As restated
Non-Current
Due from officers and employees 141,725,318 195,301,933
Others 2,356,010,993 2,355,449,119
2,497,736,311 2,550,751,052
2,037,097,456 2,090,088,067
Penalty receivable is broken down as follows:
2021 2020
Penalty Receivable
Member loans 264,753,864 245,330,149
Housing loans 32,722 635,239
40
2021 2020
Rental receivable 430,348 535,349
Sales contract receivable 255,748 1,099,481
265,472,682 247,600,218
238,368,839 236,363,486
Receivable – disallowances/charges are disallowances in audit due from SSS officials and
employees which have become final and executory.
Insurance claims receivables pertain to the amounts due from insurance companies for the
unpaid pension loan and housing loan balances due to death of pensioner-borrower and
member-borrower, respectively.
Other receivables consist of accounts such as:
2020
2021
As restated
Sale of financial assets 42,942,733 30,104,208
Supplier's creditable tax 14,210,973 25,896,955
Mutual fund management fee rebate 3,379,731 3,285,978
Others 838,878 0
61,372,315 59,287,141
Other Receivables arising from sale of financial assets pertain to equity securities which
have been sold, but remain unpaid as of reporting period.
The account Receivable-Supplier’s creditable tax is debited to recognize the amount of

creditable withholding taxes on year-end accrued expenses not yet deducted from the
payment to supplier but remittance to BIR in the following month will be advanced by SSS.
This account is credited upon payment to supplier.
Rebate on management fees from mutual fund companies represent refunds not yet
converted into additional shares as of reporting period.
Allowance for impairment on expected credit losses for current and non-current receivables
are measured depending on the credit exposures and credit risks. Loan accounts that are
current or only up to 30 days past due are classified in Stage 1. Those that are more than 30
days but less than 90 days past due are classified at Stage 2, while those that are already
past due for more than 90 days are classified at Stage 3.
2021 2020
Current
Contributions and premiums receivable 96,732,205 0
Interest receivable 34,031,405 20,634,510
5,226,805,049 3,497,865,641
41
2020
2021
As restated
Non-current
Loans receivable–other government corporation 3,187,284,803 3,329,164,616
Receivable – collecting bank/agent 127,078,618 129,471,100
21,894,922,988 22,448,327,188
Movements in Allowance for Impairment Loss of current and non-current receivables for CY
2021 are as follows:
Restated Balance, Additional Recovery/ Balance,

January 1 Provision Reversal December 31
Loans and receivable 25,311,416,977 2,189,263,171 (1,041,939,731) 26,458,740,417

Lease receivable 162,876,135 13,690,710 (1,321,923) 175,244,922
Other receivable 471,899,717 16,220,518 (377,537) 487,742,698
25,946,192,829 2,219,174,399 (1,043,639,191) 27,121,728,037
The impairment provisions as at December 31, 2021 and 2020 amounted to P2.219 billion
and P1.888 billion, respectively, and are recognized in the books using the guidelines in
recognizing and measuring credit impairment set forth in Note 2.3a.5 based on the approval
of the SSC in its Resolution No. 41-s.2021.
As part of the corporate social responsibilities of the System, the SSS supports the
government during the time of pandemic to assist the NG in its COVID-19 response and in
accelerating the recovery and bolster the resiliency of the Philippine economy. SSS
implemented the following moratorium on loan and lease payments in response to RA No.
11469 or Bayanihan to Heal as One Act (Bayanihan 1) and RA No. 11494 or Bayanihan to
Recover as One Act (Bayanihan 2):
1. SSC Resolution No. 205-s.2020 dated May 19, 2020 and 423-s.2020 dated
August 26, 2020 – Moratorium on Short-Term Loan Payments of SSS Members
Affected by the Corona Virus Disease 2019 (COVID-19) Situation
2. SSC Resolution No. 233-s.2020 dated May 19, 2020 - Moratorium and Extension
of Payment for Buyers of SSS Owned Real and Other Properties Acquired and
Housing Acquired Assets
3. SSC Resolution No. 234-s.2020 dated May 19, 2020 – Deferment of Rental
Payments of Lessees of SSS Investment Properties, Real and Other Properties
Acquired and Housing Acquired Assets
42
4. SSC Resolution No. 258-s.2020 dated May 19, 2020 – Moratorium on Housing
Loan Payments of SSS Members Affected by Corona Virus Disease 2019
(COVID-19) Situation
5. SSC Resolution No. 551-s.2020 dated October 21, 2020 – Moratorium on Short-
Term Loan Payments Under RA No. 11494 "Bayanihan to Recover as One Act”
(Bayanihan Act 2)
6. SSC Resolution No. 552-s.2020 dated October 21, 2020 – Moratorium on

Housing Loan Payments Under RA No. 11494 or "Bayanihan to Recover as One
Act”
7. SSC Resolution No. 609-s.2020 dated November 16, 2020 – Deferment of Rental
8. SSC Resolution No. 610-s.2020 dated November 16, 2020 – Moratorium and
Extension of Payment for Buyers of SSS Owned Real and Other Properties
9. SSC Resolution No. 456 s.2021 dated September 15, 2021 – SSS Housing Loan
Restructuring and Penalty Condonation under Program 4 of the Pandemic Relief
and Restructuring Program.
10. SSC Resolution No. 498 s.2021 dated September 29, 2021- Short-Term Member
Loan Penalty Condonation Program under Program 5 of the Pandemic Relief and
Restructuring Program.
The moratorium on loan repayments generally covered the repayment period of April to May
2020 (applicable period of March to April 2020) and November to December 2020
(applicable period of October to November 2020). The loan payment term is extended
based on the borrower’s number of month's moratorium. Loan repayment shall resume on
the month immediately after the borrower’s moratorium period. The accrued interest during
moratorium period shall be paid on the last month of loan payment term (short-term member
loans and housing loans) or equally divided and paid over the remaining installment
payment term of the buyer (sales contract receivables).
The moratorium on lease payments covered the payment period of April to May 2020 and
November to December 2020. The lease payment shall resume one month after lifting of
Enhanced Community Quarantine (ECQ) while accrued interest during moratorium shall be
equally amortized up to a maximum of six monthly installments which shall be added to the
regular rent due on the succeeding months.
The Pandemic Relief and Restructuring Program can be availed by member-borrowers with
past due loans for at least six months as of the day of condonation period for housing loans
and short-term member loans. The availment period for the condonation program is up to
three months commencing from November 2021 to February 2022.
43
6. INVENTORIES
2021 2020
Office supplies inventory 73,376,923 89,241,312
Accountable forms inventory 4,317,239 3,786,308
Drugs and medicines 949,348 842,224
Medical, dental and laboratory supplies inventory 1,196,536 2,121,318
79,840,046 95,991,162
69,167,527 85,318,643
Supplies and materials issued and recognized as expense during CYs 2021 and 2020
amounted to P54.746 million and P84.415 million, respectively (see Note 29).
The amount of allowance is the same for 2021 and 2020 because there was no write-down
of inventories that have become obsolete, details as follows:
2021 2020
Office Supplies Inventory 9,871,378 9,871,378
Accountable Forms Inventory 801,141 801,141
10,672,519 10,672,519
7. NON-CURRENT ASSETS HELD FOR SALE
Acquired assets/
Land Building Total
Registered
Net carrying amount, January 1, 2021 0 0 167,063,160 167,063,160
Transfer 0 0 31,074,670 31,074,670
Cancellation/adjustments 0 0 39,364,297 39,364,297
Disposals 0 0 (48,446,925) (48,446,925)
Impairment, net (loss)/recovery, 0 0 (394,530) (394,530)
Net carrying amount, December 31, 2021 0 0 188,660,672 188,660,672
Acquired assets/
Land Building Total
Registered
Net carrying amount, January 1, 2020 0 582,660 238,796,707 239,379,367
Transfer 0 (582,660) (26,109,608) (26,692,268)
Disposals 0 0 (76,603,603) (76,603,603)
Impairment, net (loss)/recovery, 0 0 644,362 644,362
The non-current asset held for sale is measured at the lower of carrying amount or fair value
less cost to sell. The fair value is measured based on the assessment of internal/external
expert, non-recurring and is level 2 and 3 based on the level of fair value hierarchy. As at
44
December 31, 2021, the impairment loss of P3.883 million and recoveries/reversals of
impairment of P3.489 million are recognized in profit or loss.
Had there been no impairment, the carrying amount of the NCAHFS – Acquired
assets/Registered is P192.660 million and P173.586 million as at December 31, 2021 and
2020, respectively.
As for the internally appraised properties classified as NCAHFS, the value of land was
established using the Market Data Approach. The initial value of the land is based on the
sales and listings of comparable properties. Adjustments were then applied to the gathered
value of land by comparing the physical and locational characteristics of the subject property
and the comparable properties.
The value of the improvements was arrived at using the Cost Approach. The current
reproduction cost of the improvement or structure is first established in accordance with the
prevailing market prices of construction materials, labor, contractors’ overhead, profits and
fees. Adjustments are then made to reflect depreciation resulting from physical deterioration
and obsolescence.
NCAHFS includes real and other properties acquired which are held for sale if its carrying
amount will be recovered principally through a sale transaction rather than through
continuing use. As at December 31, 2021, SSS has sold 117 properties through cash and
installment bases generating gain on sale of P75.416 million, which forms part of the P1.128
billion gains generated for CY 2021 (see Note 24).
NCAHFS properties that were unsold for more than one year with carrying value of P71.226
million were reclassified to Investment Property, while IP registered accounts with P102.300
million carrying value were consolidated and transferred to NCAHFS based on the
Guidelines on the Classification, Reclassification and Recording of SSS Real Estate
Properties approved by the SSC on June 10, 2020 under Resolution No. 292-s.2020. There
were no transfer or sale of NCAHFS to government and non-profit organizations. All
properties were sold to private individuals (see Note 9).
8. OTHER CURRENT ASSETS
This account is composed of the following prepayments:
2021 2020
Prepayments
Prepaid benefit expense 5,641,305,656 4,658,265,084
Advances to contractors/suppliers 3,000,000 11,500,000
Prepaid rent 6,029,722 8,314,948
Prepaid insurance 93,142 540,984
Other prepayments 51,837,221 5,691,194
5,702,265,741 4,684,312,210
Prepaid benefit expense refers to the first 18 monthly retirement pension in lump sum paid
to SSS members who opted to avail the advance retirement benefits. This was approved
45
per SSC Resolution No. 161.s-2021 (see Note 2.13) and retrospectively applied in the prior
year.
Advances to contractors/suppliers represents the P3.000 million cash deposit to

Procurement Service (PS)-Philippine Government Electronic Procurement System
(PhilGEPS) intended for the Government Fares Agreement (GFA). This is an initiative of the
DBM and the PS-PhilGEPS that will ensure fast, efficient, flexible and savings in time,
energy and money when processing the air transportation needs of all government officers
and personnel of their domestic trips.
Other prepayments consist of subscriptions to Microsoft Office 365 applications amounting

to P48.388 million and creditable withholding tax at source from rental or other services
deducted by other government agencies designated by BIR as authorized agent.
9. INVESTMENT PROPERTY
Land Building Total

Fair value, January 1, 2021 66,222,015,091 8,399,512,831 74,621,527,922
Transfer (31,074,670) 0 (31,074,670)
Additions 52,088,008 0 52,088,008
Disposal (91,429,465) 0 (91,429,465)
Fair value gain (loss) 4,263,520,130 262,016,255 4,525,536,385
Fair value, December 31, 2021 70,415,119,094 8,661,529,086 79,076,648,180
Land Building Total

Transfer (67,441,140) 0 (67,441,140)
Additions 202,844,073 582,661 203,426,734
Disposal (44,620,971) 0 (44,620,971)
Fair value gain (loss) 3,470,669,649 (565,641,347) 2,905,028,302
The costs of investment properties as at December 31, 2021 and 2020 are P13.445 billion
and P13.309 billion, respectively. There was an adjustment in the reported cost of
investment properties in CY 2020 due to the correction of the cost of leased building in
Pasay City from P2.635 billion to P1.997 billion. It was initially recognized based on the
available appraisal report pending receipt of cost of building from Lessee Corporation.
The increase in the cost of IP in 2021 was due to the additional IP-registered accounts
transferred from Housing Loan and IP-Acquired Asset transferred from NCAHFS. The
transfer of IP registered accounts with book value of P102.300 million were consolidated
and reclassified to NCAHFS, wherein the Transfer Certificates of Title (TCT) were already
transferred in the name of SSS, while NCAHFS amounting to P71.226 million which
remained unsold for more than one year were transferred to IP (see Note 7).
The fair value of investment property is determined based on the Cost and Market Approach
methods performed by independent appraisers and in-house appraisers, non-recurring and
is Level 2 and 3 based on the level of fair value hierarchy. Market values were based on the
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evidence of reliable transactions like recent land sales and sales offerings of comparable
properties within the vicinity and the application of land capitalization rate. Data gathered
from interviews with brokers and other real estate practitioners who are knowledgeable
about the property market were also used as bases. Adjustment factors were likewise
considered such as the date of appraisal, size, location, corner/road influence, and
conditions of sale.
The SSS Policy in the Classification, Reclassification and Recording of Real Estate
Properties identifies the following guidelines when properties are transferred to investment
property:
• NCAHFS remained unsold for more than one year

• PPEs which are no longer used for operational purposes
• Mortgage properties that have been registered in the name of SSS
On the other hand, investment property is transferred to NCAHFS or PPE:
• Upon consolidation of the registered property (Transfer Certificate of Title (TCT) in

the name of SSS) ready for sale
• Upon approval from approving authority to utilize the property for SSS operational
use.
The following amounts are recognized in the Statement of Comprehensive Income:
2021 2020
Net gain on fair value adjustment 4,527,743,785 2,905,028,302
Rental income 1,183,610,613 1,111,175,653
Penalty on rentals 4,148,619 2,550,257
Gain/loss on sale/disposal 18,619,683 6,932,900
Investment expenses (34,734,246) (52,753,429)
Impairment loss – rental and penalty receivable (12,989,350) (82,641,770)
5,686,399,104 3,890,291,913
As at December 31, 2021, there were 109 investment properties sold which generated a net
gain of P18.620 million.
The impairment loss – rental and penalty receivable decreased from P82.642 million in 2020
to P12.989 million in 2021 primarily due to the reclassification of rental NCAHFS to Rental IP
in 2020. Provision for impairment of the reclassified asset was already provided in 2020,
thus minimal impairment loss is recorded in 2021.
Part of the direct operating expenses incurred were for the investment properties generating
revenue through lease as at December 31, 2021 and 2020 amounting to P25.843 million
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10. PROPERTY AND EQUIPMENT – NET
Furniture and
equipment,
Buildings
transportation
Land and building/ Construction
Land equipment, Total
Improvement leasehold in progress
computer
improvements
hardware and
others
Cost
January 1, 2021 4,543,368,645 19,340,319 1,474,744,980 3,715,142,715 61,744,594 9,814,341,253
Additions 0 0 0 247,978,175 0 247,978,175
Transfers 0 1,373,913 0 0 (1,373,913) 0
Net revaluation increase 2,526,409,955 0 0 0 0 2,526,409,955
Retirement/cancellations/
disposal/adjustments 0 0 (15,935,924) (215,558,386) 0 (231,494,310)
Balance, December 31, 2021 7,069,778,600 20,714,232 1,458,809,056 3,747,562,504 60,370,681 12,357,235,073
Accumulated depreciation
January 1, 2021 0 12,745,085 897,745,495 2,478,332,040 0 3,388,822,620
Depreciation Expense 0 1,208,507 31,275,165 317,570,713 0 350,054,385
disposal/adjustments 0 (14,927,476) (197,311,766) 0 (212,239,242)
Balance, December 31, 2021 13,953,592 914,093,184 2,598,590,987 0 3,526,637,763
Accumulated impairment loss
January 1, 2021 0 1,137,050 108,934,119 0 0 110,071,169
Impairment loss/(recovery) 0 (791,206) (19,533,494) 0 0 (20,324,700)
Accumulated impairment loss,
December 31, 2021 0 345,844 89,400,625 0 0 89,746,469
Carrying amount, December 31, 2021 7,069,778,600 6,414,796 455,315,247 1,148,971,517 60,370,681 8,740,850,841
Furniture and
equipment,
Buildings
transportation
computer
improvements
hardware and
others
Cost
January 1, 2020 4,543,368,645 19,340,319 1,511,736,808 3,519,858,077 58,260,148 9,652,563,997
Additions 0 355,854,418 12,808,539 368,662,957
Transfers 0 0 9,254,546 0 (9,254,546) 0
disposal/adjustments 0 0 (46,246,374) (160,569,780) (69,547) (206,885,701)
January 1, 2020 0 11,691,205 911,782,262 2,395,600,560 0 3,319,074,027

Balance, December 31, 2020 0 12,745,085 897,745,495 2,478,332,040 0 3,388,822,620
December 31, 2020 0 1,137,050 108,934,119 0 0 110,071,169
Carrying amount,
December 31, 2020 4,543,368,645 5,458,184 468,065,366 1,236,810,675 61,744,594 6,315,447,464
Among the Property and Equipment, only land is subject to revaluation. Revaluation was
performed by an independent appraiser as at December 31, 2021. Any increase in the
value of the land as a result of revaluation is recorded under other comprehensive income
and property revaluation reserves under equity, while a decrease is recognized in profit or
loss to the extent that it exceeds any amount previously credited to property valuation
reserve. The balance of the property revaluation reserves as at December 31, 2021 and
2020 is P6.573 billion and P4.046 billion, respectively, and is not subject to any
appropriations as at end of the reporting period.
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If land were stated on the historical cost basis, its carrying amount as at December 31, 2021
and 2020 is P534.062 million.
Rental income from a portion of five property and equipment under a cancellable lease
agreement as at December 31, 2021 and December 31, 2020, which amounted to P7.776
million and P9.514 million, respectively, were included in the Statement of Comprehensive
Income. The portion under lease cannot be sold separately and is insignificant, thus,
remains as Property and Equipment.
As at December 31, 2021 and 2020, the total carrying amount of fully depreciated property
and equipment that are still in use are P96.605 million and P92.102 million, respectively.
11. INTANGIBLE ASSETS – NET
2021 2020
Cost
Balances at beginning of year 774,589,060 791,568,029
Additions 21,433,293 541,000
Retirement/disposals/cancellation (414,076) (17,519,969)
Balances at end of year 795,608,277 774,589,060
Accumulated amortization
Balance at beginning of year 585,814,761 546,045,214
Amortization charge for the period 40,317,779 45,454,897

Retirement/disposals/cancellation 0 0
Net book value at end of year 119,993,813 138,878,299
Intangible assets with definite and indefinite life include both computer software and
licenses. The carrying amount of intangible assets with indefinite life as at December 31,
2021 and 2020 is P60.699 million. All intangibles with definite life are amortized either over
a period of five years or with 20 per cent annual amortization rate. As at December 31, 2021
and 2020, the total cost amount of fully amortized intangible assets that are still in use are
P608.105 million and P481.518 million, respectively.
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12. RIGHT-OF-USE ASSETS
2021 2020
Cost
Balances at beginning of year 1,274,408,489 1,130,362,431
Additions 194,445,097 149,950,447
Retirement/cancellations/ disposal/adjustments (84,972,072) (5,904,389)
Balances at end of year 1,383,881,514 1,274,408,489
Depreciation Expense 264,612,273 245,041,597
Carrying amount at end of year 736,532,439 812,536,732
The SSS recognizes the ROU Assets for the right to use the underlying leased assets. ROU
assets are depreciated each year on a straight-line basis over the term of the lease (see
Note 15).
13. OTHER NON-CURRENT ASSETS
2021 2020
Deposits 99,462,696 97,766,937
Other assets 316,437,275 292,791,091
415,899,971 390,558,028
Allowance for impairment – other assets (71,876,036) (72,377,567)
344,023,935 318,180,461
Deposits account is recognized for the amount of deposits for telephone lines, water
connection services, meter deposits, and office rental deposits.
Other assets account consists of fire insurance premium (FIP) and mortgage redemption
insurance (MRI) advanced by SSS for properties mortgaged to the SSS. The decrease in
the allowance for impairment is due to full payment of housing loan accounts.
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14. FINANCIAL LIABILITIES
2020
2021
As restated
Current financial liabilities
Accounts payable 1,307,017,190 1,799,398,466
Accrued operating expenses 2,479,334,937 1,759,689,684
Accrued benefit payable 450,844,145 912,533,570
Claims pay-out payable 3,209,196 3,709,491
4,240,405,468 4,475,331,211
Non-current financial liabilities
Operating lease payable 0 1,422,339
4,240,405,468 4,476,753,550
Accounts payable and accrued operating expenses comprise of SSS’ obligations payable to
members, suppliers, employees and officials and loan overpayments for refund to member-
borrowers.
Accrued benefit payable represents the SSS obligation to members for retirement pension
benefit claims which is recognized using accrual basis of accounting. This includes the
accrual of benefit expenses for retirement and disability pension benefits based on the
policy approved under SSC Resolution No. 161-s.2021 dated April 8, 2021.
Claims pay-out payable pertains to unpaid insurance claims of policyholders composed of

Premium Liability, Fire/earthquake claims IBNP and incurred but not yet reported (see Note
27).
15. LEASE PAYABLE
This account represents the lease liability for the right to use the underlying lease asset up to
the end of the lease contract in accordance with PFRS 16, details follow:
2021 2020
Beginning Balance, January 1 883,933,700 960,672,692
Setup/Additions 194,445,097 149,950,447
Lease payments (242,863,342) (221,093,466)
Retirement/Cancellation/Adjustments (10,963,876) (5,595,973)
Ending balance, December 31 824,551,579 883,933,700
Current lease liabilities 232,114,952 156,254,268
Non-current lease liabilities 592,436,627 727,679,432
The associated right-of-use assets are measured at the amount equal to the lease liability at
initial set-up, adjusted by the amount of any prepaid or accrued lease payments relating to
the lease recognized. There were no onerous lease contracts that would have required an
adjustment to the right-of-use assets at the date of initial application.
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ROU Assets 2021 2020
Beginning balance, January 1 812,536,732 910,884,170
Set-up/Additions 194,445,097 149,950,447
Depreciation (264,612,273) (245,041,597)
Net carrying amount, December 31 736,532,439 812,536,732
SSS as a lessee maintains 138 lease contracts with variable terms ranging from more than
one year to 10 years that are recognized as assets and liability, while two contracts with
terms of less than one year are recognized as operating lease.
RA No. 11469 or Bayanihan 1 and RA No. 11494 or Bayanihan 2 were enacted granting the
President of the Philippines additional authority to combat the COVID-19 pandemic.
Recognizing that jobs and operations are disrupted as a consequence of the community
quarantine, one of the economic reliefs provided is the concession of residential and
commercial rental fees. SSS as a lessee was given rent reprieves and discounts by the
lessors of Angeles and Lemery Branch Offices. Angeles Branch Office’s lessor granted
SSS free rent from March 17 to May 17, 2020, while Lemery Branch Office’s lessor granted
free rent from March 16 to April 30, 2021, 75 per cent discount in May 2020 and 50 per cent
discount from June to August 2020. No more discounts were given in CY 2021.
16. INTER-AGENCY PAYABLES
2021 2020
Due to BIR 83,442,363 102,811,404
Due to GSIS 98,370,770 64,895,851
Due to PhilHealth 8,949,775 11,124,275
Due to Pag-IBIG 9,139,913 9,600,302
Due to SSS 3,861,510 83,180
Due to LGU 69 0
203,764,400 188,515,012
This account includes withholding taxes, contributions to GSIS, Philippine Health Insurance
Corporation (PHIC), HDMF and loan amortization due to SSS which were deducted from the
payroll of SSS employees.
Due to BIR includes among others, value-added tax (VAT) payable, other taxes withheld for
remittance and over remittance in CY 2021 for offsetting in the January 2022 remittance.
The VAT exemption of SSS was repealed by Section 86 of RA No. 10963, also known as
the Tax Reform for Acceleration and Inclusion (TRAIN) effective January 1, 2018.
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17. TRUST LIABILITIES
2021 2020
Trust liabilities 596,949,682 712,530,850
Guaranty/security deposits payable 243,238,506 242,842,670
Customers’ deposits payable 248,885,124 246,293,690
1,089,073,312 1,201,667,210
Trust liabilities consist of the following:
2021 2020
Funds held in trust
Officials and employees 538,050,990 469,675,201
Borrowers and other payors 39,373,849 23,878,611
Suppliers and creditors 2,550,433 3,092,090
Small business wage subsidy (SBWS) related 566,897 199,124,435
Flexi-fund 11,793,332 10,323,877
SSS provident fund and medical insurance 3,877,332 5,699,787
Dividends – stock investment loan program 649,767 649,767
Educational loan fund – DECS 87,082 87,082
596,949,682 712,530,850
Funds held in trust (FHT) from officials and employees include amounts deducted from
employees’ payroll other than mandatory deductions such as provident fund contributions,
loan amortization repayments, association dues, etc. and are remitted the following month to
private entities. It also includes among others the amounts deducted from their
separation/retirement claims for the benefits received but subsequently disallowed in audit
which as at December 31, 2021 and 2020, amounted to P507.830 million and P435.647
million, respectively. This is done to ensure collection once the pending appeal in court or
with the Commission on Audit (COA) will result in an unfavorable decision and
disallowances become final and executory. However, in the event that the Supreme Court or
COA decision is in favor of SSS and its employees, the amount withheld from these retired
employees will be returned in full. The total amount of P25.050 million have been returned to
retired/separated employees from NCR branches in view of the final decision of the
Supreme Court En Banc under G.R. No. 243278 promulgated on November 3, 2020 and
received by SSS on May 7, 2021 for the Notice of Disallowance (ND) No. 2012-07 dated
June 13, 2012.
FHT from borrowers and other payors are rental deposits received from tenants, and surety
bonds from collecting agents and are refunded after expiration of the contract.
FHT from suppliers and creditors are payments of liquidated damages from suppliers and
contractors with protest and sale of bid deposits to bidders. Amounts are utilized or refunded
to suppliers if the protest is reconsidered and approved. Collections on sale of bid deposits
are utilized for payment of expenses of the Bids and Awards Committee (BAC) such as the
payment of honoraria to BAC members. Unutilized amounts are recorded as miscellaneous
income.
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SSS provident fund and medical insurance represents the SSS’ share in the premium
contribution and medical insurance of employees and officials and foreign representatives,
respectively.
The SBWS fund represents a joint program of the DOF, SSS and BIR. The SBWS aims to
provide a monthly wage subsidy of P5,000 to P8,000 each for two months to around 3.4
million eligible employees of small businesses affected by the economic standstill after
separate quarantine measures were imposed nationwide in March 2020 to stop the further
spread of the COVID-19, with DBM approved budget of P51 billion. A total of 3,101,685
members became beneficiaries of the SBWS program. As at December 31, 2021, unutilized
funds amounting P5.666 billion including interest earned were returned to the Bureau of
Treasury.
Guaranty/security deposits payable are composed of bidder’s deposits, performance or cash

bonds and retention money from collecting agents and/or winning bidders in the
procurement of goods and services, infrastructure and consultancy services.
Customers’ deposits payable are rental deposits made by tenants leasing SSS properties.
18. DEFERRED CREDITS/UNEARNED INCOME
2021 2020
Current
Deferred credits – Output tax 799,975 0
Unearned rental income 87,987,704 76,721,000
88,787,679 76,721,000
Non-current
Unearned income – Unrealized gain-bond 302,210,840 329,061,510
390,998,519 405,782,510
The output tax is the VAT of SSS for its properties under lease while unearned rental
income represents advance rental payments from tenants of SSS properties.
The non-current unearned income represents profit recognized from SSS participation in the
Republic of the Philippines Domestic Debt Consolidation Program (Bond Exchange) 2011
and 2014, and Liability Management Program (Bond Exchange) 2015 amortized over the
term of the new Benchmark Bonds.
19. PROVISIONS
2021 2020
Pension benefits payable 759,077,316 478,496,400
Leave benefits payable 1,123,994,445 1,169,992,326
54
2021 2020
Retirement gratuity payable 28,691,057 28,691,057
Other provisions 222,240,169 264,702,133
2,134,002,987 1,941,881,916
Pension benefits payable represent the accrual of compulsory retirement benefit pension
already entitled but not yet filed or IBNR based on the policy guidelines set forth in Note
2.13.
Leave benefits payable represents the cash value of the accumulated vacation and sick
leave credits of employees, 50 per cent of which can be monetized once a year and the
balance payable upon resignation/retirement. As at December 31, 2021, there were 2,681
employees who availed of the monetization of leave credits with a total amount of P128.576
million.
Retirement gratuity payable is available to qualified employees under any one of RA No.
1616, RA No. 660 and RA No. 8291. Under RA No. 1616, SSS, as the last employer of the
qualified employees, pays the gratuity benefit of those who opt to retire under the said law.
Benefits under RA No. 660 and RA No. 8291 are paid by GSIS. Thus, the liability only
pertains to RA No. 1616.
Other provisions include Retirement Incentive Award (RIA) given to employees with at least
20 years of creditable service and are entitled to P5,000 for every year of service upon
retirement. As at December 31, 2021, 273 employees were given RIA in the total amount of
P47.184 million.
The provision of the SSS’ defined benefit obligation is prepared in accordance with the PAS
19. The defined benefit obligations represent the SSS’ liabilities for the post-employment
benefits of its employees. It is calculated using the Projected Unit Credit (PUC) Method, the
valuation method prescribed under PAS 19. Using this method, the present value of SSS’
defined benefit obligations and related current service costs were calculated with the
assumption that each period of service gives rise to an additional unit of benefit entitlement
and measures each unit separately in building up the final obligation.
Aside from financial assumptions, demographic assumptions were also used in the
calculations. These include the assumptions on mortality, disability, and turnover/separation
of the employees. The mortality assumptions refer to the probability of death of an employee
while the disability assumptions refer to the probability of an employee being disabled. The
employee turnover assumptions take into account the probability of an employee leaving
employment due to causes other that death (e.g., resignation, retirement, etc.).
Other provisions also include liability for mortgage redemption insurance for housing and
real estate loans amounting to P1.361 million and P1.419 million CY 2021 and CY 2020,
respectively (see Note 27).
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20. INSURANCE CONTRACT LIABILITY
2021 2020
Social Security Fund (SSF) 7,591,297,256,633 6,734,089,235,597
Employee’s Compensation (EC) Fund 38,283,091,820 23,131,055,080
7,629,580,348,453 6,757,220,290,677
Insurance contract liability (ICL) is a social benefit liability (SBL) recognized in compliance
with DOF’s policy directive requiring government insurance institutions (GIIs) falling under its
supervision to adopt PFRS 4, the adoption of which was approved by the SSC under
Resolution No. 123-s.2021 dated March 10, 2021. It is computed based on six per cent
discount rate considering SSS’ past investment performance, which considered the
following: (a) past performance of SSS’ investment assets; (b) collectability of its loan
receivables; and (c) forward-looking view of the portfolio performance or outlook on SSS’
investments and market conditions.
ICL is the sum of the present value of future benefits and expenses, less the present value
of future contributions discounted at the appropriate risk-free discount rate. Actuarial
valuation methodology and assumptions are discussed in Note 22.
21. OTHER PAYABLES
This account is composed of undistributed collections as follows:
2021 2020
Current
Member loans collection 615,584,146 671,036,222
Sales Contract Receivable (SCR) collections 94,359,462 56,046,853
OFW collections 45,764,809 89,068,802
Undistributed collections 1,373,898 51,746,331
Real estate loans collection 143,308 14,560,934
Rental collection 135,194 0
Employees’ housing loan program 0 80,520
757,360,817 882,539,662
Non-current
Other payables 50,000,000 50,000,000
807,360,817 932,539,662
On member loans collection, the balance of unposted collections for CY 2021 amounting to
P615.584 million was lower than CY 2020 unposted collections by P55.452 million or 8.26
per cent because the SSS has undertaken various efforts to address the posting issues and
expedited the reconciliation process through (1) enhancing computer programs and
systems, (2) continuous sending and monitoring of No Collection List and Unbalance
Transactions to branches, (3) regular clean-up of unpostables and reconciliation and (4)
improved frequency of generating the Actual Distribution of payments in the enhanced Loan
Management System on a semi-monthly basis.
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Undistributed collections for SCR are collections for the sale of acquired assets that have
not yet been posted to individual buyers' account pending receipt of documents of approved
sale. These consist of down payments and monthly amortizations.
OFW collections are remittances from OFWs which are unidentified as of the date of
remittance and are reclassified after validation. The decrease in OFW collections amounting
to P43.304 million of foreign deposits which are already validated and identified were
reclassified to proper accounts.
The Undistributed collections accounts always carry respective balances at the end of any
given period. These are collections of loan amortizations and contributions that have not yet
been posted to individual members or borrowers and other accounts pending receipt of
collecting agencies’/employers’ documents and actual distribution of collections and
payments whose nature are not indicated by payors.
Since November 2020, SSS has been sending loan billing notices to member-borrowers and
employers. This loan billing statement or notice contains a corresponding PRN as part of the
Real-Time Processing of Loans (RTPL) program. Individual members and employers must
present the PRN when paying at SSS branches with Automated Tellering System or any
RTPL-compliant partner. The PRN helps facilitate the immediate and correct posting of loan
payments matched to their loan accounts.
The non-current portion of Other Payables represents the P50.0 million seed money to fund
the initial investment activities of the PESO fund. The SSC in its Resolution No. 140-s.2021
dated March 24, 2021, approved the extension of the use of the money until the liquidation
of the SSS PESO Fund upon the implementation of the new Voluntary Provident Fund
Program.
22. EQUITY
The SSS’ Equity consists of the following:
2020
2021
As restated
Reserve fund (6,951,136,953,816) (6,106,279,980,864)
Cumulative changes in fair value (9,167,674,519) (23,809,882,311)
Revaluation surplus 6,572,652,754 4,046,242,799
Members’ equity 16,863,603,589 1,281,698,533
(6,936,868,371,992) (6,124,761,921,843)
22.1 Reserve fund
The reserve fund consists of the following:
2020
2021
As restated
Reserve fund/Retained earnings 678,447,913,254 650,943,967,536
Reserved fund - policy reserves (7,629,584,867,070) (6,757,223,948,400)
(6,951,136,953,816) (6,106,279,980,864)
57
The SSS has recognized a net profit of P28.446 billion for the year ended December
31, 2021, before the recognition of net change in policy reserves of P872.360 billion,
due to adoption of PFRS 4 and as at that date, total assets amounted to P702.402
billion. However, as described in Note 20, there is a significant increase in liability as
the SSS recognized the social benefit liability to its members.
Management believes that the payment of benefits will remain as usual and is
confident that it will operate until 2054 as projected by Actuarial experts. The
implementation of the new contribution rates and the increase in the Monthly Salary
Credit to P25,000 effective January 01, 2021 helped sustain its operations and that will
be sufficient to meet operational requirements. Furthermore, under RA No. 11199,
otherwise known as the Social Security Act of 2018, Section 21, the Philippine
Government guarantees that all the benefits prescribed in the RA shall not be
diminished and it accepts general responsibility for the solvency of the System.
Management acknowledges that uncertainty remains over the ability of SSS to meet
its funding requirements to pay its members’ benefits and operational expenses.
However, as described above, Management has a reasonable expectation that the
SSS has adequate resources to continue in operational existence for the foreseeable
future.
Investment Reserve Fund (IRF)
All revenues of SSS that are not needed to meet the current administrative and
operational expenses are accumulated in the reserve fund. Such portion of the reserve
fund that is not needed to meet the current benefit obligations is known as the IRF
which the SSC manages and invests with the skill, care, prudence and diligence
necessary to earn an annual income not less than the average rate of treasury bills or
any other acceptable market yield indicator in any or in all of the undertaking, under
such rules and regulations as may be prescribed by the SSC.
No portion of the IRF or income thereof shall accrue to the general fund of the NG or
to any of its agencies or instrumentalities, including government-owned or controlled
corporations, except as may be allowed under the SS Act of 2018. It also provides that
no portion of the IRF shall be invested for any purpose or in any instrument, institution
or industry over and above the prescribed cumulative ceilings as follows: 60 per cent
in private securities, 5 per cent in housing, 30 per cent in real estate related
investments, 25 per cent in short and medium-term member loans, 30 per cent in
government financial institutions and corporations, 15 per cent in any particular
industry, 7.5 per cent in foreign-currency denominated investments, 5 per cent in
private-sponsored infrastructure projects without guarantee, 5 per cent in private and
government-sponsored infrastructure projects with guarantee, and 5 per cent in private
and government-sponsored infrastructure projects.
As at December 31, 2021, all investment categories are within the SSS charter limits
of RA No. 11199.
58
Actuarial Valuation of the reserve fund of the SSS
The SS Act of 2018 requires the SSS Actuary to submit a valuation report every three
years or more frequently as may be necessary, to determine the actuarial soundness
of the reserve fund of the SSS and to recommend measures on how to improve its
viability.
The reserve fund is affected by (a) changes in demographic factors (such as

increased life expectancy, ageing of population, declining fertility level and delay in
retirement) and (b) the economic conditions of the country. Economic factors on which
assumptions are made include interest rates, inflation rates and salary wage
increases. With these and other assumptions, and taking into account the uncertainty
of future events, the liability and life of the fund are projected.
The latest 2019 Actuarial Valuation of the Social Security Fund (SSF) adheres to the
International Standard of Actuarial Practice 2 – Financial Analysis of Social Security
Programs as issued by the International Actuarial Association (IAA). This standard has
been supported within the International Social Security Association (ISSA) and the
International Labour Organization (ILO). It provides actuaries performing the valuation
of social security programs the guidance to give intended users confidence that
actuarial services are carried out professionally and with due care; the results are
relevant to their needs and are presented clearly and understandably; and the
assumptions and methodology used are disclosed appropriately. It also promotes the
development of consistent actuarial practice for social security programs throughout
the world.
The Actuarial Valuation estimates the SSF life and liabilities using an open group
projection method, where members who will join the System in the future are
considered in the projection of revenues and expenditures. The SSS program, as with
other social security schemes, was designed such that the contributions of the current
paying members fund the benefits of the current pensioners; hence, there is income
transfer across generations. With the continuous membership of future generations
into the System, the benefits of the current and future pensioners are continuously
funded by the contributions of the former; hence, the open-group projection method is
appropriate in assessing the sustainability of the SSS program.
SSS has transitioned to PFRS 4 on the reporting of its financial condition, starting with
the 2020 Financial Statements. Valuation standards set by the Insurance Commission
are to be applied, where the life insurance policy reserve shall be valued, where
appropriate, using gross premium valuation. Unlike the open group projection method
used in the Actuarial Valuations, the gross premium valuation applies a closed group
projection method, which only considers the existing members up to end of reporting
date while continuing their contribution up to a certain date. The liability computed with
this approach is highly theoretical, as it is only truly meaningful for a program that is
intended to be fully funded. Nevertheless, it provides an insight as to the magnitude of
the liability of a program that is designed to be partially funded, such as the SSS
program.
In the gross premium valuation used under the closed group projection method, the
Social Benefit Liability (SBL) is computed as the sum of the present value of future
benefits and expenses, less the present value of future contributions discounted at the
59
appropriate risk-free discount rate. In contrast, under the open group projection
method, assets are deducted from the SBL to estimate the unfunded liability.
The Valuation using the closed group projection method was conducted for the
reporting date of December 31, 2019, December 31, 2020, and December 31, 2021.
The cut-off date for actual membership and demographic data is December 31, 2018.
These existing members together with new entrants up to the end of reporting date,
who continue their contribution up to a certain date, were considered in the
projections.
As shown in the following table, the computed social benefit liabilities at a discount
rate of 6 per cent are computed at P6.273 trillion as of December 31, 2019, P6.734
trillion as at December 31, 2020 and P7.591 as at December 31, 2021.
Social Security Fund

Summary of Social Benefit Liability
(Amount in Trillion Pesos)
As at December As at December As at December

31, 2019 31, 2020 31, 2021
Social Benefit Liability
6.273 6.734 7.591
at 6% discount rate
Meanwhile, the comparison of the liabilities computed under the open and closed
group projection methods is presented in the following table.
2019 Actuarial Valuation

Comparison of Key Projection Results
Open Group versus Closed Group
Key Projection Results Open Group Closed Group

Year of Reserve Exhaustion 2054
Year Net Revenue Becomes Negative 2045
Liability Computation
(Discount rate = 6 per cent) (As at Dec. 31, 2021) (As at Dec. 31, 2021)
Social Benefit Liability 6.874 7.591
Reserves 0.626
Unfunded Liability 6.248
The valuation of a social security scheme, which is usually made using the open-group
method, has financial indicators as outputs that provide information on the future
evolution of costs and on the capacity of the scheme to support them in the long term.
One such financial indicator is the year of reserve exhaustion, which presents the
number of years the scheme may continue to operate without any changes being
made to the legislated contribution rate.1 For the SSF, this year is projected to be in
2054.
1
Pierre Plamondon, et al., Actuarial Practice in Social Security (Geneva: International Labor Organization,
2002).
60
The SBL as of December 31, 2021 is at P7.591 trillion, computed using the closed
group method. Meanwhile, using the open group method, the liability is at P6.874
trillion. As expected of a partially funded program, the liability under the closed group
method is larger than that from the open group method.
Instead of a seriatim approach, these projections apply a portfolio approach, which

works to the advantage of SSS considering the magnitude of its membership data.
Lapse assumptions are implicitly considered as well, in the form of density
assumptions, probability of contribution payment in a given year, and movement
among contributing and non-contributing groups. Margin for Adverse Deviation (MfAD)
was applied, as the conservative scenario of the Valuation was used as basis in the
liability computations. Meanwhile, these projections already incorporated the
scheduled contribution increases up to 15 per cent in 2025 as mandated by RA No.
11199 (Social Security Law of 2018). Note that the projections do not reflect yet the
potential impact of the COVID-19 pandemic on the SSS social security program.
The magnitude of the liabilities was caused in part by a structural imbalance, brought
about by the mismatch of the increases in pension, monthly salary credit (MSC) ceiling
and contribution rate. During the period from 1980 to 2016, pensions were increased
through across-the-board pension increases of up to 20 per cent (22 times) and
increases in minimum pension amount through RA No. 8282; MSC ceiling was also
increased 12 times. The contribution rate, on the other hand, only increased 4 times
during the same period, from 8 per cent to 8.4 per cent in 1980, 8.4 per cent to 9.4 per
cent in 2003, then to 10.4 per cent in 2007, and finally to 11 per cent in 2014.
The effect of demographic change on the fund should also be recognized, as there
may not be enough contributors remitting to pay all the expenses and benefits of the
growing number of pensioners due to declining population growth rate and lengthening
life spans.
To address these and other issues on the viability of the reserve fund, actuarial
valuations and other studies are conducted regularly, the results of which serve as
basis of recommendations for policy reforms. The recommendations mentioned in the
valuations include raising the contribution rate, improving the contribution collection,
increasing the minimum and maximum MSC, revisiting the pension formula, reviewing
the qualifications for eligibility for long-term benefits, raising the retirement age, and
exploring other means to improve the adequacy of benefits. Further, reform packages
and other measures shall be formulated, which simultaneously address the interest of
the stakeholders of SSS: benefit adequacy for current pensioners, and financial
sustainability for future pensioners, who are now active contributors of the SSS.
Actuarial Valuation of the Reserve Fund of Employees’ Compensation (EC)
SSS manages the Employees’ Compensation Program (ECP), which provides social
protection against work-related sickness, injury or death, for private sector workers
and household helpers who are compulsory members of SSS. Starting 2019, self-
employed members were added to the coverage of the program. With the ECP
providing coverage to the same members covered under the SS Law, the Actuarial
Valuation of the Social Security (SS) Fund then serves as basis for the conduct of the
EC Actuarial Valuation. The data, actuarial bases and assumptions, as well as
61
methodology used in the EC Actuarial Valuation are similar to that used in the SS
Actuarial Valuation.
The 2019 EC Actuarial Valuation is the latest conducted valuation, which was used as
basis for the computation of liabilities. This 2019 EC Actuarial Valuation was based on
the 2019 SS Actuarial Valuation.
Similar to the SS Actuarial Valuation, the EC Actuarial Valuation applies the open
group projection method, where members who will join the System in the future are
considered in the projection of revenues and expenditures.
In the transition of the reporting of the financial condition to PFRS 4, the liability for the
EC Fund is computed using the same methodology that was applied to that of the SS
Fund. In particular, the closed group projection approach of gross premium valuation
was applied, where the members that were considered are only those existing
members up to the end of reporting date while continuing their contribution up to a
certain date. The reporting dates considered were December 31, 2019, December 31,
2020, and December 31, 2021.
The 2018 data on SSS employed members and household helpers was used for the
EC Valuation. To apply the closed group methodology in this EC Valuation, new
entrants who enter up to year 2019, 2020 or 2021 were included, as applicable to the
reporting date. Starting 2019, self-employed members were included in the
projections.
The following table presents the computed liability of P22.569 billion as of December
31, 2019, P23.131 billion as of December 31, 2020, and P38.283 billion as at
December 31, 2021, at a discount rate of 6 per cent.
Employees’ Compensation Fund

(Amount in Billion Pesos)

31, 2019 31, 2020 31, 2021
Insurance Contract
Liability 22.569 23.131 38.283
at 6% discount rate
The comparison of the liabilities computed under the open and closed group projection
methods is presented in the following table.
2019 EC Actuarial Valuation


Year of Reserve Exhaustion Beyond 2080
Year Net Revenue Becomes Negative Beyond 2080
62
Reserves 24.295
Unfunded Liability (13.619)
For the EC Fund, the year of reserve exhaustion is projected to be beyond 2080.
The SBL as of December 31, 2021 is at P38.283 billion, computed using the closed
billion. As expected of a partially funded program, the liability under the closed group
works to the advantage of SSS considering the magnitude of EC membership data.
liability computations. Meanwhile, these projections already incorporated the impact of
SS Act of 2018, coverage of the self-employed, EO No. 33 and EO No. 54.
22.2 Revaluation surplus
Revaluation surplus is the result of revaluation of land under property and equipment.
The balance represents the excess of revaluation/appraisal value over the book value
of the revalued asset. The revaluation surplus amounted to P6.573 billion and P4.046
billion as at December 31, 2021 and 2020, respectively.
22.3 Members’ equity
2021 2020
Mandatory provident fund 15,484,997,775 0
Flexi fund 1,245,784,042 1,164,691,900
PESO fund 132,821,772 117,006,633
16,863,603,589 1,281,698,533
The SSS, in pursuit of its mission under RA No. 11199, otherwise known as the SS Act
of 2018, to promote social justice through savings and advance the value of “work,
save, invest and prosper” and SSC Resolution No. 458-s. 2020 dated September 09,
2020 approved the implementation of the Mandatory Provident Fund (MPF) Program
for SSS members effective January 01, 2021. The program which is known as the
Workers’ Investment and Savings Program (WISP) consists of contributions of
employers and employees, self-employed, OFW and voluntary members, based on
monthly salary credit (MSC) in excess of P20,000 up to the prescribed maximum MSC,
and their earnings. The program aims to provide SSS members with a convenient and
tax-free savings scheme for payment of benefits to such members or their
beneficiaries in addition to the benefits provided under RA No. 11199.
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Members’ equity is also composed of the contributions and guaranteed earnings of
Flexi Fund and PESO Fund members. Guaranteed earnings are computed based on
SSS’ short term peso placement rate or 91-day Treasury Bill rate, whichever is higher
for Flexi Fund, and for PESO Fund, based on the 5-year Treasury Bond rate and 364-
day Treasury Bill rate.
22.4 Cumulative changes in fair value
2020
2021
As restated
Balance, January 1 (23,809,882,311) (31,501,686,059)
Net gain (loss) arising on revaluation of
financial assets at FVTOCI 14,642,207,792 7,691,803,748
Balance, December 31 (9,167,674,519) (23,809,882,311)
The unrealized gain/(loss) from changes in fair value represents the investments
revaluation reserves arising on the revaluation of financial assets that have been
recognized in other comprehensive income.
23. SERVICE AND BUSINESS INCOME
2020
2021
As restated
Members’ contributions 225,648,375,466 205,697,219,568
Interest income 21,164,523,170 21,410,227,409
Dividend income 3,730,308,666 4,005,185,841
Fines and penalties – business income 3,177,763,026 3,549,293,191
Rent/lease income – investment properties 1,183,610,613 1,111,175,653
Income from acquired/foreclosed assets 14,383,180 16,662,136
Management fees 11,647,182 11,016,493
Other business income 383,474,727 606,192,786
255,314,086,030 236,406,973,077
The service and business income for CY 2021 amounting to P255.314 billion was higher
than CY 2020 revenue by P18.907 billion or 8 per cent mainly due to the increase in
contribution rates.
Starting January 1, 2021, the contribution rate increased by one per cent, from the current
12 per cent to 13 per cent. For employed members, including OFW members in countries
with Bilateral Labor Agreements with the Philippines, and sea-based OFW members, the
additional one per cent is divided equally between them and their employers.
Likewise, the minimum MSC was adjusted to P3,000 from P2,000, except for Kasambahay
and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively,
while the maximum MSC was raised to P25,000 from P20,000. The MSC to be considered
for the computation of benefits under the regular social security program is capped at
P20,000.
64
The SSS, as part of its corporate social responsibility, provided the Pandemic Relief and
Restructuring Programs for the benefit of SSS members and employers affected by the
COVID-19 pandemic.
• SSC Resolution No. 444-s.2021 dated September 1, 2021 and pursuant to

Section(4)(a)(1) in relation to Section 22(a) of the Social Security Act of 2018
approved the Pandemic Relief and Restructuring Program 1 - Nationwide
implementation of the extension of deadline of Contributions for applicable month of
July from August 31, 2021 to September 30, 2021.
• SSC Resolution No. 524-s.2021 dated October 13, 2021 and 557-s.2021 dated
November 3, 2021, approved the Pandemic Relief and Restructuring Program 2 –
Condonation of Penalties on Social Security Contributions. Availment period is from
November 2021 to April 2022.
• SSC Resolution No. 466-s.2021 dated September 15, 2021, approved the ECC and
SSS Joint Circular on the Pandemic Relief and Restructuring Program 3 – Enhanced
Installment Payment Program. Availment period is from November 2021 to October
2022.
Interest income is derived from the following SSS investments:
2020
2021
As restated
Bonds investments
FA at FVTPL 1,164,239,309 994,894,400
FA at FVTOCI 2,471,764,720 2,632,154,029
FA at amortized cost 11,543,473,341 13,601,052,759
15,179,477,370 17,228,101,188
Loans and receivables 5,490,060,149 3,489,195,439
Current/savings/term deposits 420,257,963 607,557,372
Time deposits/treasury bills 0 5,645,958
Others 37,617,688 73,542,452
21,127,413,170 21,404,042,409
Other business income includes the following:
2020
2021 restated
Rental/Penalty Income-Operating Assets 8,088,550 10,913,250
Inspection Fees-REL 1,000 0
Pre-Termination Fee-Flexi-Fund 5,209 11,483
Income from ID Replacement 9,571,767 20,142,209
Fire Insurance Premium 4,397,598 5,078,142
Service Fee-Salary Loan 323,487,630 534,887,345
Rebate of management fees 37,922,973 35,160,357
383,474,727 606,192,786
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24. GAINS
2020
2021
As restated
Gain from changes in fair value of financial
instruments 10,001,098,877 9,958,501,994
Gain from changes in fair value of investment
properties 7,693,934,051 6,651,334,489
Gain on sale/redemption/transfer of
investment 1,127,664,127 1,575,788,085
Gain on sale of investment properties 19,150,928 7,447,765
Gain on sale/disposal of property and equipment 3,181,451 716,809
Gain on foreign exchange (FOREX) 31,796,556 297,636
18,876,825,990 18,194,086,778
Fair value adjustment of financial instruments for CY 2021 at P10.001 billion is higher than
the CY 2020 gain by P42.597 million, mostly due to stock market appreciation of equity
securities.
Investment properties are remeasured at fair value, which is the amount for which the
property could be exchanged between knowledgeable, willing parties in an arm’s length
transaction. Gains or losses arising from changes in the fair value of the investment
properties are included in profit or loss for the period in which they arise.
Gain on sale/redemption/transfer of investments includes realized gain on sale of equity

securities, government securities and NCAHFS.
25. OTHER NON-OPERATING INCOME
2020
2021
As restated
Reversal of impairment loss 1,173,348,799 2,202,817,871
Miscellaneous income 964,835,995 440,536,451
2,138,184,794 2,643,354,322
The SSS considers certain financial assets to have recovered from impairment losses
amounting to P1.173 billion due to the enhanced loan collection efforts and digitalization
initiatives implemented by SSS. Recoveries/reversal of impairment loss are from the
principal, interest and penalties of the following financial assets:
2020
2021
As restated
Member loans 552,365,551 2,021,770,269
Sales contract receivable 285,857,998 859,534
Loan to NHMFC 141,879,813 0
66
2020
2021
As restated
Housing loans 57,668,594 47,994,224
Property and equipment 51,837,287 0
ROPA acquired assets 3,488,532 3,969,481
Collecting banks/agents 3,798,110 10,593,497
Advances – FIP and MRI 2,214,452 1,658,651
Rental receivables 1,323,604 845,304
Other receivables (pension loan, officials &
employees) 200,110 391,813
1,173,348,799 2,202,817,871
Miscellaneous income includes income from car insurance, director’s fees, income from
SSS dormitory and others, with the following details:
2021 2020
Director’s fee 110,973,108 107,181,568
Income from car insurance 2,503 4,287
Income from SSS dormitory 7,500 35,459
Current/Prior Years’ adjustments 853,852,884 333,315,137
964,835,995 440,536,451
The increase in Current/Prior Years’ adjustments amounting to P520.538 million is mainly
due to the reconciliation of previous year's collection of premium contributions from various
collecting partners amounting to P399.467 million but only recognized in CY 2021.
26. BENEFIT PAYMENTS
This account represents payments to members and their beneficiaries in the event of
disability, sickness, maternity, old age, death and other contingencies resulting in loss of
income or financial burden. Total benefit payments amounted to P223.982 billion and
P194.871 billion, with total number of beneficiaries of 36,898,812 and 33,518,048, for CYs
2021 and 2020, respectively, as follows:
2021 2020
Retirement 129,938,540,139 115,440,395,522
Death 63,443,066,863 55,704,638,322
Maternity 13,897,985,503 10,494,277,060
Disability 6,289,747,376 6,430,682,592
Funeral grant 5,294,125,744 3,073,451,260
Sickness 4,042,820,078 2,010,912,997
Unemployment 1,069,857,440 1,709,010,067
Medical services 5,843,329 7,489,404
223,981,986,472 194,870,857,224
Benefit payments of P223.982 billion in CY 2021 is higher than last year’s benefit payments
by P29.111 billion or 14.94 per cent due to an increase in the number of claims and grants
of P20,000 one-time financial assistance to EC pensioners. The COVID-19 pandemic in the
67
country which started in the first quarter of 2020 has prevented most SSS members in filling
out benefit claims in the branches. However, on the latter part of the same year, the
implementation of on-line applications and transactions through the My.SSS facilitated the
timely processing of benefit claims payout.
Administrative Order No. 39-s.2021 dated April 19, 2021, SSC Resolution No. 285-s.2021
dated May 26, 2021, and ECC Board Resolution No. 21-05-19 approved the grant of one-
time financial assistance of P20,000 to EC pensioners in the private sector with at least one-
month permanent partial disability, permanent total disability or survivorship pension from
January 1, 2020 to May 31, 2021.
27. NET CHANGE IN POLICY RESERVES
SSC Resolution No. 123-s. 2021 dated March 10, 2021 approved the adoption of the PFRS
4 in the computation of the ICL for the CY 2020 financial statements and onwards and the
use of the discount rate of six per cent.
Net change in policy reserves for CY 2021 is P872.360 billion representing 77.88 per cent of
the total expenses for the year. This is P410.612 billion or 88.93 per cent more than the CY
2020 provision of P461.748 billion.
2020
Policy Reserves 2021
As restated
Insurance Contract Liability
SSF 7,591,297,256,633 6,734,089,235,597
EC-SIF 38,283,091,820 23,131,055,080
Mortgagors’ Insurance Account (MIA) 4,570,385 5,128,104
7,629,584,918,838 6,757,225,418,781
Net Change
SSF 857,208,021,037 461,186,416,321
EC-SIF 15,152,036,740 561,648,909
MIA (557,720) 51,767
872,359,500,057 461,748,116,997
28. PERSONNEL SERVICES
2021 2020
Salaries and wages 3,493,641,133 2,876,292,103
Other compensation 1,967,953,966 1,599,734,421
Personnel benefit contribution 1,587,516,717 1,552,674,762
Other personnel benefits 677,922,760 740,123,836
7,727,034,576 6,768,825,122
Pursuant to RA No. 10149 which mandates the Governance Commission of GOCCs (GCG)
to develop a Compensation and Position Classification System (CPCS) for GOCCs, and by
virtue of the powers vested in the President of the Philippines, EO No. 150, series of 2021,
was signed and approved by the President on October 1, 2021.
68
Personnel services accounts include the projected amount of P1.06 billion representing the
differentials in basic salaries, mandatory government contributions and year-end pay for the
period October to December 2021 of qualified regular and casual employees in view of the
approval of the CPCS which took effect on October 5, 2021 and on the CPCS Implementing
Guidelines No. 2021-01 dated January 12, 2022 which came out on January 14, 2022.
Personnel benefit contribution includes 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 as provided under Section 4.a.3 of the
RA No. 11199. The affairs and business of the fund are directed, managed and
administered by a Board of Trustees. Upon retirement, death or resignation, the employee
or his heirs will receive from the fund payments equivalent to his contributions, his
proportionate share of the SSS’ contributions and investment earnings thereon.
As at December 31, 2021, SSS has a total of 6,780 regular and casual personnel of which
90 are new employees but net of 292 retired/separated employees.
29. MAINTENANCE AND OTHER OPERATING EXPENSES (MOOE)
2021 2020
General services 415,706,451 298,040,563
Repairs and maintenance 258,895,606 154,298,555
Utility expenses 196,339,897 185,458,788
Labor and wages 173,605,631 271,609,882
Communication expense 134,310,843 119,794,829
Professional expenses 91,317,388 73,451,327
Supplies and materials expenses 54,745,595 84,414,882
Taxes, insurance premiums and other fees 27,214,051 23,044,233
Travelling expenses 23,072,189 34,737,165
Training and scholarship expenses 7,998,374 5,919,432
Awards/Rewards, prizes, and indemnities 2,348,245 58,890
Confidential, intelligence and extraordinary
expenses 1,119,974 1,133,330
Other MOOEs 298,426,713 250,124,722
1,685,100,957 1,502,086,598
Other maintenance and operating expenses consist of the following:
2021 2020
Fees and commission expenses 94,683,581 77,391,199
Subscription expenses 68,193,996 60,371,215
Printing and publication expenses 48,967,906 42,592,396
Transportation and delivery expenses 33,798,606 6,626,774
Advertising, promotional and marketing expenses 19,473,097 29,546,938
Directors and committee members' fees 15,732,412 14,124,861
Membership dues and contributions to 6,176,691 5,966,986
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2021 2020
organizations
Rent/lease expenses 5,992,079 7,457,832
Donations 117,575 0
Other maintenance and operating expenses 5,290,770 6,046,521
298,426,713 250,124,722
30. FINANCIAL EXPENSES
2021 2020
Interest expenses – lease liability 55,992,142 63,740,243
Bank charges 36,825,091 12,481,326
Other financial charges 121,277,321 142,523,100
214,094,554 218,744,669
The SSS recognizes interest expense on the lease liability calculated using the effective
interest method in view of the new accounting standard on leases (see Note 2.14).
Other financial charges represent investment related expenses incurred in connection with
managing the investment properties, broker’s commissions on trading financial assets and
other depository maintenance and off-exchange trade fees. It also includes Flexi Fund and
PESO Fund management fees amounting to P11.647 million and P11.012 million for CY
2021 and CY 2020, respectively.
31. NON-CASH EXPENSES
2021 2020
Losses 11,362,768,311 14,053,746,815
Impairment loss 2,257,440,118 1,891,006,342
Depreciation 614,666,658 511,531,053
Amortization 40,317,779 45,454,897
14,275,192,866 16,501,739,107
The SSS recognizes losses from the following:
2021 2020
Changes in fair value of financial instruments 7,731,406,906 9,732,922,304
Changes in fair value of investment properties 3,166,190,266 3,746,306,187
Sale/Redemption/Transfer of investments 456,332,314 573,056,351
Foreign exchange 6,783,751 1,087,240
Sale/Disposal of PE and other assets 2,055,074 374,733
11,362,768,311 14,053,746,815
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32. ASSISTANCE AND SUBSIDY
The Educational Assistance Loan Program (EALP) is funded on a 50:50 basis from the NG
and SSS. There were no subsidies for EALP received for CYs 2021 and 2020.
The NG counterpart of P3.5 billion was released under Special Allotment Release Order No.
BMB-F-12-0031251 dated December 14, 2012. The total cash allocations released to SSS
from CY 2012 to CY 2018 amounted to P2.828 billion, as follows:
NCA No. Date Amount

2012
BMB-F-12-0023901 December 14, 2012 45,279,995
2013
BMB-F-13-0017483 September 23, 2013 480,771,648
BMB-F-13-0020336 November 11, 2013 278,800,497
759,572,145
2014
BMB-F-14-0005474 May 2, 2014 260,637,040
BMB-F-14-0012071 August 27, 2014 178,052,884
BMB-F-14-0016332 November 10, 2014 332,923,150
771,613,074
2015
BMB-F-15-0005560 April 29, 2015 32,207,250
BMB-F-15-0016231 October 26, 2015 374,662,670
406,869,920
2016
BMB-C-16-0006531 April 28, 2016 64,198,930
BMB-C-16-0016736 September 15, 2016 54,212,150
118,411,080
2017
BMB-C-17-0000790 January 9, 2017 193,867,300
BMB-C-17-0007120 May 17, 2017 72,955,264
BMB-C-17-0015979 October 11, 2017 274,253,486
541,076,050
2018
BMB-C-18-0019433 September 17, 2018 185,357,643
2,828,179,907
33. LEASE COMMITMENTS
SSS as lessee
The SSS leases offices for its various branches under cancellable operating lease
agreements. The leases have varying terms, escalation clauses, and renewal rights. The
extension option is exercisable up to one year after the lease period has expired as running
from month-to-month with the same terms and conditions as stipulated. On the other hand, if
71
either party desires to terminate prior to expiration of the lease period, the desiring party
shall inform the other party in writing of such intention at least 60 days before the intended
termination date. There are no residual value guarantees and sale and leaseback
transactions in the lease agreement.
Out of the 310 local and foreign branches, 136 offices located in various locations are rent-
free. As at December 31, 2021 and 2020, the total lease payment made amounted to
P248.855 million and P228.551 million, respectively (see Notes 15 and 29). Further, there
are no sublease agreements made and no occurrences of contingent rent.
SSS as lessor
The SSS leases out a portion of its office space to various tenants under cancellable
operating lease agreements and the minimum lease rental amounts to at least P3,920 per
month. The leases have varying terms, escalation clauses and renewal rights. A renewal
option is available to the lessee who shall give written notice of its intention to renew at least
60 calendar days prior to the expiration of the lease period. If the lessee continues in the
occupation of the leased premises with the consent of the lessor after the term, said
extension of the contract shall be understood as running from month-to-month basis under
the same terms and conditions stipulated in the agreement, but the monthly rental shall all
be escalated based on the SSS leasing guidelines. For the pre-termination terms, either
party may pre-terminate the lease for any reason, provided that the party who initiates the
pre-termination shall inform the other party in writing at least 60 calendar days before the
intended date of termination. In case the lessee voluntarily pre-terminates the lease
agreement, the lessee shall pay the SSS a pre-termination fee to be deducted from the
security deposit.
Total rental income earned as at December 31, 2021 and 2020 amounted to P1.205 billion
and P1.137 billion, respectively, details as follows:
2021 2020
Investment properties 1,183,610,613 1,111,175,653
Leased acquired/foreclosed assets 13,648,203 16,395,604
Operating assets 7,775,572 9,513,537
1,205,034,388 1,137,084,794
34. RELATED PARTY DISCLOSURES
As at December 31, 2021, the composition of the Social Security Commission (SSC) is as
follows:
Board Position Name Appointment

1. Ex-Officio Chairperson Carlos G. Dominguez III Secretary, Department of Finance
2. Vice-Chairperson Aurora C. Ignacio President & CEO, SSS
3. Ex-Officio Member Silvestre H. Bello III Secretary, DOLE
4. Member Michael G. Regino Representing the Workers’ Group
5. Member Ricardo L. Moldez Representing the Employers' Group
6. Member Diana Pardo-Aguilar Representing the Employers' Group
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7. Member Anita Bumpus-Quitain Representing the Workers' Group
8. Member Manuel L. Argel, Jr Representing the Employers' Group
9. Member Bai Norhata Macatbar Representing the Workers' Group
Alonto
Key Management Personnel Remuneration and Compensation
The management personnel of SSS are the President and CEO, Executive Vice President
and Senior Vice Presidents of the operating and support groups. The remunerations of key
management personnel during the year are as follows:
2021 2020
Salaries 32,200,430 29,303,046
Other allowances and benefits 25,553,472 20,829,907
57,753,902 50,132,953
Meanwhile, the total remuneration received by the Board of Commissioners amounted to

P17.067 million and P19.799 million for CYs 2021 and 2020, respectively.
35. RESTATEMENT
The following tables summarizes the effect of prior period adjustments and reclassification of
assets.
a. Effect on the Statement of Financial Position
December 31, 2020
Effect of
Accounts affected As previously
restatement/ As Restated
reported
reclassification
1. Interest Receivable 3,942,978,871 20,912,032 3,963,890,903
2. FA at AC - Debenture Bonds - 3,213,170,775 3,213,170,775
3. FA at FVTOCI - CNB-Cnotes 2,338,750,686 (2,338,750,685) 1
4. Non-current Interest Receivable
CNB-Cnotes 120,443,595 (114,281,677) 6,161,918
5. Accumulated Impairment Loss –
Interest Receivable CNB-Cnotes (120,443,594) 114,281,677 (6,161,917)
6. Non-current Receivable Gov
Agencies/Corp-PhilGuarantee 0 1,600,000,000 1,600,000,000
7. Interest Income PhilGuarantee
Debenture Bonds 0 2,374,865,446 2,374,865,446
Receivable 0 6,185,0000 6,185,000
9. Gain on sale/redemption/transfer of
investment 1,162,471,020 413,317,065 1,575,788,085
10. Unrealized Gain/(Loss) FVTOCI-
CNB-Cnotes 410,490,701 (413,317,065) (2,826,364)
11. Reserve Fund (6,109,188,630,052) 2,908,649,188 (6,106,279,980,864)
12. Loans and Receivable Accounts
Receivable – CB/CA 0 667,306,566 667,306,566
Non-current Receivable – CB/CA 0 316,447,220 316,447,220
Accumulated Impairment Loss –
Non-current Receivable – CB/CA 0 (129,471,100) (129,471,100)
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December 31, 2020
Effect of
reported
reclassification
13. Other Receivable
Receivable – CB/CA 667,306,566 (667,306,566) 0
Non-current Receivable – CB/CA 316,447,220 (316,447,220) 0
Non-current Receivable – CB/CA (129,471,100) 129,471,100 0
14. Financial Liabilities 4,631,585,479 (156,254,268) 4,475,331,211
15. Lease payable 0 156,254,268 156,254,268
b. Effect on the Statement of Comprehensive Income

December 31, 2020
Effect of
reported
reclassification
1. Interest Income 19,029,176,963 2,381,050,446 21,410,227,409
2. Gain on Sale/Redemption/ Transfer
of Investments
Gain on S/D of FVTOCI-CNB-
Cnotes 0 413,317,065 413,317,065
3. Reversal of Impairment Loss
Recovery of Imp Loss IRFVTOCI-
CNB Cnotes 0 114,281,677 114,281,677
36. FINANCIAL RISK MANAGEMENT
SSS manages the existing and emerging risks across the entire organization. These risks
can be divided into four principal risk categories: Financial Risks, Insurance & Demographic
Risks, Strategic Risks and Operational Risks. To provide a systematic method of addressing
these risks, the SSS established and adopted an Enterprise Risk Management (ERM)
approach. ERM is a continuous, proactive and integrated process used to identify, assess
and manage risks across all areas and at all levels of the organization. This will ensure the
alignment of strategic planning and risk management.
Under ERM, SSS implements a risk management process that is carried out in five phases –
(1) strategic plan, (2) risk identification and analysis, (3) risk measurement, (4) risk control
and treatment and (5) risk monitoring and reporting. The process runs in a continuous cycle
to improve the management system by incorporating the lessons learned and feedback of
stakeholders. It is conducted across the entire organization throughout the year in all of its
day-to-day operations.
The SSS ERM has seven key components, as follows:
Seven Components of SSS’ ERM
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1. Corporate Governance – to ensure that the SSC and the Management have
established the appropriate organizational process and corporate controls to measure
and manage risk across the organization.
SSS has established a Risk Management Committee (RMC) responsible for the
adoption and oversight of risk management program of the System, in accordance
with the guidelines prescribed by the GCG. It also created the Risk Management
Division (RMD), under the Actuarial and Risk Management Group (ARMG), which is
responsible for ensuring that risk policies are in place among SSS units.
2. Line Management – to integrate risk management into the investment as well as

operational activities of the organization.
RMD conducts series of meetings and workshops to explain the concept of risk and
describe the risk management process – ISO 9001:2015 Seminar/Workshop on Risk-
based Thinking for all SSS Employees.
3. Portfolio Management – to aggregate risk exposures, incorporate diversification

effects, and monitor risk concentrations against established risk limits.
RMD together with the Investments Sector (IS) implements certain limits for SSS
investments. These are debt and equity limits, Value-at-Risk (VaR) limits, Market-to-
Acquisition Ratio (MAR) limits, banking sector limits, real property and real estate
related investments limits and other industry limits. Also, IS units have established
their internal limits for each SSS investment asset (e.g., limit per broker, trading limit
per day, allocation for each asset, limit per trader, etc.).
4. Risk Transfer – to mitigate risk exposures that are deemed too high or are more cost-
effective to transfer out to a third party than to hold in the organization’s risk portfolio.
SSS transfers risks through acquisition of insurances to mitigate risk exposures that
are deemed too high, which is consequently more cost-effective than to hold in the
System’s risk portfolio. Insurance policies acquired by SSS include fire insurance for
SSS properties, Directors’ and Officers’ Liability Insurance (DOLI) for SSC and the
Management and Credit Group Life Insurance (CGLI) for SSS pensioners who availed
of the Pension Loan Program.
5. Risk Analytics – to provide risk measurement, analysis and reporting tools to quantify
the organization’s risk exposures as well as track external drivers.
SSS monitors various risk metrics using risk management tools that are developed for
the analysis and assessment of risks, which help in the formulation of appropriate
mitigating measures. Examples of risk management tools are VAR, MAR, Stop Loss/
Cut Loss, etc.
6. Data and Technology Resources – to support the analytics and reporting processes.
Currently, RMD manually encodes in its internal database and processes through
aggregation various risk-related data from different SSS units using Macro-embedded
75
program in MS Excel. Risk metrics are programmed in MS Excel to generate risk
reports.
7. Stakeholder Management – to communicate and report the organization’s risk

information to key stakeholders.
RMD, as part of its risk reporting function, presents identified risks, both existing and
emerging, and corresponding action plans during Management Review meetings. A
document regarding how SSS manages its risks is published on the SSS website
under the Transparency Seal.
The SSS’ RMD developed four risk manuals – Financial Risk Management Manual,
Insurance and Demographic Risk Management Manual, Strategic Risk Management
Manual and Operational Risk Management Manual – that provide a common and
systematic approach for managing risks. Each manual contains all risk management
tools, policies and procedures that were approved by the SSC and proposed by the
RMD. The risk management tools, policies and procedures currently utilized by SSS to
manage the four principal risk categories, are discussed below.
36.1 Financial Risks
Financial Risks refers to the potential losses due to changes in external markets,
prices, rates and liquidity supply and demand.
The SSC and Management are active in the evaluation, scrutiny and credit approval
process on all investments being undertaken by the SSS. The SSC has adopted
adequate policies on investment procedures, risk assessment and measurement and
risk monitoring by strict observance on the statutory limit provided under the SS Act of
2018 and compliance to the investment guidelines. Internal controls are also in place
and a comprehensive audit is being done by Internal Audit Services.
1. Market Risk
Market Risk is the risk of SSS investments declining in value because of

economic developments or other events that affect the entire market. This risk
arises from (i) fluctuations in market prices of equities due to changes in demand
and supply for the securities (Equity Price Risk), (ii) changes in SSS’ investment
value due to a change in the absolute level of interest rates, in the spread
between two rates, in the shape of the yield curve or in any other interest rate
relationship (Interest Rate Risk) and (iii) fluctuations in exchanges rates due to
changes in global and local economic conditions and political developments that
affect the value of SSS’ foreign-denominated investments (Foreign Currency
Risk).
SSS strictly adheres to the provisions of Section 26 of the SS Act of 2018, which
states that the funds invested in equities, corporate notes/bonds, loans, mutual
funds and other financial instruments shall earn an annual income not less than
the average rates of treasury bills or any acceptable market yield indicator. Also,
SSS developed risk management tools to monitor and mitigate market risks, these
are:
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a. Value-at-Risk (VaR) – a risk management tool used to measure the equity
portfolio’s maximum loss under normal market movements for a specified
time interval and at a given confidence level. Alternatively, it measures the
minimum loss of a portfolio under extreme market movements. Daily VaR
estimates are monitored daily and compared to their limits.
The VaR limit is designed to restrict potential loss to an amount tolerable by

the Management, given the daily investment exposure on a trading portfolio.
It is a general limit that incorporates a wide array of risks but encapsulates the
quantification of these risks to a single number.
b. Market-to-Acquisition Ratio (MAR) – a risk indicator that measures the

percentage of the asset or portfolio’s daily market value relative to its
acquisition cost. The MAR values range from zero to positive infinity. MAR
values lower than 100 per cent indicate unrealized losses while values
greater than 100 per cent indicate unrealized gains.
The daily MAR values were translated into colors to indicate the magnitude of
risks on the portfolio. These MAR values are visually represented using a
MAR Heat Map.
c. Stop Loss /Cut Loss Program – a disciplined/programmed divestment of

losing stocks triggered by certain conditions (e.g., technical analysis / optimal
portfolio recommendations, dividend yield etc.) until all subject shares have
been fully divested for the primary purpose of limiting losses to the equity
portfolio.
2. Credit Risk
Credit risk refers to the risk of an economic loss from the failure of counterparty to
fulfill its contractual obligations or from the increased risk of default during the
term of the transaction. This includes risk due to (i) SSS debtor’s incapacity or
refusal to meet debt obligations, whether interest or principal payments on the
loan contracted, when due (Default Risk); (ii) taking over the collateralized or
escrowed assets of a defaulted SSS borrower or counterparty (Bankruptcy Risk);
(iii) potential for a loss in value of an SSS investment portfolio when an individual
or group of exposures move together in an unfavorable direction (Concentration
Risk); (iv) deterioration of perceived credit creditworthiness of the borrower or
counterparty (Downgrade Risk) and (v) failure of a counterparty to deliver a
security or its value in cash when the security was traded after SSS have already
delivered security or cash value, as per the trade agreement (Settlement Risk).
77
SSS implements structures and standardized evaluation guidelines, credit ratings
and approval processes. Investments undergo technical evaluation to determine
their viability/acceptability. Due diligence process (credit analysis, evaluation of
the financial performance of the issuer/borrower to determine financial capability
to pay obligations when due, etc.) and information from third party are used to
determine if counterparties are creditworthy.
To avoid significant concentrations of exposures to specific industries or group of

issuers and borrowers, SSS investments are regularly monitored against
prescribed cumulative ceilings specified in Section 26 of SS Law.
The following table shows the maximum credit risk exposure and aging analysis of
the SSS financial assets with past due as at December 31, 2021 and 2020.
2021
Past due but not impaired (Age in months)
Neither
past due Over
1-12 13-36 37-48 49-60 Expired Impaired Total
nor 60
impaired
(In Million Pesos)
Financial assets at FVTPL 60,233 60,233
Financial assets at FVTOCI 142,782 142,782
Financial assets at amortized
cost
Corporate notes and bonds 25,717 40 25,757
Government notes and bonds 219,470 219,470
Loans and receivables:
NHMFC 6,379 3,187 9,566
PGC 400 100 1,100 1,600
Housing loans 227 31 7 7 3 43 340 754 1,412
Member loans 26,148 31,965 16,703 5,873 22,145 9,461 112,295
Pension loans 3,523 7 3,530
Sales contract receivable 986 7 18 12 9 19 45 116 1,212
Rental receivable 91 3 175 269
Commercial and industrial
5 64 69
loans
Program MADE 17 17
479,577 32,106 17,828 19 5,885 22,207 6,769 13,821 578,212
2020
Neither
past due Over
nor 60
impaired
(In Million Pesos)
cost
Corporate notes and bonds
Government notes and bonds 31,363 110 31,473
Loans and receivables: 170,967 170,967
NHMFC 6,357 3,329 9,686
PGC 500 1,100 1,600
Housing loans 258 62 18 21 90 301 811 1,561
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2020
Neither
past due Over
nor 60
impaired
(In Million Pesos)
Member loans 37,512 26,308 17,182 7,897 21,334 7,940 118,173
Rental receivable 23 163 186
5 64 69
loans
Program MADE 17 17
417,447 27,496 17,208 25 7,900 21,435 6,684 12,840 511,035
To further ensure compliance with Section 26 of SS Act of 2018, Policies and

Guidelines in Determining and Managing Exposure Limits to Debt and Equity
were established. The investment limits for Conglomerate/Group, Individual
Corporation, Individual Corporation’s Debt and Individual Corporation’s Equity are
determined based on two principles: Investment Reserve Fund (IRF) forecast-
based principle and risk-based principle.
For the IRF forecast-based principle, the following are the limit ceilings as portion
of IRF forecast, where the IRF forecast is computed from the previous year’s IRF
plus 90 per cent of the current year’s target net revenue:
10% for Conglomerate/Group

4% for Individual Corporation
3% for Individual Corporation’s Debt
3% for Individual Corporation’s Equity
The risk-based principle for computing investment limits is based on the

company’s value and its credit score.
Individual Corporation
Factors
Debt Equity
Corporation’s Value Three times the Unimpaired 10% of the Market Value of
Capital of the Corporation Total Issued and Outstanding
Shares of the Corporation
Risk Measure Merton Distance-to-Default Altman Z-Score
With respect to stockbrokers, the SSS has adopted the following mitigating
measures:
a. Minimum requirements for stockbroker evaluation
a.1. Stockbroker must be registered with the Securities and Exchange

Commission (SEC) and a member of good standing of the Philippine
Stock Exchange (PSE) as defined under Section 28 of the Securities
Regulation Code (SRC).
79
a.2. The stockbroker must belong to the top thirty (30) in terms of cumulative
value of transactions during the past three years and the latest available
PSE data for the current year will be considered. Provided, however,
that the number of accredited stockbrokers shall not exceed thirty-five
(35).
a.3. The stockbroker must be in operation for at least five years and must be
profitable for three years in these five years of operation. Provided that
the stockbroker must be profitable for at least one year in the last two
years prior to the application for accreditation.
a.4. The stockbroker must have a minimum unimpaired paid-up capital of

one hundred million pesos (P100 million), or the minimum capitalization
required by the SEC, whichever is higher.
a.5. The stockbroker shall have a positive track record of service from at
least three institutional clients.
a.6. The stockbroker’s management team and personnel must be duly

licensed by the PSE, SEC, Philippine Depository & Trust Corporation
and other relevant regulatory agencies.
b. Stockbroker transactions, allocations and limits
b.1. Total daily transactions, excluding block transactions, per stockbroker

shall not exceed 50 per cent of the stockholder’s equity of stockbrokers.
(Limit settlement risk)
b.2. Total transactions, excluding negotiated block transactions, for each of

the accredited stockbrokers, during the accreditation period, shall not
exceed the higher between one over the number of active accredited
stockbrokers × 100 per cent and 15 per cent of total SSS transactions.
b.3. The initial recommendation for allocation of transactions shall be

determined based on the results of evaluation for stockbroker
accreditation. Subsequent recommendations for allocation shall be
based on the monthly performance ratings.
b.4. Transactions, excluding negotiated block transactions, with the SSS by

the stockbroker within the year of accreditation, shall not exceed 40 per
cent of its total market transactions. This ensures that SSS is not its
only client.
3. Liquidity Risk
Liquidity risk refers to the risk that a company may be unable to meet short-term
financial demands. This usually occurs due to the inability to convert a security or
hard asset to cash without a loss of capital and/or income in the process. This risk
also refers to (i) unanticipated changes in liquidity supply and demand that may
affect SSS through untimely sale of assets, inability to meet contractual
obligations or default (Funding Liquidity Risk) and (ii) the possibility that an
institution will not be able to execute a transaction at the prevailing market price
80
because there is temporarily no appetite for the deal on the other side of the
market (Trading Liquidity Risk).
SSS manages this risk through daily monitoring of cash flows in consideration of
future payment due dates and daily collection amounts. The SSS also maintains a
sufficient portfolio of highly marketable assets that can easily be liquidated as
protection against unforeseen interruption of cash flow.
To ensure that investments in Marketable Securities shall be compliant with the

basic principles of safety, liquidity and yield and shall benefit as many members
as possible of the System, SSS only invests in shares of stock and equity-related
issues that satisfy its stock accreditation guidelines.
Also, the RMD developed a Risk Dashboard to provide the Management with a
bird’s-eye view of the financial risks that SSS is facing. This dashboard will help
the Management in identifying the issues that may arise from the cumulative
impact of risks over time. It consists of risk reports like VaR, MAR Heat Maps,
Ageing Reports, and Limit Monitoring, which are presented in tabular and
graphical form. RMD also conducts validation, back testing and stress testing on
risk models used by the Investments Sector to ensure effectiveness and reliability
of models.
4. Reinvestment Risk
This is the risk that an investor will be unable to reinvest cash flows (e.g., coupon
payments) at a rate comparable to the current investment’s rate of return. The
term also sometimes refers to the risk that principal repayments on such security
may be paid prior to maturity, thereby forcing the asset manager to seek
reinvestment of principal at a time when interest rates may be lower than the rate
that was payable on the security.
5. Asset-Liability Mismatch Risk
This is the risk of a change in value from a deviation between asset and liability
cash flows, prices or carrying amounts, caused by a change in actual cash flow,
change in expectations on future cash flows and accounting inconsistencies.
6. Inflation Risk
This is the risk of a loss in purchasing power because the value of the
investments does not keep up with inflation.
7. Systemic Risk
This is the risk of potential failure of one institution to create a chain reaction or
domino effect on other institutions and consequently threaten the stability of
financial markets and even the global economy.
81
36.2 Insurance and Demographic Risks
Insurance and demographic risks refer to the potential loss arising from variation in
pension fund, claim experience and exposure to adverse persistency, and uncertainty
in demographic assumptions when the benefits were designed and valued. This risk
also refers to the following:
1. Longevity Risk
The risk that SSS pensioners live longer than expected leading to higher expected
payouts.
2. Mortality Risk
The risk due to changes in actual mortality rates that adversely differ from
assumptions.
3. Morbidity Risk
The risk due to deviations of actual mortality rates that adversely differ from
assumptions.
4. Claims Inflation
The risk is due to an increase in the total amount of claims over time.
SSS manages these risks through regular conduct of actuarial valuation/studies and
monitoring of experiences. There are also mitigating measures to control SSS
members’ anti-selection practices, such as when a person who has better information
on products and/or services selectively uses it to gain personal advantage at the
expense of the provider or another party. For example, SSS only allows self-employed
members and voluntary members, including Overseas Filipino Workers (OFWs) aged
55 years old and above, to increase their monthly salary credit (MSC) brackets once in
a given year but only one salary bracket from the last posted MSC. This is to control
the practice of abruptly increasing one’s monthly salary credit near retirement to
increase expected pension.
36.3 Strategic Risks
Strategic risk arises from unanticipated changes in key elements of strategy

formulation and/or execution leading to actual strategic outcomes that adversely differ
from expectations. This risk also refers to the following:
1. Governance Risk
This risk arises from government not functioning as expected.
2. Political Risk
This is the risk of loss in investment returns due to political changes or instability.
82
3. Strategic Relationship Risk
This is due to unexpected changes in strategic relationships such as joint

ventures/partnerships.
4. External Relations Risk
This risk is due to unanticipated changes in relationships with external

stakeholders such as the public, media, regulators, rating agencies and
politicians.
5. Legislative and Regulatory Risk
This risk is due to changes in laws/government regulations.
6. Economic Risk
This risk arises from unanticipated changes in the economy such as changes in
consumer disposable income affecting the ability to pay contributions or loan
balances.
7. Strategic Asset Allocation Risk
This is the risk that the strategic asset allocation is not expected to deliver a
particular agreed target return, i.e., the target returns and how the assets are
invested to deliver this return are not in sync.
SSS manages these risks by creating harmonious relationships with various

stakeholders, monitoring new and pending bills, and conducting regular economic
research/studies to craft appropriate policies beneficial to the System and its
members. Also, SSS implemented the No Gift Policy, No Noon Break Policy, Anti-
Fixer Campaign and No Smoking Campaign which will enhance its image as a
government institution.
36.4 Operational Risks
Operational risk refers to potential loss, whether direct or indirect, due to ineffective
and inefficient internal processes, human resource failures, system failure or external
events. This risk includes the following:
1. Internal Fraud Risk
These are potential losses due to acts intended to defraud, misappropriate

property or circumvent regulations, the law or company policy, excluding
diversity/discrimination events, which involves at least one internal party.
2. External Fraud Risk

property or circumvent the law, by a third party.
83
3. Employment Practices and Workplace Safety Risk
These are potential losses arising from acts inconsistent with employment, health
or safety laws or agreements from payment of personal injury claims or from
diversity/discrimination events.
4. Clients, Products and Business Practices Risk
These are potential losses arising from unintentional or negligent failure to meet a
professional obligation to specific clients (including fiduciary and suitability
requirements), or from the nature or design of a product or service.
5. Damage to Physical Asset Risk
These are potential losses arising from loss or damage to physical assets from
natural disasters or other events.
6. Business Disruption and System Failure Risk
These are potential losses arising from the disruption of business or system
failures due to unavailability of infrastructure or IT.
7. Execution, Delivery and Process Management Risk
These are potential losses from failed transaction processing or process

management, from relations with trade counterparties and vendors.
SSS monitors these risks by conducting regular Risk and Control Self-Assessment
(RCSA) throughout the System. RCSA provides insights on risks in each SSS unit,
existing and/or emerging. Identified operational risks through RCSA are consolidated
in a risk report, which is presented in Risk Management and Investment Committee
(RMIC) meetings. Actual risk incidences are reported as well.
Through RCSA, SSS units become more aware of the risks present in their day-to-day
operations. As such, they are able to identify gaps and ineffective controls and come
up with sensible action plans to minimize possible loss and damage. The progress of
the action plans is periodically monitored and reported.
Below are some of the risk management tools used to address operational risks:
a. Privacy Impact Assessment – SSS conducts Privacy Impact Assessment (PIA) to

evaluate privacy impacts in all processing systems – existing, new and
enhancements. The PIA takes into account the nature of personal data to be
protected, threshold analysis, personal data flow, stakeholder engagement and
risks to privacy and security in each processing system.
b. Directors’ and Officers’ Liability Insurance – SSS has been providing its
Commissioners and Executives with an indemnity coverage to afford SSS, SSC
and its Management the means to pursue their fiduciary duties and obligations to
84
always act in the best interest of the System, with utmost good faith in all their
dealings with the property and monies of SSS.
c. Personal Equity Investment Policy – SSS promotes high standards of integrity and
professional excellence among its officers and employees in the investment of the
Reserve Funds as provided under its Charter through regular monitoring and
regulating the official and personal transactions and activities related to equity
investments of concerned SSS officers and employees and the establishment of a
disclosure mechanism for their personal equity investments.
d. Business Continuity Management Plan – Currently, the SSS trains its employees
to be prepared against natural and manmade calamities through regular conduct
of disaster preparedness programs, e.g. fire drill, earthquake drill, back-up and
recovery of systems. For long-term preparation, the SSS has created a Disaster
Control Group that is responsible for planning strategies and mechanisms to
provide continuous delivery of services to the public amidst any disruption in
operations caused by disasters. Also, SSS has created a Technical Working
Group to develop a comprehensive Business Continuity Management Program for
SSS to ensure continuity of critical member services, swift return to normal
operations and reduce possible loss on the onset of a disruption.
37. EVENTS AFTER THE REPORTING PERIOD
The Compensation and Position Classification System (CPCS) for GOCCs Implementing
Guidelines No. 2021-01 dated January 12, 2022 was issued in pursuant to EO No. 150,
series of 2021, which was approved by the President of the Philippines on October 1, 2021.
The projected increase in salaries/benefits including mandatory deductions to all qualified
regular and casual employees in the total amount of P1.06 billion was accrued in the
reporting period.
The approval of the following policies and guidelines after the reporting period are
considered non-adjusting events, hence disclosed accordingly.
• On January 12, 2022, the SSC under Resolution No. 10-s. 2022 approved the
implementation of one-time sixty (60)-day refund of monthly pension loan payments
under the SSS Pension Loan Program. The mandatory one-time 60-day grace
period shall apply only to loans that are existing, current and outstanding upon
effectivity of the Bayanihan Act, which is September 15, 2020.
• The SSS, in pursuit of its mission under Republic Act No. 11199, otherwise known as
the Social Security Act of 2018, to promote social justice through savings and
advance the value of “work, save, invest and prosper”, proposes to establish a New
Voluntary Provident Fund (NVPF) Program. The program aims to encourage SSS
members to participate in an affordable, flexible, convenient and tax-free savings
scheme. Implementation date is expected in the second quarter of 2022.
• On January 26, 2022, the SSC under Resolution No. 50-s.2022 approved the
extension of the deadline of remittance of contributions by employers (Business and
Household Coverage and Collection Partners (CCPs) and Individual Members (self-
employed, land-based overseas Filipino workers, voluntary members and non-
85
working spouses) in view of the Proclamation No. 1267 dated December 21, 2021,
declaring a State of Calamity in Regions IV-B (MIMAROPA), VI (Western Visayas),
VII (Central Visayas), VIII (Eastern Visayas), X (Northern Mindanao), and XIII
(CARAGA) due to Typhoon Odette.
Type of Payor Deadline of Remittance

Employers (including Household Contributions for the applicable months of
Employers) November 2021 and December 2021 may be
paid on or before February 28, 2022
CCPs, Self-employed, Land- Contributions for the applicable months of

based OFW, Voluntary members October, November and December 2021 or
and Non-working spouses the fourth quarter of the Year 2021 may be
• Pursuant to the provision of existing laws, Michael Gonzales Regino was appointed
as the new President and Chief Executive Officer of the Social Security System, vice
Aurora C. Ignacio, by President Rodrigo R. Duterte with appointment letter dated
March 4, 2022 from the Office of the President of the Philippines, Malacañang. The
Oath of Office was held on March 9, 2022.
• On January 31, 2022, SSS through the Office of the Solicitor General (OSG) filed
Motion for Reconsideration (MR) to the Supreme Court (SC) First Division, seeking
to reverse and set aside the Decision dated July 6, 2021 issued by the SC docketed
as G.R. No. 249337 entitled Waterfront Philippines Inc. (WPI), Wellex Industries Inc,
(WII) and Wellex Group Inc. (WGI) vs Social Security System. A copy of decision of
the SC First Division was received by SSS on January 5, 2022, the dispositive
portion of which, reads:
WHEREFORE, premises considered, the petition is GRANTED. The August
30, 2019 Decision of the Court of Appeals in CA-G. R. CV No. 104941 is
REVERSED and SET ASIDE. In lieu thereof, a new one is ENTERED
decreeing as follows:
The October 28, 1999 Contract of Loan with Real Estate Mortgage with
Option to Convert to Shares of Stock, and all accessory contracts
appurtenant thereto are DECLARED null and void;
The Certificate of Sale dated September 9, 2003 is DECLARED null

and void; The parties are hereby ordered, in mutual restitution, to return
what has been received under the Contract of Loan with Real Estate
Mortgage and Option to Convert to Shares of Stock, together with any
income, fruits or dividends therefrom, as follows:
1. Waterfront Philippines, Inc. is ORDERED to PAY Social Security

System P375,000,000.00 subject to twelve percent (12%) legal interest
from October 28, 1999 to June 30, 2013, and six percent (6%) legal
interest from July 1, 2013 until full payment;
2. Social Security System is ORDERED to:
86
a. RETURN to Waterfront Philippines, Inc. the amount of
P35,827,695.87, subject to a legal interest of twelve percent (12%) from
the dates that the individual payments were remitted until June 30,2013,
and six percent (6%) legal interest from July1, 2013 until full payment;
b. RECONVEY to Wellex Industries, Inc. the properties covered by

Transfer Certificate of Title Nos. N-153395 and N-153396, with all the
income derived from said properties;
c. RETURN to Wellex Industries, Inc. the original copies of Transfer

Certificate of Title Nos. N-153395 and N-153396;
d. RETURN to Wellex Group, Inc. the stock certificates representing

235,000,000 shares of Waterfront Philippines, Inc. with the fruits and
dividends received therefrom;
e. RETURN to Wellex Industries, Inc. the stock certificates

representing the 80,000,000 shares of WII with the fruits and dividends
therefrom;
f. Any income earned from the properties covered by Transfer

Certificate of Title Nos. N-153395 and N-153396, and any dividends
received from the stock certificates, must be returned with legal interest
of twelve percent (12%) from October 28, 1999 to June 2013, and six
percent (6%) legal interest from July 1, 2013 until full payment.
38. OTHER MATTERS
Commitments
Amount authorized but not yet disbursed for capital expenditures as at December 31, 2021
is approximately P1.107 billion.
39. COMPLIANCE WITH TAX LAWS
Presented under the following table is the supplementary information which is required by
the Bureau of Internal Revenue under Revenue Regulations No. 15-2010 to be disclosed as
part of the notes to financial statements. This supplementary information is not a required
disclosure under PFRS.
The SSS is withholding and remitting to the BIR applicable taxes withheld imposed under
the National Internal Revenue Code and its implementing rules and regulations. Income
taxes withheld on compensation and expanded withholding tax are remitted on or before the
15th day of the following month except those withheld for the month of December which are
remitted on or before the 20th day of January of the following year. Value-added taxes and
final income taxes withheld are remitted on or before the 10th day of the following month.
87
Amount
Taxes paid as at December 2021
On compensation 333,232,328
Expanded 39,616,003
VAT and other percentage tax 59,827,230
Final tax 1,174,724
Output tax (VAT) 105,227,695
Taxes withheld as of December 2021 and remitted in Jan 2022

Expanded 10,714,170
Final tax 287,533
593,359,952
The SSS is exempted from all kinds of taxes pursuant to Section 16 of RA No. 11199 which
states that
“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
but 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.”
Under Section 86 item q. of RA No. 10963, otherwise known as the “Tax Reform for
Acceleration and Inclusion” (TRAIN) Law, effective January 1, 2018, SSS exemption on VAT
has been repealed.
40. STATUS OF LAWSUITS
The SSS is involved as a party in several legal proceedings pending resolution that could
materially affect its financial position. Among these lawsuits are the following:
88
Description Amount Status
Expropriation case filed by the 1.461 billion Awaiting Order from Regional Trial
National Grid Corporation of Court (RTC) on the NGCP’s Motion to
the Philippines (NGCP) on Withdraw Complaint and Provisional
60,872 square meters portion Deposit.
of SSS property at Pasay City
(Site 2 FCA 7)
Civil case for Sum of Money 1.151 billion A motion for reconsideration was filed
with Damages filed against on January 31, 2022 on the Supreme
Waterfront Philippines, Inc. Court Decision dated July 6, 2021,
(WPI) which was received by SSS on January
5, 2022 (see Note 25).
Quieting of title filed by 83.586 million DDII to execute the Deed of Sale over
Desiderio Dalisay Investment, the properties in favor of SSS and
Inc. (DDII) – “Dacion en Pago” surrender the Owner’s Duplicate of
(Cabaguio Ave. cor. Del Pilar Transfer Certificate of Title (TCT) Nos.
Street, Brgy. Agdao Proper, T-18203, T-18204, T-255986 and T-
Agdao, Davao City) 255985, as well as the Tax declarations
over the said properties.
SSS to re-compute petitioner’s

obligations, accordingly, reckoned from
June 17, 1982, the date when
respondent communicated its
acceptance of the offer.
SSS Davao was requested to inquire

from the RTC of Davao City, Branch 14,
whether the records of the case have
already been remanded by the SC.
This is preparatory for OSG/SSS to file
Motion for Execution of Judgment.
Civil case for Sum of Money 84.515 million Pending with RTC – Branch 61, Makati
filed by Pryce Corporation on City.
One Time Maintenance
Adjustment Charge (MAC) on Discussion for settlement in on-going.
SSS owned memorial lots
89
NOTES TO FINANCIAL STATEMENTS
(Amounts in Philippine Peso)
1. GENERAL INFORMATION
The Social Security System (SSS) is an independent and accountable government-owned

and controlled corporation that administers social security protection to Filipino workers,
local and overseas and their beneficiaries. Social security provides replacement income for
workers in times of death, disability, sickness, maternity, old age, unemployment or
involuntary separation and other contingencies.
On September 1, 1957, Republic Act (RA) No. 1161 or the “Social Security Act of 1954” was
implemented. Thereafter, the coverage and benefits given by SSS have been expanded and
enhanced through the enactment of various laws. On May 1, 1997, RA No. 8282, otherwise
known as the “Social Security Act of 1997”, was enacted to further strengthen the SSS.
Under this Act, the government accepts general responsibility for the solvency of the SSS
and guarantees that prescribed benefits shall not be diminished. Section 16 of RA No. 1161,
as amended by RA No. 8282, exempts the SSS and all its benefit payments from all kinds of
taxes, fees or charges, customs or import duty.
On February 7, 2019, RA No. 11199 or the “Social Security Act of 2018”, was enacted to
rationalize and expand the powers and duties of the Social Security Commission (SSC) to
ensure the long-term viability of the Social Security System, repealing for the purpose RA
No. 1161, as amended by RA No. 8282, otherwise known as the Social Security Act of
1997. Among the landmark provisions of the RA No. 11199 are the grant of unemployment
or involuntary separation benefits for the first time in the country, the mandatory coverage of
Overseas Filipino Workers (OFWs), the establishment of a Provident Fund exclusive to SSS
members, the condonation of penalties on delinquent contributions, and the legislated
adjustments in membership premium and monthly salary credits. In pursuit of its policy, a
social security program shall be developed emphasizing the value of “work, save, invest and
prosper” for a more responsive SSS. The maximum profitability of investible funds and
resources of the program shall be ensured through a culture of excellence in management
grounded upon sound and efficient policies employing internationally recognized best
practices.
Pursuant to Sections 9 to 11 of RA No. 11199, coverage in the SSS shall be compulsory

upon all private employees including domestic workers not over 60 years of age and their
employers, self-employed persons, regardless of trade, business or occupation and sea-
based and land-based OFWs. 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, while
coverage of self-employed person shall take effect upon his registration with the SSS. Non-
working spouses of SSS members and Filipino permanent migrants, including Filipino
immigrants, permanent residents and naturalized citizens of their host countries may be
covered by the SSS on a voluntary basis. Likewise, SSS members separated from
employment including OFWs may continue to pay contributions on a voluntary basis to
maintain their rights to full benefits.
Under Section 26-B of RA No. 11199, the SSS as part of its investment operations, acts as
Certified true copy: insurer of all or part of its interest on SSS properties mortgaged to the SSS, or lives of
JEAN
JEANV. V.LAGRADA
LAGRADA 9
Vice
VicePresident
President
Financial and
Financial and Budget
BudgetDivision
Division
mortgagors whose properties are mortgaged to the SSS. For this purpose, a separate
account known as the “Mortgagors’ Insurance Account” was established wherein all
amounts received by the SSS in connection with the aforesaid insurance operations are
placed.
Under Section 4 of RA No. 11199, a Provident Fund for the members which will consist of
contributions of employers and employees, self-employed, OFW and voluntary members
shall be established based on (i) the SSS contribution rate in excess of 12 per cent, or (ii)
monthly salary credit in excess of P20,000.00 up to the prescribed maximum monthly salary
credit and their earnings, for the payment of benefits to such members or their beneficiaries
in addition to the benefits provided for under this Act. A member may contribute voluntarily
in excess of the prescribed SSS contribution rate and/or the maximum monthly salary credit,
subject to such rules and regulations as the SSC may promulgate. The rate of contributions
as well as the minimum and maximum monthly salary credits shall be in accordance with the
schedule defined under Section 4.a.9 of the law. The rate of penalty on unpaid loan
amortizations shall be determined and fixed by the SSC from time to time through rules and
regulations based on applicable actuarial studies, rate of benefits, inflation, and other
relevant socioeconomic data.
Under Section 4 of RA No. 8282, voluntary provident funds known as the Flexi-Fund and the
Personal Equity and Savings Option (PESO) Fund were established and approved in
September 2001 and June 2011, respectively. Membership to the Flexi-Fund is on a
voluntary basis for OFW members with at least P16,000 monthly earnings either covered
under the existing program or new entrant with the requirement of initial contributions to the
SSS program. The PESO Fund is offered exclusively to SSS members in addition to the
regular SSS Program. It aims to provide SSS members with the opportunity to receive
additional benefits in their capacity to contribute more. Each member of the PESO Fund
shall be allowed a maximum contribution of P500,000 per annum and a minimum of P1,000
per contribution. These two funds shall cease upon implementation of the new provident
fund provided under Section 4 of RA No. 11199.
The SSS also administers Employees’ Compensation and State Insurance Fund as
provided in Presidential Decree (PD) No. 626, as amended. The Employees’ Compensation
Commission (ECC), a government corporation, is attached to the Department of Labor and
Employment for policy coordination and guidance. It was created on November 1, 1974, by
virtue of PD No. 442 or the Labor Code of the Philippines. It, however, became fully
operational with the issuance of PD No. 626 which took effect on January 1, 1975.
The ECC is a quasi-judicial corporate entity created to implement the Employees’

Compensation Program (ECP). The ECP provides a package of benefits for public and
private sector employees and their dependents in the event of work-connected
contingencies such as sickness, injury, disability or death.
The State Insurance Fund (SIF) was established to provide funding support to the ECP. It is
generated from the employers’ contributions collected by both the Government Service
Insurance System (GSIS) and SSS from public and private sector employers, respectively.
Coverage in the SIF shall be compulsory upon all employers and their employees not over
60 years of age, provided, that an employee who is over 60 years of age and paying
contributions to qualify for the retirement of life insurance benefit administered by the
System shall be subject to compulsory coverage. On March 6, 2019, the ECC in its Board
10
Resolution No. 19-03-05 approved the policy on expanding the coverage of the ECP to the
self-employed compulsory members of the SSS.
The summary of the financial performance and result of operations of the funds as at
December 31, 2021, are as follows. All inter-fund accounts have been eliminated.
SSS* EC-SIF Total
Total Assets 657,486,431,459 44,915,702,084 702,402,133,543
Liabilities 7,600,981,378,159 38,289,127,376 7,639,270,505,535

Reserve Fund**/Equity (6,943,494,946,700) 6,626,574,708 (6,936,868,371,992)
Total Liabilities and Equity 657,486,431,459 44,915,702,084 702,402,133,543
**Includes Insurance Contract Liability (ICL)
SSS* EC-SIF Total

Income 271,851,724,926 4,477,371,888 276,329,096,814
Expenses 245,252,009,532 2,631,399,893 247,883,409,425
Net change in policy reserves 857,207,463,317 15,152,036,740 872,359,500,057
Total expenses 1,102,459,472,849 17,783,436,633 1,120,242,909,482
Profit/(Loss) (830,607,747,923) (13,306,064,745) (843,913,812,668)
Other comprehensive income
for the year 15,782,259,272 1,182,307,483 16,964,566,755
Total comprehensive income (814,825,488,651) (12,123,757,262) (826,949,245,913)
*SSS includes Flexi-Fund, PESO Fund, Mortgagors’ Insurance Account and Mandatory Provident Fund
The principal office of SSS is located at East Avenue, Diliman, Quezon City. It has 167 local
branches and 115 service and representative offices located in various cities and
municipalities of the country, and 28 foreign branch offices situated in Asia and Pacific,
Europe, Middle East and North America.
The accompanying financial statements as at and for the year ended December 31, 2021
(including the comparative financial statements as at for the year ended December 31,
2021) were approved and authorized under SSC Resolution No. 203-s.2022.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies that have been used in the preparation of these financial
statements are summarized below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
a. Statement of Compliance with Philippine Financial Reporting Standards

(PFRS) and Commission on Audit (COA) Circular No. 2017-004
The accompanying financial statements were prepared in accordance with

PFRS and Philippine Accounting Standards (PAS) issued by the Philippine
Financial Reporting Standards Council (PFRSC). PFRS are adopted by the
PFRSC from the pronouncements issued by the International Accounting
11
Standard Board and approved by the Philippine Board of Accountancy. As a
Commercial Public Sector Entity (CPSE), SSS is required to adopt the PFRS
as its applicable financial reporting framework pursuant to COA Circular No.
2015-003 dated April 16, 2015, as amended.
b. Presentation of Financial Statements
The financial statements are presented in accordance with PAS 1,

Presentation of Financial Statements. The System presents all items of
income and expenses in a single Statement of Comprehensive Income (SCI).
For this purpose, SSS adopts the guidelines laid down under COA Circular
No. 2017-004 dated December 13, 2017, on the preparation of financial
statements and other financial reports and implementation of PFRS by
government corporations classified as CPSE, unless Management believes
that a different classification and presentation of the accounts provides
information that is reliable and more relevant to users of the financial
statements.
c. Basis of Measurement
The financial statements have been prepared on a historical cost basis,

except for the following items:
• Financial assets at fair value through profit or loss (FVTPL) are measured
at fair value;
• Financial assets at fair value through other comprehensive income
(FVTOCI) are measured at fair value;
• Investment properties are measured at fair value;
• Non-current assets held for sale are measured at the lower of carrying
amount or fair value less cost to sell; and
• Land under property and equipment are measured at revalued amount.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value of a non-financial asset is measured to its
highest and best use. The fair value of financial and non-financial liabilities
takes into account non-performance risk, which is the risk that the entity will
not fulfill an obligation.
The SSS classifies its fair value measurements using a fair value hierarchy
that reflects the significance of the inputs used in making the measurements.
The fair value hierarchy has the following levels:
• Level 1 – inputs are quoted prices (unadjusted) in active markets for

identical assets or liabilities that the entity can access at the
measurement date. FVTPL and FVTOCI investments fall under this level.
12
• Level 2 – inputs other than quoted market prices included within Level 1
that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices). This level includes the
majority of the over-the-counter derivative contracts.
• Level 3 – inputs for the asset or liability that are not based on observable
market data (unobservable inputs). This level includes investments and
debt instruments with significant unobservable components. This
hierarchy requires the use of observable market prices in its valuations
where possible. Investment properties and non-current assets held for
sale are within this level.
d. Accrual Accounting
In accordance with PAS 1, the financial statements, except for cash flow
information, have been prepared using the accrual basis of accounting.
e. Functional and Presentation Currency
The financial statements are presented in Philippine peso, which is the

System’s functional and presentation currency. All amounts are rounded to
the nearest peso, unless otherwise stated.
f. Estimates and Judgments
The preparation of the financial statements requires management to make

judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, revenue
and expenses. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustment to the
carrying amount of the affected asset or liability in the future.
Judgments, estimates, and assumptions are continually evaluated and are

based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
2.2 Adoption of New and Amended PFRS and Interpretations
a. Effective in 2021 that are relevant to the System
The accounting policies adopted are consistent with those of the previous
financial year, except for the adoption of the following new and amended
PFRS and Philippine Interpretations which the SSS adopted effective for
annual periods beginning on or after January 1, 2021:
• Amendments to PAS 37 – Provisions, contingent liabilities and contingent

assets specify which costs a company includes when assessing whether
a contract will be loss-making.
13
• Amendments to PFRS 9, Financial Instruments, PAS 39 Financial
Instrument. Recognition and Measurement and PFRS 7 Financial
Instruments Disclosures. PFRS 4, Insurance Contracts and PFRS 16,
Leases – Interest Rate Benchmark Reform-Phase 2. The amendments
relate to the modification of financial assets, financial liabilities and lease
liabilities, specific hedge accounting requirements and disclosure
requirements applying PFRS 7 to accompany the amendments regarding
modifications and hedge accounting.
• Amendments to PFRS 16, Leases – COVID-19 related rent concessions

extension of the practical expedient. On March 31, 2021, the IASB
published an additional amendment to extend the date of the practical
expedient from June 30, 2021 to June 30, 2022. Lessees can select to
account for such rent concessions in the same way as they would if they
were not lease modifications. In many cases, this will result in accounting
for the concessions as variable lease payments in the period(s) in which
the event or condition that triggers the reduced payment occurs.
b. New Accounting Standards, Interpretations and Amendments Effective

Subsequent to December 31, 2021
Issued but not yet effective are listed below. Unless otherwise stated, the
SSS does not expect that the future adoption of said pronouncements will
have a significant impact on its financial statements:
(i) Effective for annual period beginning on or after January 1, 2022
• Amendments to PFRS 3, Business Combinations update a reference

in PFRS 3 to the Conceptual Framework of Financial Reporting
without changing the accounting requirements for business
combinations.
• Amendments to PFRS 3, Reference to the Conceptual Framework.

The amendments update an outdated reference to the Conceptual
Framework in PFRS 3 without significantly changing the requirements
in the standard.
• Amendments to PAS 1, Presentation of Financial Statements, on

classification of liabilities – These narrow-scope amendments to PAS
1, Presentation of financial statements, clarify that liabilities are
classified as either current or non-current, depending on rights that
exist at the end of the reporting period. Classification is unaffected by
the expectations of the entity or events after the reporting date. The
amendment also clarifies what PAS 1 means when it refers to the
settlement of a liability.
• Amendments to PAS 16, Property, Plant and Equipment – Proceeds

before Intended Use. The amendments prohibit deducting from the
cost of an item of property, plant and equipment any proceeds from
selling items produced while bringing that asset to the location and
14
condition necessary for it to be capable of operating in the manner
intended by management. Instead, an entity recognizes the proceeds
from selling such items, and the cost of producing those items, in profit
or loss.
• Amendments to PAS 37, Onerous Contracts – Cost of Fulfilling a

Contract. The amendments specify that the cost of fulfilling a contract
comprises the costs that relate directly to the contract. Costs that
relate directly to a contract can either be incremental costs of fulfilling
that contract (examples would be direct labor, materials) or an
allocation of other costs that relate directly to fulfilling contracts (an
example would be the allocation of the depreciation charge for an item
of property, plant and equipment used in fulfilling the contract).
(ii) Annual Improvements PFRS Standards 2018-2020 (effective January 1,

2022)
• PFRS 1, First-time Adoption of PFRS – Subsidiary as a first-time

adopter. The amendment permits a subsidiary that applies paragraph
D16 (a) of PFRS 1 to measure cumulative transition differences using
the amounts reported by its parent, based on the parent’s date of
transition to PFRS.
• PFRS 9, Financial Instrument – Fees in the “10 per cent” test for
derecognition of financial liabilities. The amendment clarifies which
fees should be included in the “10 per cent” test for the derecognition
of a financial liability. An entity includes only fees paid to or received
between the entity (the borrower) and the lender, including fees
directly attributable to third-party fees.
• PFRS 16, Leases – Lease incentives. Any payments made to or on

behalf of a lessee within the context of the lease contract shall be
considered as an integral part of the net consideration of the lease and
therefore be accounted for as an incentive.
• Amendment to PFRS 16, Covid 19 Related Rent Concessions. The

amendment provides relief for leases in accounting for rent
concessions granted because of COVID 19. It therefore provides an
option to lessees from assessing whether a rent concession related to
COVID 19 is a lease modification or just a variable lease payment in
the period(s) in which the event or condition that triggers the reduced
payment occurs.
• Amendments to PFRS 7, Financial Instruments – Disclosures. It

requires entities to provide disclosures in the financial statements that
will enable users to evaluate the following:
o The significance of financial instruments for the entity’s financial

position and performance;
15
o The nature and extent of risks arising from financial instruments to
which the entity is exposed during the period and at the end of the
reporting period; and
o How the entity manages those risks.
(iii) Effective for annual period beginning on or after January 1, 2023

(globally); January 1, 2025 (local-Philippines)
• PFRS 17, Insurance Contracts – PFRS 17 is a comprehensive new

accounting standard for insurance contracts covering recognition and
measurement, presentation, and disclosure. Once effective, PFRS 17
will replace PFRS 4, Insurance Contracts, which currently permits a
wide variety of practices in accounting for insurance contracts. The
new standard applies to all types of insurance contracts (i.e., life, non-
life, direct insurance, and reinsurance), regardless of the type of
entities that issue them, as well as to certain guarantees and financial
instruments with discretionary participation features. A few exceptions
will apply.
The overall objective of PFRS 17 is to provide an accounting model for

insurance contracts that is more useful and consistent for insurers.
The code model of PFRS 17 is the general model, supplemented by
(a) a specific adaptation for contracts with direct participation features
(the variable fee approach) mainly for short-duration contracts. The
new standard requires insurance liabilities to be measured at a current
fulfillment value and provides a more uniform measurement and
presentation approach for all insurance contracts. These requirements
are designed to achieve the goal of a consistent, principle-based
accounting for insurance contracts.
• Amendments to PAS 1, Classification of Liabilities as Current or Non-

Current. The amendments aim to promote consistency in applying
requirements by helping companies determine whether, in the
statement of financial position, debt and other liabilities with an
uncertain settlement date should be classified as current (due or
potentially due to be settled within one year) or non-current.
• Amendments to PAS 1 and PFRS Practice Statement 2, Disclosure of

Accounting Policies. The amendments require that an entity discloses
its material accounting policies, instead of its significant accounting
policies. Further amendments explain how an entity can identify a
material accounting policy.
• Amendments to PAS 8, Definition of Accounting Estimates. The

amendments replace the definition of change in accounting estimates
with a definition of accounting estimates. Under the new definition,
accounting estimates are monetary amounts in financial statements
that are subject to measurement uncertainty. Entities develop
accounting estimates if accounting policies require items in financial
statements to be measured in a way that involves measurement
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uncertainty. The amendments clarify that a change in accounting
estimates that result from new information or new developments is not
the correction of error.
• Amendments to PAS 12, Deferred Tax related to Assets and Liabilities

arising from a Single Transaction. The amendments clarify that the
initial recognition exemption does not apply to transactions in which
equal amounts of deductible and taxable temporary differences arise
on initial recognition.
(iv) Effectivity deferred indefinitely
• PFRS 10 (Amendments), Consolidated Financial Statements and PAS

28 (Amendments), Investment in Associates and Joint Venture. The
amendments to PFRS 10 require full recognition in the investor’s
financial statements of gain or losses arising on the sale or
contribution of assets that constitute a business as defined in PFRS 3,
between an investor and its associate or joint venture. Corresponding
amendments have been made to PAS 28 to reflect these changes. In
addition, PAS 28 has been amended to clarify that when determining
whether assets that were sold or contributed to a business, an entity
shall consider whether the sale or contribution of those assets is part
of multiple arrangements that should be accounted for as a single
transaction.
2.2.1 Current versus non-current Classification
The SSS presents assets and liabilities in the statement of financial

position based on current/non-current classification. An asset is current
when it is:
• Expected to be realized or intended to be sold or consumed in the

normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realized within 12 months after the reporting period; or
• Cash and cash equivalents unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period.
All other assets are non-current.
A liability is current when:
• Expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;
• Due to be settled within 12 months after the reporting period.
• There is no unconditional right to defer the settlement of the liability for
12 months after the reporting period.
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All other liabilities are non-current.
Net deferred tax assets (liabilities) are classified as non-current.
2.3 Financial instruments
a. Financial assets
a.1 Date of recognition
The SSS initially recognizes loans and receivables and deposits on the date
that they are originated. All other financial assets are recognized initially on
the trade date at which the SSS becomes a party to the contractual
provisions of the instrument.
a.2 Initial recognition
The SSS initially recognizes a financial asset at fair value. Transaction costs
are included in the initial measurement, except for financial assets measured
at FVTPL.
a.3 Determination of fair value
The SSS determines fair value based on the nature of the financial assets
classified according to the intention of the management following the fair
value hierarchy of PFRS 13. This seeks to increase consistency and
comparability in fair value measurements and related disclosures. Based on
the hierarchy category which considers the inputs used in valuation
techniques into three levels. SSS financial assets fall under Levels 1 and 3
only.
a.4 Classification and subsequent measurement
The SSS classifies its financial assets as subsequently measured at FVTPL

or FVTOCI or at amortized cost based on the business model for managing
the financial assets and their contractual cash flow characteristics. The
business model determines whether cash flows will result from collecting the
contractual cash flows, selling the financial assets, or both.
• Financial assets at FVTPL
Financial assets at FVTPL consist of held-for-trading financial assets,

financial assets designated at FVTPL upon initial recognition, or financial
assets mandatorily required to be measured at fair value. Held-for-trading
financial assets are financial assets acquired or held for the purpose of
selling in the short term or for which there is a recent pattern of short-
term profit taking.
Upon initial recognition, attributable transaction costs are recognized in

profit or loss as incurred. Financial assets at FVTPL are measured at fair
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value as at reporting period and the corresponding unrealized gain or
losses on fair value changes are recognized in profit or loss.
SSS financial assets at FVTPL include investment in government

securities, equity securities, corporate bonds, externally managed fund
and investment in mutual fund.
• Financial assets at amortized cost
Financial assets are measured at amortized cost if both of the following

conditions are met: (1) the asset is held within the System’s business
model, the objective of which is to hold the assets in order to collect
contractual cash flows; and (2) the contractual terms of the instrument
give rise on specific dates to cash flows that are solely payments of
principals and interest (SPPI) on the principal amount outstanding.
After initial recognition, financial assets at amortized cost are

subsequently measured at amortized cost using the effective interest
method, less allowance for impairment, if any. Amortized cost is
calculated by taking into account any discount or premium on acquisition
that are an integral part of the effective interest rate.
Gains and losses are recognized in profit or loss when the financial
assets at amortized cost are derecognized or impaired, as well as
through the amortization process.
Loans and receivables are financial assets carried at cost or amortized

cost less impairment in value. Such assets are with fixed or determinable
payments that are not quoted in an active market.
Financial assets at amortized cost also include investments in

government bonds/notes, corporate bonds/notes and debenture bonds.
• Financial assets at FVTOCI
Financial assets are measured at FVTOCI if both of the following

conditions are met: (1) the asset is held within the business model, the
objective of which is achieved both by collecting contractual cash flows
and selling financial assets; and (2) the contractual terms of the
instrument give rise on specified dates to cash flows that are SPPI on the
principal amount outstanding. Subsequent to initial recognition, FVTOCI
financial assets are carried at fair value in the statement of financial
position. Changes in the fair value of such assets are recognized in other
comprehensive income and presented within reserves in the unrealized
gain or loss on FVTOCI financial assets portion. When equity instruments
measured at FVTOCI is derecognized, the cumulative gains or losses are
not recognized to profit or loss, instead, it will remain part of the
statement of comprehensive income. Dividends on FVTOCI equity
instruments are recognized in profit or loss when the right to receive
payments is established.
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SSS financial assets at FVTOCI consist of investments in equity
securities, government and corporate notes and bonds.
a.5 Impairment of financial assets
The SSC in its Resolution No. 41-s.2021 approved the policy/guidelines in

recognizing and measuring credit impairment. The SSS adopts the Expected
Credit Loss (ECL) in accordance with the provisions of PFRS 9 Financial
Instruments – Impairment.
The ECL Model is applied on credit exposures covered by PFRS 9, which

include the following:
1. Loans and receivables that are measured at amortized cost.

2. Investments in debt instruments that are measured at amortized cost.
3. Credit commitments and financial guarantee contracts that are not
measured at fair value through profit or loss.
SSS adopts the rebuttable presumption in PFRS 9 that a default does not
occur later than when a financial asset is 90 days past due.
Credit exposures are classified into three different stages at each reporting
date, based on the significance of the increase in credit risk since initial
recognition, as follows:
• Stage 1 – Performing – credit exposure that fall under this category are
those that are not yet amortizing, current and whose credit risk has not
appreciated significantly from initial recognition, i.e., credit exposures with
days-past-due (DPD) not more than 30 days.
• Stage 2 – Under-performing – credit exposures classified under this

category are those whose credit risk increased significantly since initial
recognition, i.e., past due credit exposures with DPD greater than 30 days
but less than or equal to 90 days.
• Stage 3 – Non-performing – credit exposures that have clear evidence of

impairment at the reporting date, i.e., past due credit exposures with DPD
greater than 90 days.
In assessing significant increases in credit risk, the risk of a default occurring

on the credit exposure at the reporting date is compared to the risk of a
default occurring on the credit exposure at the date of initial recognition.
As soon as the loan is granted to the member-borrower, it is classified under

Stage 1. For all credit exposure already in the books, the following rules shall
apply:
a. Exposures with significantly increased credit risk since initial recognition

shall be classified under Stage 2.
b. Non-performing exposures shall be classified under Stage 3.
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a. Exposures with missed payment for more than thirty (30) days
b. Exposures with risk ratings downgraded by at least two grades for rating
agencies with below 15 rating grades and three grades for rating
agencies with more than 15 rating grades
a. There is sufficient evidence to support full collection.

b. Full collection is probable when payments of principal and interest due
are received for at least six months.
c. Non-performing restructured exposures that have exhibited improvement
in credit worthiness of the counterparty after a total one-year probation
period, i.e.,
- Six (6) months in Stage 3 before transferring to Stage 2, and another
6 months in Stage 2 before transferring to Stage 1; or
- Directly from Stage 3 to Stage 1 without passing through Stage 2 after
12 months.
Restructured exposures classified as “performing” prior to restructuring shall

be initially classified under Stage 2. The transfer from Stage 2 to Stage 1
shall follow the six-month rule as mentioned in item “b” above.
The ECLs are revalued every year.
a.6 Derecognition of financial assets
Financial assets are derecognized when the rights to receive cash flows from
the asset have expired or have been transferred and the SSS either has
transferred substantially all risks and rewards of ownership or has neither
transferred nor retained substantially all the risks and rewards of ownership
but has transferred control of the asset.
b. Financial liabilities
Financial liabilities are initially measured at fair value, and when applicable,
adjusted for transaction costs unless the Fund designated a financial liability
at FVTPL.
The Fund’s financial liabilities include accounts payable, accrued operating

payable, accrued benefit payable, claims pay-out payable, and lease
liabilities which are subsequently measured at amortized cost.
Financial Liabilities are derecognized in the statement of financial position

only when the obligation is extinguished either through discharge,
cancellation or expiration. The difference between the carrying amount of the
financial liability derecognized and the consideration paid or payable is
recognized in profit or loss.
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2.4 Cash and cash equivalents
Cash comprises cash on hand and cash in bank. Cash equivalents are deposit on
call and highly liquid investments with original maturity of three months or less,
which are readily convertible to known amount of cash and are subject to an
insignificant risk of change in value.
2.5 Inventories
Supplies and materials inventories are valued at cost. Cost is determined using
the weighted average method. Inventories are recognized as an expense when
deployed for utilization or consumption in the ordinary course of operation of the
SSS.
Inventories include semi-expendable property, or those tangible items with cost

below the capitalization threshold for property and equipment (see Note 2.8).
These items are recognized as expense in full upon issuance to end users but are
recorded in the Report on the Physical Count of Inventories for monitoring
purposes.
2.6 Non-current assets held for sale
Non-current assets are classified as held for sale (NCAHFS) if their carrying
amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met when the sale is highly
probable, and the asset is available for immediate sale in its present condition.
Assets classified as held for sale are measured at the lower of carrying amount or
fair value less costs to sell. Any excess of carrying amount over fair value less
costs to sell is an impairment loss. No depreciation is recognized for these assets
while classified as held for sale.
NCAHFS includes real and other properties acquired (ROPA) in settlement of

contribution and member/housing/other loan delinquencies through foreclosure or
dation in payment. They are initially booked at the carrying amount of the
contribution/loan delinquency plus transaction costs incurred upon acquisition.
When the booked amount of ROPA exceeds the appraised value of the acquired
property, an allowance for impairment loss equivalent to the excess of the amount
booked over the appraised value is set up.
Upon in-depth assessment that properties classified as NCAHFS ceases to meet

the conditions set under PFRS 5, such assets will be reclassified to other asset
classification following the guidelines in the Classification, Reclassification and
Recording of SSS Real Estate Properties.
2.7 Investment property
Investment property account consists of land or building held to earn rentals

and/or for capital appreciation. This account also includes real properties that
were previously subject of mortgage loans, individual real estate loan, commercial
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and industrial loan which were foreclosed or acquired through Dacion en Pago,
cancelled or relinquished by former owners in favor of SSS due to non-payment.
An investment property is initially measured at cost, including transaction costs.

Such costs should not include start-up costs, abnormal waste, or initial operating
losses incurred before the investment property achieves the planned level of
occupancy. After initial recognition, it is measured at fair value with any change
therein recognized in profit or loss except for properties carried at cost due to
inability to determine the fair value reliably.
The fair values of investment properties are determined annually at the reporting
date by an independent professionally qualified valuer and internal appraiser
using the Market Data Approach, Cost Approach, and Income Approach. The
market value is estimated using gathered available local market conditions giving
considerations to the following: (a) extent, character and utility of the properties,
(b) comparable properties which have been sold recently, plus current asking
prices; (c) zoning and current land usage in the locality, and (d) highest and best
use of the property.
The generally accepted Market Data or Comparative Approach is used to

measure land under the investment property based on sales and listings of
comparable property registered within the vicinity. Comparisons are premised on
the factors of location, land use, physical characteristics of the land and time
element. For the value of the land with improvements, the appraisers use the
Cost Approach taking into account the current cost of reproduction, if new, of the
replaceable property in accordance with the prevailing market prices for materials,
labor, contractor’s overhead, and profit and fees. In arriving at the value of the
improvements, the modified quantity survey method is used by analyzing the
various construction elements of the property (foundations, columns and beams,
flooring walls, roof, etc.). In the Income Approach, the value of the property is
determined using the interest rates and yields as well as the records of rental
income and operating expenses. However, in some cases when there are no
comparable listings in the open market, the Value Opinion from other appraisers
or the BIR Zonal Valuation are used which are considered as Level 3 valuation.
Transfers to or from investment property are made when and only when, there is
a change in use, evidenced by: (a) commencement of owner-occupation; (b) end
of owner-occupation; (c) commencement of an operating lease to another party,
or (d) commencement of development with a view to sale.
2.8 Property and equipment
Property and equipment, except land, are stated at cost less accumulated
depreciation, amortization and any impairment in value. Land is carried at
revalued amount. Increase in value as a result of revaluation is recognized in OCI
and accumulated in Revaluation Surplus. However, if there is a decrease in the
value of asset due to revaluation, this shall be recognized in OCI to the extent of
recorded Revaluation Surplus in SCE, any excess shall be recognized in profit
and loss.
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Valuations are done by an external independent appraiser every three years or as
the need arises. The value of land is arrived at using the Market Data Approach.
In this approach, the value of the land is based on sales and listings of
comparable properties registered within the vicinity. This approach requires the
establishment of comparable properties by reducing reasonable comparative
sales and listings to a common denominator with the subject. This is done by
adjusting the differences between the value of the subject property and those
actual sales and listings regarded as comparable. Comparisons are premised on
the factors of location, land use, physical characteristics of the land, time element,
quality, and prospective use. On improvement and building, the Cost Approach is
adopted in arriving at the market value of the building. This approach considers
the cost to reproduce or replace in new conditions the assets appraised in
accordance with current prices for similar assets including costs of labor,
transport, installation, commissioning, and consultant’s fees. Adjustment is then
made for accrued depreciation which encompasses condition, utility, age, wear
and tear, functional and economic obsolescence.
Construction in progress (CIP) represents building and building/leasehold

improvements under construction and is stated at cost. CIP is not depreciated
until such time as the relevant assets are completed and put into operational use.
The initial cost of property and equipment consists of its purchase price, including
import duties and non-refundable purchase taxes, and any directly attributable
cost necessary in bringing the asset to its working condition and location for its
intended use. Cost also includes an initial estimate for dismantling and removing
the item or restoring the site on which it is located, the obligation for which an
entity incurs when the item is acquired. The capitalization threshold for an item to
be recognized as property and equipment is P15,000 while items whose amounts
are below the capitalization threshold are accounted as semi-expendable
properties (see Note 2.5).
The cost of replacing a part of an item of property and equipment is recognized in

the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the SSS, and its cost can be measured
reliably. The carrying amount of the replaced part is derecognized. An item of
property and equipment is derecognized when either it has been disposed of or
when it is permanently withdrawn from use and no future economic benefits are
expected from its use or disposal. Any gains or losses on the retirement and
disposal of an item of property and equipment are recognized in the SCI in the
period of retirement or disposal.
Expenditure incurred after the item has been put into operations, such as repairs
and maintenance, are normally recognized as expenses in the period such cost is
incurred.
Depreciation is calculated over the depreciable amount less its residual value. It is
recognized in profit or loss on a straight-line basis over the estimated useful life of
each part of an item of property and equipment.
Consistent with COA Circular No. 2017-004, the estimated useful life of property
and equipment are as follows:
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Assets Useful Life
Building and other structures 10-30 years
Furniture and equipment/computer hardware 5-10 years
Land improvements 10 years
Transportation equipment 7 years
Leasehold improvements 10-30 years or the term of
lease whichever is shorter
Property and equipment except land and construction in progress have residual
value equivalent to five per cent of the acquisition cost for assets recorded in
2021. The property and equipment acquired in prior years are presented at ten
per cent residual value. A system enhancement will be developed to compute the
correct depreciation expense recognized for the property and equipment acquired
in prior years using the five percent residual value.
Leasehold improvements are amortized over the shorter of the terms of the
covering leases or the estimated useful life of the improvements.
Fully depreciated assets are retained in the accounts until they are no longer in
use.
2.9 Right-of-use assets
The System recognizes the right-of-use (ROU) asset for the right to use the
underlying asset over the lease term. ROU asset is initially measured at costs,
which comprises the initial amount of lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct cost
incurred and an estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset on which it is located, less any lease incentives
received.
Right-of-use assets are amortized on a straight-line basis over the term of the
lease.
2.10 Intangible assets
Intangible assets are stated at cost less accumulated amortization and

impairment. They comprise software and licenses. Acquired computer
software/licenses are capitalized on the basis of the costs incurred to acquire and
bring to use the specific software. Computer software/licenses with finite lives are
amortized on a straight-line basis over their estimated useful life while those with
indefinite useful life or those used perpetually or for as long as there are
computers compatible with them are carried at cost and tested annually for
impairment or whenever there is an indication that the assets may be impaired.
Intangible assets are derecognized once the computer where it was installed is
disposed.
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2.11 Impairment of non-financial assets
The carrying amount of non-financial assets are assessed to determine whether

there is any indication of impairment, or an impairment previously recognized may
no longer exist or may have decreased. If any such indication exists or when
annual impairment testing is required, then the asset’s recoverable amount is
estimated. Recoverable amount is the higher of an asset's fair value less costs to
sell and its value in use.
Impairment loss is recognized if the carrying amount of an asset exceeds its

estimated recoverable amount. The carrying amount of the asset is reduced
through the use of an allowance account and the amount of loss is recognized in
profit or loss unless it relates to a revalued asset where the value changes are
recognized in other comprehensive income/loss and presented within reserves in
the property valuation reserve portion. Depreciation and amortization charge for
future periods is adjusted.
An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment
loss had been recognized in prior years.
2.12 Insurance contract liability
In CY 2020, SSS adopted PFRS 4 and recognized contingent liability for the
present value of future benefits and expenses, less the present value of future
contributions discounted at the appropriate risk-free discount. The change in
accounting treatment from PAS 37 – Provisions, Contingent Liabilities and
Contingent Assets is in compliance with the government’s directive of treating
government insurance institutions as self-sustaining insurance institutions.
Insurance contract liability (ICL) is a social benefit liability recognized in

compliance with DOF’s policy directive requiring government insurance institutions
(GIIs) falling under its supervision to adopt PFRS 4. It is computed based on six
per cent discount rate considering SSS’ past investment performance, which
considered the following: (a) past performance of SSS’ investment assets; (b)
collectability of its loan receivables; and (c) forward-looking view of the portfolio
performance or outlook on SSS’ investments and market conditions.
2.13 Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits
will flow to the SSS and the amount of revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is
recognized:
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a. Members’ contribution
Revenue is recognized from member contributions when it falls due or when

earned, not necessarily when collected or when cash is received with the
following criteria: (a) collectability is reasonably assured (e.g., the employer
can be reliably expected to pay the contribution; (b) sufficient documentation
exists; and (c) the contribution due is determinable.
The SSC under its Resolution No. 161-s.2021 dated April 8, 2020, approved
the Accounting Policy on Accrual of Revenues from Member Contributions
and Expenses for Member Benefits. The accrual of member contributions
procedural guidelines includes the following:
1. Employers shall be assessed for collectability.
a. In the initial phase (Phase 1), accrual shall be applied to large

accounts employers starting CY 2020. Phase 2 covering all active
employers will be implemented in CY 2022.
b. The employer must be paying for at least three years and with
continuous payment for the last six months which shall be recomputed
by semester.
c. Accrual shall stop if the employer has no payment for three

consecutive months prior to applicable month.
2. Contribution collection from active regular employers who pass the

collectability assessment shall be accrued every month using as basis
the electronic Collection System (e-CS) which automates the generation
of Payment Reference Number (PRN).
3. Analysis of the accrual report:
a. The generated PRN shall be recorded as receivable and revenue

based on the applicable month.
b. If the employer paid, the accrual entries will be reversed or will be

adjusted accordingly if with error.
c. If the employer did not pay or make advance payment for the
contributions due, different balance sheet entries are required
depending on when employer/member pays the amount due:
accounts receivable asset or unearned revenue liability.
d. Provision for impairment shall be recorded in accordance with

existing ECL policy.
Contributions from other employers that are not yet included in the accrual
process, self-employed and voluntary members' contribution shall be
recorded on a cash basis.
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Contributions from Flexi-Fund, PESO Fund and Mandatory Provident Fund
(MPF) members are directly credited to equity upon collection.
b. Interest and penalty income
Revenue is recognized as the interest and penalty accrues, taking into

account the effective yield on the asset and computed based on the following
approved policy:
▪ Accrual of interest and penalty earned on loans shall only be allowed if

the loans and other credit accommodations are current and performing.
▪ Loans are current and performing if any principal and/or interest are paid
for at least 90 days from the contractual due date.
▪ No accrual of interest and penalty is allowed if a loan has become non-

performing. Interest and penalty on non-performing loans shall be taken
up as income only when actual payments are received.
▪ Loans, investments, receivables, or any financial asset shall be

considered non-performing, even without any missed contractual
payments, when it is considered impaired under existing accounting
standards, classified as doubtful or loss, in litigation, and/or there is
evidence that full repayment of principal, interest and penalty is unlikely
without foreclosure of collateral, if any.
▪ All other loans, even if not considered impaired, shall be considered non-
performing if any principal and/or interest and/or penalty are unpaid for
more than 90 days from contractual due dates or accrued interest for
more than 90 days have been capitalized, refinanced, or delayed by
agreement.
c. Dividend income
Dividend income is recognized at the time the right to receive the payment is
established.
d. Rental income
Rental income is recognized on a straight-line basis over the lease term.
2.14 Expense recognition
Expenses are recognized in the statement of comprehensive income upon

utilization of the service or at the date they are incurred for operational and benefit
expenses.
The accrual of benefit expense is recognized when the transaction occurs or

when the expenses are incurred, not necessarily when they are paid or disbursed
with the following criteria being met: (a) there is an obligating event that creates a
legal or constructive obligation that results in an entity having no realistic
28
alternative to settling that obligation; and (b) the amount of expense is
determinable or can be reliably estimated in the case of accrued expense.
The procedural guidelines for the accrual of benefit expenses include the
following:
1. Phase 1 - Retirement benefits and Phase 2 – Disability benefits, both for

pensions only
a. Benefit filed and encoded in the Benefit System but not yet settled (i.e.,
in-process claims) or incurred benefits but not yet paid (IBNP);
b. Benefits entitlements but not yet filed (i.e., compulsory retirement), or
incurred benefits but not yet reported (IBNR); and
c. Adjustments of the portion of initial pension benefits (i.e., advance 18
months) paid but applicable after the financial statement reporting period.
Phase 3 shall cover lumpsum and all other benefits, including monthly
pension for death. The program development will be in place before
December 2023 in time for the computation of the accrued benefits.
2. The Benefit Systems shall compute the amount of accrued benefits for set-up
of payables, including the generation of aging report.
3. The Benefit Administration Division (BenAD) and Information Technology

Management Group (ITMG) shall certify the generation of the following
reports:
a. Summary of Yearly Benefit Accruals per Type; and

b. Yearly Aging Report of Accrued Benefits.
4. Year-end reports shall be provided to the Branch Accounting Department in

January of the following year for proper recording.
2.15 Leases
a. SSS as lessee
At inception of the contract, the SSS has assessed that the contract contains
a lease that conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. The System assessed whether:
• The contract involves the use of an identified asset – which the asset is
physically distinct or represents substantially all the capacity of a
physically distinct asset;
• The System has the right to obtain substantially all of the economic
benefits from the use of the asset throughout the period of use; and
• The System has the right to direct the use of the asset and that it has the
decision-making rights that are most relevant to changing how and for
what purpose the asset is used.
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As a lessee, the SSS classified leases as an operating lease based on its
assessment of non-transferability of the risks and rewards of ownership. The
right-of-use asset is recognized for lease contracts that have a term of more
than twelve months at the commencement date of the lease.
The lease liability is initially measured at the present value of the lease
payments that are not yet paid at the commencement date, discounted using
applicable Bloomberg’s PHP BVAL rates. The BVAL rate used in 2021 is
based on the term specified in the contract.
In applying PFRS 16 for the first time, SSS has used the following practical
expedients permitted by the Standard:
• The use of applicable BVAL rate to a portfolio of leases depending on the

term on the lease of contract;
• Reliance on previous assessments on whether leases are onerous;
• The accounting for operating leases with a remaining lease term of less
than 12 months as at January 1, 2021 as short-term leases on a straight-
line basis;
• The exclusion of initial direct costs for the measurement of the right-of-
use asset at the date of initial application; and
• The use of hindsight in determining the lease term where the contract
contains options to extend or terminate the lease.
SSS has also elected not to reassess existing lease contracts at the date of
initial application. Instead, for contracts entered into before the transition
date, SSS relied on its assessment made applying PAS 17. Accrued rent
payable is also adjusted accordingly.
The SSS leases various offices nationwide. Rental contracts are typically
made for fixed periods of three to eight years but may have extension
options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions.
b. SSS as lessor
Leases, where the SSS does not transfer to the lessee substantially all the
risk and benefits of ownership of the asset, are classified as operating leases.
Lease income from operating leases is recognized as income on a straight-
line basis over the lease term.
In any case, SSS does not enter into a finance lease agreement.
2.16 Related party disclosures
PAS 24 ensures that an entity’s financial statements contain the disclosures

necessary to draw attention to the possibility that its financial position and profit or
loss may be affected by the existence of related parties and by transactions and
30
outstanding balances with such parties. Related party transactions are transfer of
resources, services or obligations between SSS and its related parties, regardless
of whether a price is charged.
2.17 Provisions and contingencies
Provisions are measured at the best estimate (including risks and uncertainties) of
the expenditure required to settle the present obligation and reflects the present
value of expenditures required to settle obligation where the time value of money
is material.
A provision is recognized when, as a result of a past event, the SSS has a present
legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle that obligation.
However, it requires the approval of the SSC and the setup of a budget for the
actual expenditure required to settle the obligation.
ICL is the sum of the present value of future benefits and expenses, less the
present value of future contributions discounted at the appropriate risk-free
discount rate. Actuarial valuation methodology and assumptions are discussed in
Note 22.
2.18 Prepayments
Prepayments are the usual advances to suppliers and creditors including the cash
deposit to the Procurement Service of the Department of Budget and
Management (DBM). The advances to suppliers and creditors are expensed
monthly. Also included is the benefit expense for the first 18 monthly retirement
pension to members who opted to avail of the advance retirement benefits.
2.19 Income taxes
Based on Section 16, RA No. 11199, as amended, 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 import duty.
Thus, SSS is exempt from paying income taxes to the government.
2.20 Transactions in foreign currencies

Transactions in foreign currencies are initially recorded in Peso using the BSP
exchange rate at the date of transaction. Monetary assets and liabilities
denominated in foreign currencies are restated at the prevailing functional
currency rate at the reporting date. Exchange rate differences arising from the
restatement or settlement of monetary items are recognized in profit or loss in the
year in which they arise.
2.21 Events after the reporting date
Post year-end events that provide additional information about the System’s
financial position at the end of reporting date (adjusting events) are reflected in
31
the financial statements. Post year-end events that are not adjusting events are
disclosed in the notes to financial statements when material.
3. CASH AND CASH EQUIVALENTS
2021 2020
Cash on hand 796,322,123 1,086,399,922
Cash in bank 4,666,857,995 3,919,743,759
Cash equivalents 16,612,068,890 16,508,130,917
22,075,249,008 21,514,274,598
Cash in banks earn interest at the respective bank deposit rates. Time and special savings
deposits (TD/SSD) are made for varying periods of up to 90 days depending on the
immediate cash requirements of SSS and earn interest at the prevailing time and special
savings deposit rates.
Interest rates per annum range from 0.12 per cent to two per cent for time and special
savings deposits which is dependent on the tenor with overnight (one day) placement at the
minimum. Savings and current accounts interest rates are 0.001 per cent to 0.40 per cent
per annum.
In consideration of the banks’ making their deposit pick up facility available to the SSS, the
latter agreed to maintain an average daily balance of P1 million and P10 million with DBP
and LBP/UBP, respectively, in a non-drawing interest bearing current account/savings
account (CASA) with each of the banks’ servicing branches. As at December 31, 2021, the
amount of P374 million is being maintained in said banks for such purpose.
Interest income earned from cash in banks and term deposits amounted to P420.258 million
and P607.557 million as at December 31, 2021 and 2020, respectively (see Note 23).
4. FINANCIAL ASSETS
4.1 Current Financial Assets
2021 2020
Financial assets – at FVTPL

67,934,104,818 50,941,474,318
32
2021 2020
Financial assets – at amortized cost

Debenture bonds 400,000,000 0
Corporate bonds 2,665,790,000 8,996,720,000
Corporate notes 2,324,638,628 500,000,000
Government notes 0 510,000,000
10,503,651,975 14,254,027,625
Allowance for impairment loss (7,771,404) (18,311,048)
10,495,880,571 14,235,716,577
78,429,985,389 65,177,190,895
The fair value of financial assets through profit or loss are measured using active
quoted market prices, recurring and Level 1 based on the level of fair value hierarchy.
They are measured at fair value to properly reflect the changes and actual values of
the asset in the market.
Pursuant to Section 26-A of the RA No. 11199, the engagement of seven local fund
managers was approved by SSC under its Resolution No. 1035-A dated December
12, 2018 to manage portion of SSS Investment Reserve Fund with total original
deployed investment of P9 billion under the following mandates: pure equity fund
mandate; pure fixed income mandate and balanced fund mandate. As at December
31, 2021, the managed fund is reduced to P4.552 billion due to redemption of
investment from four local fund managers.
Mutual fund investment is an investment vehicle made up of a pool of money collected

from many investors for the purpose of investing in securities such as stocks, bonds,
money market instruments and other assets managed by professional fund managers.
Investment in domestic mutual fund was approved by SSC under Resolution Nos. 351
and 509 dated April 25 and June 20, 2018 respectively, with a P3 billion allotment. The
said amount is invested and distributed at P1 billion each to the three accredited
mutual fund companies, namely: Philequity Fund, Inc., Philippine Stock Index Fund
Corp. and Sun Life of Canada Prosperity Balanced Fund, Inc. As at December 31,
2021 and 2020, the value of invested funds amounted to P3.149 billion and P3.075
billion, respectively.
The costs of the financial assets at FVTPL are as follows:
2021 2020
64,336,684,171 51,957,070,186
33
4.2 Non-Current Financial Assets
2020
2021
As restated
Financial assets at amortized cost
Debenture bonds 2,813,170,775 3,213,170,775
Corporate bonds 19,084,974,765 17,830,937,354
Corporate notes 1,680,000,000 4,148,000,000
Government notes 510,000,000 0
239,437,388,429 193,425,289,634
Allowance for impairment – corporate
bonds and notes (32,312,253) (92,021,615)
239,405,076,176 193,333,268,019
Financial assets at FVTOCI
Corporate notes 1 1
Corporate bonds 508,065,035 523,852,555
142,782,757,647 134,409,044,447
382,187,833,823 327,742,312,466
The fair value of the FVTOCI financial asset is measured using active quoted market
prices, recurring and level 1 based on the level of fair value hierarchy. They are
measured at fair value to properly reflect the changes and actual values of the asset in
the market. Realized fair value gains/losses of equity securities are recognized in the
other comprehensive income. The cost of the financial assets as at December 31,
2021 and 2020 is P151.948 billion and P158.219 billion, respectively.
Notes and bonds earn interest at 1.25 to 18.25 per cent depending on the amount and
terms of the investment. Interest income earned from investments in notes and bonds
– local as at December 31, 2021 and restated 2020 is P11.543 billion and P13.601
billion, respectively (see Note 23).
5. RECEIVABLES – NET
2020
2021
As restated
Current
Other receivables 1,656,587,010 330,677,012
72,887,943,936 84,588,279,555
34
2020
2021
As restated
67,661,138,887 81,090,413,914
Non-Current
Other receivables 1,197,736,311 2,550,751,052
78,964,706,276 82,270,312,818
57,069,783,288 59,821,985,630
124,730,922,175 140,912,399,544
Loans and receivable account is composed of receivables from short-term member loans,
and housing loans due within twelve months. It also includes contribution and premium
receivable, interest, dividend, and sales contract receivables. The account receivable
collecting bank/agent is now presented under the Loans and receivable account from
previous classification under Other receivables per COA Circular No. 2021-005. These are
measured at amortized cost with provision of impairment loss pursuant to PFRS 9 and the
policy guidelines on the recognition of ECL.
The composition of the current and non-current portion is as follows:
2020
2021
As restated
Current
Contribution and premium receivable 1,959,701,040 11,325,257,363
Receivable collecting banks/agents (CB/CA) 820,740,439 667,306,566
Dividend receivable 275,625,079 657,238,087
Sales contract receivable 468,309 464,306
70,941,148,563 84,074,068,205
2020
2021
As restated
Non-Current
Sales contract receivable 1,211,762,935 1,232,324,560
Loan to other government corporation 9,566,230,283 9,686,181,975
Receivables collecting banks/collecting agents 333,395,452 316,447,220
77,751,189,984 79,703,537,953
35
Loans receivable is recognized at amortized cost and composed of the following:
2021 2020
Member loans 112,294,712,372 118,172,934,616
Housing loans 1,412,321,606 1,560,520,509
Pension loans 3,533,444,328 3,514,955,267
Commercial and industrial loans 69,509,283 69,509,283
Program member assistance for development
entrepreneurship (MADE) 17,219,220 17,219,220
117,327,206,809 123,335,138,895
107,023,175,812 114,495,403,763
The Loan Restructuring Program (LRP) which ended on April 1, 2019, has covered the
member-borrowers affected by previous calamities/disasters with past due calamity loans
and other short-term member loans. The total principal and accrued interest of all past due
short-term loans of the member-borrower were consolidated into one Restructured Loan
(RL1). Penalties were condoned after full payment of outstanding principal and interest of
RL1 within the approved term. However, if the balance of RL1 is not zeroed at the end of the
term, the unpaid principal of RL1 and the proportionate balance of condonable penalty
become part of a new principal under Restructured Loan 2 (RL2). The balance of the
restructured member loan as at December 31, 2021 amounted to P8.711 billion with
accumulated impairment provision of P794.941 million.
The Educational Assistance Loan Program which is part of Member loans amounted to
P5.256 billion consisting of the 50:50 SSS and NG (National Government) shares, has been
extended as loans to member beneficiaries as at December 31, 2021. The loans for degree
course shall be payable in five years to start 18 months for semestral courses, 15 months for
trimestral courses, or 14 months and 15 days for quarter-term courses from the scheduled
last release date or from the date of last release for those who will not avail of the
subsequent releases. For technical/vocational courses, the loan shall be payable in three
years to start 18 months for semestral courses from the scheduled last release date or from
the date of last release for those who will not avail of the subsequent release. Interest and
penalty on overdue amortization as at December 31, 2021 and 2020 are P43.325 million
The Pension Loan Program (PLP) which was launched on September 3, 2018, aims to
provide financial aid to qualified SSS retiree pensioners by way of providing low-interest
loans. The program was approved by the SSC under Resolution No. 341 dated April 25,
2018 and its implementing guidelines were issued under Office Order No. 2018-033 dated
May 8, 2018. After 10 months of implementation, the SSC under its Resolution No. 429-
s.2019 dated July 5, 2019 approved the enhancement of the program in terms and
conditions of the PLP. Among the highlights of the enhancements are as follows: (1) the
maximum loan limit increased from P32,000 to P200,000; (2) the age of the retiree
pensioner at end of the month of loan term changed from 80 years of age or below to 85
years of age and below; and (3) longer loan repayment terms from 12 months to 24 months.
The monthly amortization of the pension loan shall be deducted from the monthly pension of
the pension loan borrower in which the first monthly amortization shall become due on the
second month after the loan was granted. Interest rate remains at 10 per cent per annum
until fully paid computed on a diminishing principal balance, which shall become part of the
36
monthly amortization. Loan releases for CY 2021 to 69,111 retiree pensioners amounted to
P3.088 billion and interest income recognized is P297.559 million.
Commercial and industrial loans are loan programs through conduit arrangement with the
accredited participating financial institutions (PFIs)/banks and covered by the Omnibus
Credit Line (OCL). The SSS made available the funds of the program to the PFIs which will
on-lend the fund to eligible borrowers/end-users. The programs are being implemented in
accordance with the guidelines, and terms and conditions in the PFIs OCL.
Program MADE are loans released/restructured between CYs 1991 to 1994 to cooperatives,
which was approved under SSC Resolution No. 502 on September 7, 1989 to encourage
the promotion of livelihood enterprises through community-based organizations to create
and sustain local employment opportunities.
Contribution and premium receivable represents accrued receivables due for the next month
which is the next calendar year following the policy approved by the SSC (see Note 2.12a).
However, for 2021, accruals were not effected due to non-separability of the MPF from the
SSS Contribution which requires IT enhancements. Due to the volume of transactions,
computation can only be done electronically.
The interest receivable account represents the accrued interest from various SSS
investments such as cash equivalents, notes and bonds, and loans and receivables which
are still uncollected as at reporting period. Likewise, the penalty receivable represents the
accrual of penalty income from various delinquent loans. These accounts are credited
whenever cash is collected, either monthly, quarterly, semi-annually or annually depending
on the interest/penalty payment dates of the investment.
As at December 31, 2021 and 2020, the accrued interests consist of the following:
2020
2021
As restated
Government notes and bonds 3,899,114,076 3,229,414,776
Member loans 363,515,098 451,773,038
Debenture bonds 103,089,229 14,727,032
Receivable from PhilGuarantee 43,295,000 6,185,000
Cash equivalent and Short-term Money
Placement 7,759,974 18,644,603
Housing loans 6,008,936 5,134,633
4,603,851,918 3,963,890,903
4,569,820,513 3,943,256,393
Loans and receivables earn interest at their respective rates, as follows:

Loans receivable
Member loans 3.0 to 10.0
Housing loans 3.0 to 12.0
37
Pension loans 10.0
Commercial and industrial loans (CIL) 2.5 to 14.0
Loan to other government corporation – NHMFC 4.0
Sales contract receivable 6.0 to 9.0
Non-current interest receivable includes those originated from Home Guaranty Corporation
(HGC) guaranteed corporate notes and loan to National Home Mortgage Finance
Corporation (NHMFC) amounting to P6.162 million and P12.575 billion, respectively.
The SSC approved SSS’ participation and invested in various HGC (now Philippine
Guarantee Corporation or PGC) guaranteed Asset Participation Certificates (APC) from CY
1995 to CY 2000. However, the Asset Pools failed to service the regular interest due to the
APCs. In view of this, the SSS decided to call on the guaranty of HGC from November 2000
to July 2001. HGC was unable to pay in full guaranteed obligations and partially settled it
through the issuance of debenture bonds and transfer of 19 lots through Dacion en Pago.
From CY 2005 to CY 2013, correspondence and meetings were sent and conducted,
respectively between and among SSS, HGC and the Department of Finance (DOF). Upon
approval of the SSC under Resolution No. 899 dated November 27, 2013, SSS formally filed
with Office of the Government Corporate Counsel (OGCC) the Petition for Arbitration and
Adjudication versus HGC (Arbitration Case No. 2013-004). The amount subject of arbitration
was P5.24 billion covering principal, HGC-guaranteed interest, and compound interest.
Thereafter, negotiations continued between PGC and SSS until an agreement has been
reached with SSS condoning 4.972 per cent of the guaranteed interest resulting to a
settlement value of P4,813,170,775.22. The Memorandum of Agreement (MOA) was
executed on August 26, 2021 to settle all disputes and to put an end to the arbitration case.
Upon approval of the MOA by the Department of Justice (DOJ) on December 23, 2021,
PGC shall pay SSS with the following terms and conditions:
Cash Payment:
➢ Upon approval of the Department of Justice/Secretary of 1,100,000,000.00
Justice (DOJ/SOJ) of the MOA with fixed interest rate of 2.01%
p.a. from October 31, 2020 to actual payment date
Deferred Cash Payment
➢ Year 2 to 4 (P100 million per year) 300,000,000.00
➢ Year 5 200,000,000.00
PGC Debenture Bond – Backed by Sovereign Guaranty
➢ Year 1 to 4 redemption (P200 million per year) 800,000,000.00
➢ Year 5 (Balloon payment of balance) 2,413,170,775.22

Settlement value as of October 31, 2020 4,813,170,775.22
38
Receivables – CB/CA account represents premium contributions and loan payments
collected by accredited banks and agents but not yet remitted to SSS amounting to
P820.740 million and P667.307 million as at December 31, 2021 and 2020, respectively.
This account is debited upon receipt of collection/remittance data/reports that are
electronically transmitted by the CBs/CAs, which are uploaded by the SSS Data Center
Operations Department from different CBs/CAs servers and credited for the total
remittances appearing in the bank statements. The balances of the account were presented
net of negative balances totaling P572.152 million and P720.633 million as at December 31,
2021 and 2020, respectively, which are mostly prior years’ transactions due to unsubmitted
valid collection/remittance data/reports.
Dividend receivables are cash dividends earned but not yet received on shares of stocks
that are held as FA at FVTPL and FA at FVTOCI.
Sales contract receivables are contracts arising from deed of conditional sale executed by
the SSS with properties under NCAHFS to various buyers of the said properties.
Loan to other government corporation refers to loans to NHMFC as mandated under

Executive Order (EO) No. 90 to be the major government home mortgage institution whose
initial main function was to operate a viable home mortgage market, utilizing long-term funds
principally provided by the SSS, the GSIS, and Home Development Mutual Fund (HDMF), to
purchase mortgages originated by both the private and public institutions within the Unified
Home Loan Program (UHLP) guidelines. In accordance with the mandates of EO No. 90,
the SSC in its Resolution No. 509 dated August 4, 1988 approved the long-term loans to
NHMFC for low-income SSS members. Total loan releases from CY 1988 to CY 1995
amounted to P30.075 billion with total housing loan borrowers/beneficiaries of 135,229. In
CY 1996, a substantial number of UHLP Portfolio borrowers defaulted in the payment of
their loans to NHMFC, thereby causing NHMFC also to default in its payments to SSS. To
address the deterioration of NHMFC’s financial position, a Memorandum of Agreement
dated June 5, 1996 was executed by the parties. On December 17, 2003, the SSC under
Resolution No. 684 approved the restructuring of NHMFC’s total obligations of P40.515
billion broken down into: Principal (Low, Mod & High Del) – P27.940 billion, Accrued Interest
- P11.961 billion and Penalty – P0.614 billion. The interest and penalty were not capitalized
during the restructuring and are to be paid after full satisfaction of restructured principal
obligation per Restructuring Agreement.
As at December 31, 2021, the total outstanding obligation of NHMFC is P22.145 billion,
broken down as follows:
Principal 9,566,230,283
Interest 11,964,663,228
Penalty 614,104,940
22,144,998,451
The DOF in its letter dated October 19, 2020 informed SSS that P10 billion shall be
considered in the CYs 2022 to 2024 budget allocation for the Net Lending Program to
NHMFC in view of the tight fiscal space of the National Government for CY 2020 and CY
2021.
39
Lease receivable consists of operating lease receivables from contract of lease executed
with the lessees. It represents accrual of rental income from tenants of SSS which are
collectible within a year. Rent/lease income is derived from investment properties, ROPA
and operating assets, and recognized a total income of P1.205 billion and P1.137 billion as
at December 31, 2021 and 2020, respectively (see Note 33).
2021 2020
Current
130,743,419 36,682,015
2021 2020
Non-Current
3 1
Other receivables consist of the following:
2020
2021
As restated
Current
Penalty receivable 265,472,682 247,600,218
Receivables – disallowances/charges 28,117,072 20,933,878
Insurance claims receivable 1,001,940 2,262,791
Due from officers and employees 623,001 592,984
356,587,010 330,677,012
329,483,167 319,440,280
2020
2021
As restated
Non-Current
Due from officers and employees 141,725,318 195,301,933
Others 2,356,010,993 2,355,449,119
2,497,736,311 2,550,751,052
2,037,097,456 2,090,088,067
Penalty receivable is broken down as follows:
2021 2020
Penalty Receivable
Member loans 264,753,864 245,330,149
Housing loans 32,722 635,239
40
2021 2020
Rental receivable 430,348 535,349
Sales contract receivable 255,748 1,099,481
265,472,682 247,600,218
238,368,839 236,363,486
Receivable – disallowances/charges are disallowances in audit due from SSS officials and
employees which have become final and executory.
Insurance claims receivables pertain to the amounts due from insurance companies for the
unpaid pension loan and housing loan balances due to death of pensioner-borrower and
member-borrower, respectively.
Other receivables consist of accounts such as:
2020
2021
As restated
Sale of financial assets 42,942,733 30,104,208
Supplier's creditable tax 14,210,973 25,896,955
Mutual fund management fee rebate 3,379,731 3,285,978
Others 838,878 0
61,372,315 59,287,141
Other Receivables arising from sale of financial assets pertain to equity securities which
have been sold, but remain unpaid as of reporting period.
The account Receivable-Supplier’s creditable tax is debited to recognize the amount of

creditable withholding taxes on year-end accrued expenses not yet deducted from the
payment to supplier but remittance to BIR in the following month will be advanced by SSS.
This account is credited upon payment to supplier.
Rebate on management fees from mutual fund companies represent refunds not yet
converted into additional shares as of reporting period.
Allowance for impairment on expected credit losses for current and non-current receivables
are measured depending on the credit exposures and credit risks. Loan accounts that are
current or only up to 30 days past due are classified in Stage 1. Those that are more than 30
days but less than 90 days past due are classified at Stage 2, while those that are already
past due for more than 90 days are classified at Stage 3.
2021 2020
Current
Contributions and premiums receivable 96,732,205 0
Interest receivable 34,031,405 20,634,510
5,226,805,049 3,497,865,641
41
2020
2021
As restated
Non-current
Loans receivable–other government corporation 3,187,284,803 3,329,164,616
Receivable – collecting bank/agent 127,078,618 129,471,100
21,894,922,988 22,448,327,188
Movements in Allowance for Impairment Loss of current and non-current receivables for CY
2021 are as follows:
Restated Balance, Additional Recovery/ Balance,

January 1 Provision Reversal December 31
Loans and receivable 25,311,416,977 2,189,263,171 (1,041,939,731) 26,458,740,417

Lease receivable 162,876,135 13,690,710 (1,321,923) 175,244,922
Other receivable 471,899,717 16,220,518 (377,537) 487,742,698
25,946,192,829 2,219,174,399 (1,043,639,191) 27,121,728,037
The impairment provisions as at December 31, 2021 and 2020 amounted to P2.219 billion
and P1.888 billion, respectively, and are recognized in the books using the guidelines in
recognizing and measuring credit impairment set forth in Note 2.3a.5 based on the approval
of the SSC in its Resolution No. 41-s.2021.
As part of the corporate social responsibilities of the System, the SSS supports the
government during the time of pandemic to assist the NG in its COVID-19 response and in
accelerating the recovery and bolster the resiliency of the Philippine economy. SSS
implemented the following moratorium on loan and lease payments in response to RA No.
11469 or Bayanihan to Heal as One Act (Bayanihan 1) and RA No. 11494 or Bayanihan to
Recover as One Act (Bayanihan 2):
1. SSC Resolution No. 205-s.2020 dated May 19, 2020 and 423-s.2020 dated
August 26, 2020 – Moratorium on Short-Term Loan Payments of SSS Members
Affected by the Corona Virus Disease 2019 (COVID-19) Situation
2. SSC Resolution No. 233-s.2020 dated May 19, 2020 - Moratorium and Extension
of Payment for Buyers of SSS Owned Real and Other Properties Acquired and
Housing Acquired Assets
3. SSC Resolution No. 234-s.2020 dated May 19, 2020 – Deferment of Rental
42
4. SSC Resolution No. 258-s.2020 dated May 19, 2020 – Moratorium on Housing
Loan Payments of SSS Members Affected by Corona Virus Disease 2019
(COVID-19) Situation
5. SSC Resolution No. 551-s.2020 dated October 21, 2020 – Moratorium on Short-
Term Loan Payments Under RA No. 11494 "Bayanihan to Recover as One Act”
(Bayanihan Act 2)
6. SSC Resolution No. 552-s.2020 dated October 21, 2020 – Moratorium on

Housing Loan Payments Under RA No. 11494 or "Bayanihan to Recover as One
Act”
7. SSC Resolution No. 609-s.2020 dated November 16, 2020 – Deferment of Rental
8. SSC Resolution No. 610-s.2020 dated November 16, 2020 – Moratorium and
Extension of Payment for Buyers of SSS Owned Real and Other Properties
9. SSC Resolution No. 456 s.2021 dated September 15, 2021 – SSS Housing Loan
Restructuring and Penalty Condonation under Program 4 of the Pandemic Relief
and Restructuring Program.
10. SSC Resolution No. 498 s.2021 dated September 29, 2021- Short-Term Member
Loan Penalty Condonation Program under Program 5 of the Pandemic Relief and
Restructuring Program.
The moratorium on loan repayments generally covered the repayment period of April to May
2020 (applicable period of March to April 2020) and November to December 2020
(applicable period of October to November 2020). The loan payment term is extended
based on the borrower’s number of month's moratorium. Loan repayment shall resume on
the month immediately after the borrower’s moratorium period. The accrued interest during
moratorium period shall be paid on the last month of loan payment term (short-term member
loans and housing loans) or equally divided and paid over the remaining installment
payment term of the buyer (sales contract receivables).
The moratorium on lease payments covered the payment period of April to May 2020 and
November to December 2020. The lease payment shall resume one month after lifting of
Enhanced Community Quarantine (ECQ) while accrued interest during moratorium shall be
equally amortized up to a maximum of six monthly installments which shall be added to the
regular rent due on the succeeding months.
The Pandemic Relief and Restructuring Program can be availed by member-borrowers with
past due loans for at least six months as of the day of condonation period for housing loans
and short-term member loans. The availment period for the condonation program is up to
three months commencing from November 2021 to February 2022.
43
6. INVENTORIES
2021 2020
Office supplies inventory 73,376,923 89,241,312
Accountable forms inventory 4,317,239 3,786,308
Drugs and medicines 949,348 842,224
Medical, dental and laboratory supplies inventory 1,196,536 2,121,318
79,840,046 95,991,162
69,167,527 85,318,643
Supplies and materials issued and recognized as expense during CYs 2021 and 2020
amounted to P54.746 million and P84.415 million, respectively (see Note 29).
The amount of allowance is the same for 2021 and 2020 because there was no write-down
of inventories that have become obsolete, details as follows:
2021 2020
Office Supplies Inventory 9,871,378 9,871,378
Accountable Forms Inventory 801,141 801,141
10,672,519 10,672,519
7. NON-CURRENT ASSETS HELD FOR SALE
Acquired assets/
Land Building Total
Registered
Net carrying amount, January 1, 2021 0 0 167,063,160 167,063,160
Transfer 0 0 31,074,670 31,074,670
Disposals 0 0 (48,446,925) (48,446,925)
Impairment, net (loss)/recovery, 0 0 (394,530) (394,530)
Acquired assets/
Land Building Total
Registered
Net carrying amount, January 1, 2020 0 582,660 238,796,707 239,379,367
Transfer 0 (582,660) (26,109,608) (26,692,268)
Disposals 0 0 (76,603,603) (76,603,603)
Impairment, net (loss)/recovery, 0 0 644,362 644,362
The non-current asset held for sale is measured at the lower of carrying amount or fair value
less cost to sell. The fair value is measured based on the assessment of internal/external
expert, non-recurring and is level 2 and 3 based on the level of fair value hierarchy. As at
44
December 31, 2021, the impairment loss of P3.883 million and recoveries/reversals of
impairment of P3.489 million are recognized in profit or loss.
Had there been no impairment, the carrying amount of the NCAHFS – Acquired
assets/Registered is P192.660 million and P173.586 million as at December 31, 2021 and
2020, respectively.
As for the internally appraised properties classified as NCAHFS, the value of land was
established using the Market Data Approach. The initial value of the land is based on the
sales and listings of comparable properties. Adjustments were then applied to the gathered
value of land by comparing the physical and locational characteristics of the subject property
and the comparable properties.
The value of the improvements was arrived at using the Cost Approach. The current
reproduction cost of the improvement or structure is first established in accordance with the
prevailing market prices of construction materials, labor, contractors’ overhead, profits and
fees. Adjustments are then made to reflect depreciation resulting from physical deterioration
and obsolescence.
NCAHFS includes real and other properties acquired which are held for sale if its carrying
amount will be recovered principally through a sale transaction rather than through
continuing use. As at December 31, 2021, SSS has sold 117 properties through cash and
installment bases generating gain on sale of P75.416 million, which forms part of the P1.128
billion gains generated for CY 2021 (see Note 24).
NCAHFS properties that were unsold for more than one year with carrying value of P71.226
million were reclassified to Investment Property, while IP registered accounts with P102.300
million carrying value were consolidated and transferred to NCAHFS based on the
Guidelines on the Classification, Reclassification and Recording of SSS Real Estate
Properties approved by the SSC on June 10, 2020 under Resolution No. 292-s.2020. There
were no transfer or sale of NCAHFS to government and non-profit organizations. All
properties were sold to private individuals (see Note 9).
8. OTHER CURRENT ASSETS
This account is composed of the following prepayments:
2021 2020
Prepayments
Prepaid benefit expense 5,641,305,656 4,658,265,084
Advances to contractors/suppliers 3,000,000 11,500,000
Prepaid rent 6,029,722 8,314,948
Prepaid insurance 93,142 540,984
Other prepayments 51,837,221 5,691,194
5,702,265,741 4,684,312,210
Prepaid benefit expense refers to the first 18 monthly retirement pension in lump sum paid
to SSS members who opted to avail the advance retirement benefits. This was approved
45
per SSC Resolution No. 161.s-2021 (see Note 2.13) and retrospectively applied in the prior
year.
Advances to contractors/suppliers represents the P3.000 million cash deposit to

Procurement Service (PS)-Philippine Government Electronic Procurement System
(PhilGEPS) intended for the Government Fares Agreement (GFA). This is an initiative of the
DBM and the PS-PhilGEPS that will ensure fast, efficient, flexible and savings in time,
energy and money when processing the air transportation needs of all government officers
and personnel of their domestic trips.
Other prepayments consist of subscriptions to Microsoft Office 365 applications amounting

to P48.388 million and creditable withholding tax at source from rental or other services
deducted by other government agencies designated by BIR as authorized agent.
9. INVESTMENT PROPERTY
Land Building Total

Transfer (31,074,670) 0 (31,074,670)
Additions 52,088,008 0 52,088,008
Disposal (91,429,465) 0 (91,429,465)
Fair value gain (loss) 4,263,520,130 262,016,255 4,525,536,385
Land Building Total

Transfer (67,441,140) 0 (67,441,140)
Additions 202,844,073 582,661 203,426,734
Disposal (44,620,971) 0 (44,620,971)
Fair value gain (loss) 3,470,669,649 (565,641,347) 2,905,028,302
The costs of investment properties as at December 31, 2021 and 2020 are P13.445 billion
and P13.309 billion, respectively. There was an adjustment in the reported cost of
investment properties in CY 2020 due to the correction of the cost of leased building in
Pasay City from P2.635 billion to P1.997 billion. It was initially recognized based on the
available appraisal report pending receipt of cost of building from Lessee Corporation.
The increase in the cost of IP in 2021 was due to the additional IP-registered accounts
transferred from Housing Loan and IP-Acquired Asset transferred from NCAHFS. The
transfer of IP registered accounts with book value of P102.300 million were consolidated
and reclassified to NCAHFS, wherein the Transfer Certificates of Title (TCT) were already
transferred in the name of SSS, while NCAHFS amounting to P71.226 million which
remained unsold for more than one year were transferred to IP (see Note 7).
The fair value of investment property is determined based on the Cost and Market Approach
methods performed by independent appraisers and in-house appraisers, non-recurring and
is Level 2 and 3 based on the level of fair value hierarchy. Market values were based on the
46
evidence of reliable transactions like recent land sales and sales offerings of comparable
properties within the vicinity and the application of land capitalization rate. Data gathered
from interviews with brokers and other real estate practitioners who are knowledgeable
about the property market were also used as bases. Adjustment factors were likewise
considered such as the date of appraisal, size, location, corner/road influence, and
conditions of sale.
The SSS Policy in the Classification, Reclassification and Recording of Real Estate
Properties identifies the following guidelines when properties are transferred to investment
property:
• NCAHFS remained unsold for more than one year

• PPEs which are no longer used for operational purposes
• Mortgage properties that have been registered in the name of SSS
On the other hand, investment property is transferred to NCAHFS or PPE:
• Upon consolidation of the registered property (Transfer Certificate of Title (TCT) in

the name of SSS) ready for sale
• Upon approval from approving authority to utilize the property for SSS operational
use.
The following amounts are recognized in the Statement of Comprehensive Income:
2021 2020
Net gain on fair value adjustment 4,527,743,785 2,905,028,302
Rental income 1,183,610,613 1,111,175,653
Penalty on rentals 4,148,619 2,550,257
Gain/loss on sale/disposal 18,619,683 6,932,900
Investment expenses (34,734,246) (52,753,429)
Impairment loss – rental and penalty receivable (12,989,350) (82,641,770)
5,686,399,104 3,890,291,913
As at December 31, 2021, there were 109 investment properties sold which generated a net
gain of P18.620 million.
The impairment loss – rental and penalty receivable decreased from P82.642 million in 2020
to P12.989 million in 2021 primarily due to the reclassification of rental NCAHFS to Rental IP
in 2020. Provision for impairment of the reclassified asset was already provided in 2020,
thus minimal impairment loss is recorded in 2021.
Part of the direct operating expenses incurred were for the investment properties generating
revenue through lease as at December 31, 2021 and 2020 amounting to P25.843 million
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10. PROPERTY AND EQUIPMENT – NET
Furniture and
equipment,
Buildings
transportation
computer
improvements
hardware and
others
Cost
January 1, 2021 4,543,368,645 19,340,319 1,474,744,980 3,715,142,715 61,744,594 9,814,341,253
Additions 0 0 0 247,978,175 0 247,978,175
Transfers 0 1,373,913 0 0 (1,373,913) 0
Net revaluation increase 2,526,409,955 0 0 0 0 2,526,409,955
January 1, 2021 0 12,745,085 897,745,495 2,478,332,040 0 3,388,822,620
disposal/adjustments 0 (14,927,476) (197,311,766) 0 (212,239,242)
Balance, December 31, 2021 13,953,592 914,093,184 2,598,590,987 0 3,526,637,763
January 1, 2021 0 1,137,050 108,934,119 0 0 110,071,169
Impairment loss/(recovery) 0 (791,206) (19,533,494) 0 0 (20,324,700)
Accumulated impairment loss,
December 31, 2021 0 345,844 89,400,625 0 0 89,746,469
Carrying amount, December 31, 2021 7,069,778,600 6,414,796 455,315,247 1,148,971,517 60,370,681 8,740,850,841
Furniture and
equipment,
Buildings
transportation
computer
improvements
hardware and
others
Cost
January 1, 2020 4,543,368,645 19,340,319 1,511,736,808 3,519,858,077 58,260,148 9,652,563,997
Additions 0 355,854,418 12,808,539 368,662,957
Transfers 0 0 9,254,546 0 (9,254,546) 0
disposal/adjustments 0 0 (46,246,374) (160,569,780) (69,547) (206,885,701)
January 1, 2020 0 11,691,205 911,782,262 2,395,600,560 0 3,319,074,027

Balance, December 31, 2020 0 12,745,085 897,745,495 2,478,332,040 0 3,388,822,620
December 31, 2020 0 1,137,050 108,934,119 0 0 110,071,169
Carrying amount,
December 31, 2020 4,543,368,645 5,458,184 468,065,366 1,236,810,675 61,744,594 6,315,447,464
Among the Property and Equipment, only land is subject to revaluation. Revaluation was
performed by an independent appraiser as at December 31, 2021. Any increase in the
value of the land as a result of revaluation is recorded under other comprehensive income
and property revaluation reserves under equity, while a decrease is recognized in profit or
loss to the extent that it exceeds any amount previously credited to property valuation
reserve. The balance of the property revaluation reserves as at December 31, 2021 and
2020 is P6.573 billion and P4.046 billion, respectively, and is not subject to any
appropriations as at end of the reporting period.
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If land were stated on the historical cost basis, its carrying amount as at December 31, 2021
and 2020 is P534.062 million.
Rental income from a portion of five property and equipment under a cancellable lease
agreement as at December 31, 2021 and December 31, 2020, which amounted to P7.776
million and P9.514 million, respectively, were included in the Statement of Comprehensive
Income. The portion under lease cannot be sold separately and is insignificant, thus,
remains as Property and Equipment.
As at December 31, 2021 and 2020, the total carrying amount of fully depreciated property
and equipment that are still in use are P96.605 million and P92.102 million, respectively.
11. INTANGIBLE ASSETS – NET
2021 2020
Cost
Additions 21,433,293 541,000
Accumulated amortization
Balance at beginning of year 585,814,761 546,045,214
Amortization charge for the period 40,317,779 45,454,897

Retirement/disposals/cancellation 0 0
Net book value at end of year 119,993,813 138,878,299
Intangible assets with definite and indefinite life include both computer software and
licenses. The carrying amount of intangible assets with indefinite life as at December 31,
2021 and 2020 is P60.699 million. All intangibles with definite life are amortized either over
a period of five years or with 20 per cent annual amortization rate. As at December 31, 2021
and 2020, the total cost amount of fully amortized intangible assets that are still in use are
P608.105 million and P481.518 million, respectively.
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12. RIGHT-OF-USE ASSETS
2021 2020
Cost
Balances at beginning of year 1,274,408,489 1,130,362,431
Additions 194,445,097 149,950,447
Balances at end of year 1,383,881,514 1,274,408,489
Depreciation Expense 264,612,273 245,041,597
Carrying amount at end of year 736,532,439 812,536,732
The SSS recognizes the ROU Assets for the right to use the underlying leased assets. ROU
assets are depreciated each year on a straight-line basis over the term of the lease (see
Note 15).
13. OTHER NON-CURRENT ASSETS
2021 2020
Deposits 99,462,696 97,766,937
Other assets 316,437,275 292,791,091
415,899,971 390,558,028
Allowance for impairment – other assets (71,876,036) (72,377,567)
344,023,935 318,180,461
Deposits account is recognized for the amount of deposits for telephone lines, water
connection services, meter deposits, and office rental deposits.
Other assets account consists of fire insurance premium (FIP) and mortgage redemption
insurance (MRI) advanced by SSS for properties mortgaged to the SSS. The decrease in
the allowance for impairment is due to full payment of housing loan accounts.
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14. FINANCIAL LIABILITIES
2020
2021
As restated
Current financial liabilities
Accounts payable 1,307,017,190 1,799,398,466
Accrued operating expenses 2,479,334,937 1,759,689,684
Accrued benefit payable 450,844,145 912,533,570
Claims pay-out payable 3,209,196 3,709,491
4,240,405,468 4,475,331,211
Non-current financial liabilities
Operating lease payable 0 1,422,339
4,240,405,468 4,476,753,550
Accounts payable and accrued operating expenses comprise of SSS’ obligations payable to
members, suppliers, employees and officials and loan overpayments for refund to member-
borrowers.
Accrued benefit payable represents the SSS obligation to members for retirement pension
benefit claims which is recognized using accrual basis of accounting. This includes the
accrual of benefit expenses for retirement and disability pension benefits based on the
policy approved under SSC Resolution No. 161-s.2021 dated April 8, 2021.
Claims pay-out payable pertains to unpaid insurance claims of policyholders composed of

Premium Liability, Fire/earthquake claims IBNP and incurred but not yet reported (see Note
27).
15. LEASE PAYABLE
This account represents the lease liability for the right to use the underlying lease asset up to
the end of the lease contract in accordance with PFRS 16, details follow:
2021 2020
Beginning Balance, January 1 883,933,700 960,672,692
Setup/Additions 194,445,097 149,950,447
Lease payments (242,863,342) (221,093,466)
Ending balance, December 31 824,551,579 883,933,700
Current lease liabilities 232,114,952 156,254,268
Non-current lease liabilities 592,436,627 727,679,432
The associated right-of-use assets are measured at the amount equal to the lease liability at
initial set-up, adjusted by the amount of any prepaid or accrued lease payments relating to
the lease recognized. There were no onerous lease contracts that would have required an
adjustment to the right-of-use assets at the date of initial application.
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ROU Assets 2021 2020
Beginning balance, January 1 812,536,732 910,884,170
Set-up/Additions 194,445,097 149,950,447
Depreciation (264,612,273) (245,041,597)
Net carrying amount, December 31 736,532,439 812,536,732
SSS as a lessee maintains 138 lease contracts with variable terms ranging from more than
one year to 10 years that are recognized as assets and liability, while two contracts with
terms of less than one year are recognized as operating lease.
RA No. 11469 or Bayanihan 1 and RA No. 11494 or Bayanihan 2 were enacted granting the
President of the Philippines additional authority to combat the COVID-19 pandemic.
Recognizing that jobs and operations are disrupted as a consequence of the community
quarantine, one of the economic reliefs provided is the concession of residential and
commercial rental fees. SSS as a lessee was given rent reprieves and discounts by the
lessors of Angeles and Lemery Branch Offices. Angeles Branch Office’s lessor granted
SSS free rent from March 17 to May 17, 2020, while Lemery Branch Office’s lessor granted
free rent from March 16 to April 30, 2021, 75 per cent discount in May 2020 and 50 per cent
discount from June to August 2020. No more discounts were given in CY 2021.
16. INTER-AGENCY PAYABLES
2021 2020
Due to BIR 83,442,363 102,811,404
Due to GSIS 98,370,770 64,895,851
Due to PhilHealth 8,949,775 11,124,275
Due to Pag-IBIG 9,139,913 9,600,302
Due to SSS 3,861,510 83,180
Due to LGU 69 0
203,764,400 188,515,012
This account includes withholding taxes, contributions to GSIS, Philippine Health Insurance
Corporation (PHIC), HDMF and loan amortization due to SSS which were deducted from the
payroll of SSS employees.
Due to BIR includes among others, value-added tax (VAT) payable, other taxes withheld for
remittance and over remittance in CY 2021 for offsetting in the January 2022 remittance.
The VAT exemption of SSS was repealed by Section 86 of RA No. 10963, also known as
the Tax Reform for Acceleration and Inclusion (TRAIN) effective January 1, 2018.
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17. TRUST LIABILITIES
2021 2020
Trust liabilities 596,949,682 712,530,850
Guaranty/security deposits payable 243,238,506 242,842,670
Customers’ deposits payable 248,885,124 246,293,690
1,089,073,312 1,201,667,210
Trust liabilities consist of the following:
2021 2020
Funds held in trust
Officials and employees 538,050,990 469,675,201
Borrowers and other payors 39,373,849 23,878,611
Suppliers and creditors 2,550,433 3,092,090
Small business wage subsidy (SBWS) related 566,897 199,124,435
Flexi-fund 11,793,332 10,323,877
SSS provident fund and medical insurance 3,877,332 5,699,787
Dividends – stock investment loan program 649,767 649,767
Educational loan fund – DECS 87,082 87,082
596,949,682 712,530,850
Funds held in trust (FHT) from officials and employees include amounts deducted from
employees’ payroll other than mandatory deductions such as provident fund contributions,
loan amortization repayments, association dues, etc. and are remitted the following month to
private entities. It also includes among others the amounts deducted from their
separation/retirement claims for the benefits received but subsequently disallowed in audit
which as at December 31, 2021 and 2020, amounted to P507.830 million and P435.647
million, respectively. This is done to ensure collection once the pending appeal in court or
with the Commission on Audit (COA) will result in an unfavorable decision and
disallowances become final and executory. However, in the event that the Supreme Court or
COA decision is in favor of SSS and its employees, the amount withheld from these retired
employees will be returned in full. The total amount of P25.050 million have been returned to
retired/separated employees from NCR branches in view of the final decision of the
Supreme Court En Banc under G.R. No. 243278 promulgated on November 3, 2020 and
received by SSS on May 7, 2021 for the Notice of Disallowance (ND) No. 2012-07 dated
June 13, 2012.
FHT from borrowers and other payors are rental deposits received from tenants, and surety
bonds from collecting agents and are refunded after expiration of the contract.
FHT from suppliers and creditors are payments of liquidated damages from suppliers and
contractors with protest and sale of bid deposits to bidders. Amounts are utilized or refunded
to suppliers if the protest is reconsidered and approved. Collections on sale of bid deposits
are utilized for payment of expenses of the Bids and Awards Committee (BAC) such as the
payment of honoraria to BAC members. Unutilized amounts are recorded as miscellaneous
income.
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SSS provident fund and medical insurance represents the SSS’ share in the premium
contribution and medical insurance of employees and officials and foreign representatives,
respectively.
The SBWS fund represents a joint program of the DOF, SSS and BIR. The SBWS aims to
provide a monthly wage subsidy of P5,000 to P8,000 each for two months to around 3.4
million eligible employees of small businesses affected by the economic standstill after
separate quarantine measures were imposed nationwide in March 2020 to stop the further
spread of the COVID-19, with DBM approved budget of P51 billion. A total of 3,101,685
members became beneficiaries of the SBWS program. As at December 31, 2021, unutilized
funds amounting P5.666 billion including interest earned were returned to the Bureau of
Treasury.
Guaranty/security deposits payable are composed of bidder’s deposits, performance or cash

bonds and retention money from collecting agents and/or winning bidders in the
procurement of goods and services, infrastructure and consultancy services.
Customers’ deposits payable are rental deposits made by tenants leasing SSS properties.
18. DEFERRED CREDITS/UNEARNED INCOME
2021 2020
Current
Deferred credits – Output tax 799,975 0
Unearned rental income 87,987,704 76,721,000
88,787,679 76,721,000
Non-current
Unearned income – Unrealized gain-bond 302,210,840 329,061,510
390,998,519 405,782,510
The output tax is the VAT of SSS for its properties under lease while unearned rental
income represents advance rental payments from tenants of SSS properties.
The non-current unearned income represents profit recognized from SSS participation in the
Republic of the Philippines Domestic Debt Consolidation Program (Bond Exchange) 2011
and 2014, and Liability Management Program (Bond Exchange) 2015 amortized over the
term of the new Benchmark Bonds.
19. PROVISIONS
2021 2020
Pension benefits payable 759,077,316 478,496,400
Leave benefits payable 1,123,994,445 1,169,992,326
54
2021 2020
Retirement gratuity payable 28,691,057 28,691,057
Other provisions 222,240,169 264,702,133
2,134,002,987 1,941,881,916
Pension benefits payable represent the accrual of compulsory retirement benefit pension
already entitled but not yet filed or IBNR based on the policy guidelines set forth in Note
2.13.
Leave benefits payable represents the cash value of the accumulated vacation and sick
leave credits of employees, 50 per cent of which can be monetized once a year and the
balance payable upon resignation/retirement. As at December 31, 2021, there were 2,681
employees who availed of the monetization of leave credits with a total amount of P128.576
million.
Retirement gratuity payable is available to qualified employees under any one of RA No.
1616, RA No. 660 and RA No. 8291. Under RA No. 1616, SSS, as the last employer of the
qualified employees, pays the gratuity benefit of those who opt to retire under the said law.
Benefits under RA No. 660 and RA No. 8291 are paid by GSIS. Thus, the liability only
pertains to RA No. 1616.
Other provisions include Retirement Incentive Award (RIA) given to employees with at least
20 years of creditable service and are entitled to P5,000 for every year of service upon
retirement. As at December 31, 2021, 273 employees were given RIA in the total amount of
P47.184 million.
The provision of the SSS’ defined benefit obligation is prepared in accordance with the PAS
19. The defined benefit obligations represent the SSS’ liabilities for the post-employment
benefits of its employees. It is calculated using the Projected Unit Credit (PUC) Method, the
valuation method prescribed under PAS 19. Using this method, the present value of SSS’
defined benefit obligations and related current service costs were calculated with the
assumption that each period of service gives rise to an additional unit of benefit entitlement
and measures each unit separately in building up the final obligation.
Aside from financial assumptions, demographic assumptions were also used in the
calculations. These include the assumptions on mortality, disability, and turnover/separation
of the employees. The mortality assumptions refer to the probability of death of an employee
while the disability assumptions refer to the probability of an employee being disabled. The
employee turnover assumptions take into account the probability of an employee leaving
employment due to causes other that death (e.g., resignation, retirement, etc.).
Other provisions also include liability for mortgage redemption insurance for housing and
real estate loans amounting to P1.361 million and P1.419 million CY 2021 and CY 2020,
respectively (see Note 27).
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20. INSURANCE CONTRACT LIABILITY
2021 2020
Social Security Fund (SSF) 7,591,297,256,633 6,734,089,235,597
Employee’s Compensation (EC) Fund 38,283,091,820 23,131,055,080
7,629,580,348,453 6,757,220,290,677
Insurance contract liability (ICL) is a social benefit liability (SBL) recognized in compliance
with DOF’s policy directive requiring government insurance institutions (GIIs) falling under its
supervision to adopt PFRS 4, the adoption of which was approved by the SSC under
Resolution No. 123-s.2021 dated March 10, 2021. It is computed based on six per cent
discount rate considering SSS’ past investment performance, which considered the
following: (a) past performance of SSS’ investment assets; (b) collectability of its loan
receivables; and (c) forward-looking view of the portfolio performance or outlook on SSS’
investments and market conditions.
ICL is the sum of the present value of future benefits and expenses, less the present value
of future contributions discounted at the appropriate risk-free discount rate. Actuarial
valuation methodology and assumptions are discussed in Note 22.
21. OTHER PAYABLES
This account is composed of undistributed collections as follows:
2021 2020
Current
Member loans collection 615,584,146 671,036,222
Sales Contract Receivable (SCR) collections 94,359,462 56,046,853
OFW collections 45,764,809 89,068,802
Undistributed collections 1,373,898 51,746,331
Real estate loans collection 143,308 14,560,934
Rental collection 135,194 0
Employees’ housing loan program 0 80,520
757,360,817 882,539,662
Non-current
Other payables 50,000,000 50,000,000
807,360,817 932,539,662
On member loans collection, the balance of unposted collections for CY 2021 amounting to
P615.584 million was lower than CY 2020 unposted collections by P55.452 million or 8.26
per cent because the SSS has undertaken various efforts to address the posting issues and
expedited the reconciliation process through (1) enhancing computer programs and
systems, (2) continuous sending and monitoring of No Collection List and Unbalance
Transactions to branches, (3) regular clean-up of unpostables and reconciliation and (4)
improved frequency of generating the Actual Distribution of payments in the enhanced Loan
Management System on a semi-monthly basis.
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Undistributed collections for SCR are collections for the sale of acquired assets that have
not yet been posted to individual buyers' account pending receipt of documents of approved
sale. These consist of down payments and monthly amortizations.
OFW collections are remittances from OFWs which are unidentified as of the date of
remittance and are reclassified after validation. The decrease in OFW collections amounting
to P43.304 million of foreign deposits which are already validated and identified were
reclassified to proper accounts.
The Undistributed collections accounts always carry respective balances at the end of any
given period. These are collections of loan amortizations and contributions that have not yet
been posted to individual members or borrowers and other accounts pending receipt of
collecting agencies’/employers’ documents and actual distribution of collections and
payments whose nature are not indicated by payors.
Since November 2020, SSS has been sending loan billing notices to member-borrowers and
employers. This loan billing statement or notice contains a corresponding PRN as part of the
Real-Time Processing of Loans (RTPL) program. Individual members and employers must
present the PRN when paying at SSS branches with Automated Tellering System or any
RTPL-compliant partner. The PRN helps facilitate the immediate and correct posting of loan
payments matched to their loan accounts.
The non-current portion of Other Payables represents the P50.0 million seed money to fund
the initial investment activities of the PESO fund. The SSC in its Resolution No. 140-s.2021
dated March 24, 2021, approved the extension of the use of the money until the liquidation
of the SSS PESO Fund upon the implementation of the new Voluntary Provident Fund
Program.
22. EQUITY
The SSS’ Equity consists of the following:
2020
2021
As restated
Reserve fund (6,951,136,953,816) (6,106,279,980,864)
Cumulative changes in fair value (9,167,674,519) (23,809,882,311)
Revaluation surplus 6,572,652,754 4,046,242,799
Members’ equity 16,863,603,589 1,281,698,533
(6,936,868,371,992) (6,124,761,921,843)
22.1 Reserve fund
The reserve fund consists of the following:
2020
2021
As restated
Reserve fund/Retained earnings 678,447,913,254 650,943,967,536
Reserved fund - policy reserves (7,629,584,867,070) (6,757,223,948,400)
(6,951,136,953,816) (6,106,279,980,864)
57
The SSS has recognized a net profit of P28.446 billion for the year ended December
31, 2021, before the recognition of net change in policy reserves of P872.360 billion,
due to adoption of PFRS 4 and as at that date, total assets amounted to P702.402
billion. However, as described in Note 20, there is a significant increase in liability as
the SSS recognized the social benefit liability to its members.
Management believes that the payment of benefits will remain as usual and is
confident that it will operate until 2054 as projected by Actuarial experts. The
implementation of the new contribution rates and the increase in the Monthly Salary
Credit to P25,000 effective January 01, 2021 helped sustain its operations and that will
be sufficient to meet operational requirements. Furthermore, under RA No. 11199,
otherwise known as the Social Security Act of 2018, Section 21, the Philippine
Government guarantees that all the benefits prescribed in the RA shall not be
diminished and it accepts general responsibility for the solvency of the System.
Management acknowledges that uncertainty remains over the ability of SSS to meet
its funding requirements to pay its members’ benefits and operational expenses.
However, as described above, Management has a reasonable expectation that the
SSS has adequate resources to continue in operational existence for the foreseeable
future.
Investment Reserve Fund (IRF)
All revenues of SSS that are not needed to meet the current administrative and
operational expenses are accumulated in the reserve fund. Such portion of the reserve
fund that is not needed to meet the current benefit obligations is known as the IRF
which the SSC manages and invests with the skill, care, prudence and diligence
necessary to earn an annual income not less than the average rate of treasury bills or
any other acceptable market yield indicator in any or in all of the undertaking, under
such rules and regulations as may be prescribed by the SSC.
No portion of the IRF or income thereof shall accrue to the general fund of the NG or
to any of its agencies or instrumentalities, including government-owned or controlled
corporations, except as may be allowed under the SS Act of 2018. It also provides that
no portion of the IRF shall be invested for any purpose or in any instrument, institution
or industry over and above the prescribed cumulative ceilings as follows: 60 per cent
in private securities, 5 per cent in housing, 30 per cent in real estate related
investments, 25 per cent in short and medium-term member loans, 30 per cent in
government financial institutions and corporations, 15 per cent in any particular
industry, 7.5 per cent in foreign-currency denominated investments, 5 per cent in
private-sponsored infrastructure projects without guarantee, 5 per cent in private and
government-sponsored infrastructure projects with guarantee, and 5 per cent in private
and government-sponsored infrastructure projects.
As at December 31, 2021, all investment categories are within the SSS charter limits
of RA No. 11199.
58
Actuarial Valuation of the reserve fund of the SSS
The SS Act of 2018 requires the SSS Actuary to submit a valuation report every three
years or more frequently as may be necessary, to determine the actuarial soundness
of the reserve fund of the SSS and to recommend measures on how to improve its
viability.
The reserve fund is affected by (a) changes in demographic factors (such as

increased life expectancy, ageing of population, declining fertility level and delay in
retirement) and (b) the economic conditions of the country. Economic factors on which
assumptions are made include interest rates, inflation rates and salary wage
increases. With these and other assumptions, and taking into account the uncertainty
of future events, the liability and life of the fund are projected.
The latest 2019 Actuarial Valuation of the Social Security Fund (SSF) adheres to the
International Standard of Actuarial Practice 2 – Financial Analysis of Social Security
Programs as issued by the International Actuarial Association (IAA). This standard has
been supported within the International Social Security Association (ISSA) and the
International Labour Organization (ILO). It provides actuaries performing the valuation
of social security programs the guidance to give intended users confidence that
actuarial services are carried out professionally and with due care; the results are
relevant to their needs and are presented clearly and understandably; and the
assumptions and methodology used are disclosed appropriately. It also promotes the
development of consistent actuarial practice for social security programs throughout
the world.
The Actuarial Valuation estimates the SSF life and liabilities using an open group
projection method, where members who will join the System in the future are
considered in the projection of revenues and expenditures. The SSS program, as with
other social security schemes, was designed such that the contributions of the current
paying members fund the benefits of the current pensioners; hence, there is income
transfer across generations. With the continuous membership of future generations
into the System, the benefits of the current and future pensioners are continuously
funded by the contributions of the former; hence, the open-group projection method is
appropriate in assessing the sustainability of the SSS program.
SSS has transitioned to PFRS 4 on the reporting of its financial condition, starting with
the 2020 Financial Statements. Valuation standards set by the Insurance Commission
are to be applied, where the life insurance policy reserve shall be valued, where
appropriate, using gross premium valuation. Unlike the open group projection method
used in the Actuarial Valuations, the gross premium valuation applies a closed group
projection method, which only considers the existing members up to end of reporting
date while continuing their contribution up to a certain date. The liability computed with
this approach is highly theoretical, as it is only truly meaningful for a program that is
intended to be fully funded. Nevertheless, it provides an insight as to the magnitude of
the liability of a program that is designed to be partially funded, such as the SSS
program.
In the gross premium valuation used under the closed group projection method, the
Social Benefit Liability (SBL) is computed as the sum of the present value of future
benefits and expenses, less the present value of future contributions discounted at the
59
appropriate risk-free discount rate. In contrast, under the open group projection
method, assets are deducted from the SBL to estimate the unfunded liability.
The Valuation using the closed group projection method was conducted for the
reporting date of December 31, 2019, December 31, 2020, and December 31, 2021.
The cut-off date for actual membership and demographic data is December 31, 2018.
These existing members together with new entrants up to the end of reporting date,
who continue their contribution up to a certain date, were considered in the
projections.
As shown in the following table, the computed social benefit liabilities at a discount
rate of 6 per cent are computed at P6.273 trillion as of December 31, 2019, P6.734
trillion as at December 31, 2020 and P7.591 as at December 31, 2021.


31, 2019 31, 2020 31, 2021
Social Benefit Liability
6.273 6.734 7.591
at 6% discount rate
Meanwhile, the comparison of the liabilities computed under the open and closed
group projection methods is presented in the following table.
2019 Actuarial Valuation


Year of Reserve Exhaustion 2054
Year Net Revenue Becomes Negative 2045
Reserves 0.626
Unfunded Liability 6.248
The valuation of a social security scheme, which is usually made using the open-group
method, has financial indicators as outputs that provide information on the future
evolution of costs and on the capacity of the scheme to support them in the long term.
One such financial indicator is the year of reserve exhaustion, which presents the
number of years the scheme may continue to operate without any changes being
made to the legislated contribution rate.1 For the SSF, this year is projected to be in
2054.
1
Pierre Plamondon, et al., Actuarial Practice in Social Security (Geneva: International Labor Organization,
2002).
60
The SBL as of December 31, 2021 is at P7.591 trillion, computed using the closed
trillion. As expected of a partially funded program, the liability under the closed group

works to the advantage of SSS considering the magnitude of its membership data.
liability computations. Meanwhile, these projections already incorporated the
scheduled contribution increases up to 15 per cent in 2025 as mandated by RA No.
11199 (Social Security Law of 2018). Note that the projections do not reflect yet the
potential impact of the COVID-19 pandemic on the SSS social security program.
The magnitude of the liabilities was caused in part by a structural imbalance, brought
about by the mismatch of the increases in pension, monthly salary credit (MSC) ceiling
and contribution rate. During the period from 1980 to 2016, pensions were increased
through across-the-board pension increases of up to 20 per cent (22 times) and
increases in minimum pension amount through RA No. 8282; MSC ceiling was also
increased 12 times. The contribution rate, on the other hand, only increased 4 times
during the same period, from 8 per cent to 8.4 per cent in 1980, 8.4 per cent to 9.4 per
cent in 2003, then to 10.4 per cent in 2007, and finally to 11 per cent in 2014.
The effect of demographic change on the fund should also be recognized, as there
may not be enough contributors remitting to pay all the expenses and benefits of the
growing number of pensioners due to declining population growth rate and lengthening
life spans.
To address these and other issues on the viability of the reserve fund, actuarial
valuations and other studies are conducted regularly, the results of which serve as
basis of recommendations for policy reforms. The recommendations mentioned in the
valuations include raising the contribution rate, improving the contribution collection,
increasing the minimum and maximum MSC, revisiting the pension formula, reviewing
the qualifications for eligibility for long-term benefits, raising the retirement age, and
exploring other means to improve the adequacy of benefits. Further, reform packages
and other measures shall be formulated, which simultaneously address the interest of
the stakeholders of SSS: benefit adequacy for current pensioners, and financial
sustainability for future pensioners, who are now active contributors of the SSS.
Actuarial Valuation of the Reserve Fund of Employees’ Compensation (EC)
SSS manages the Employees’ Compensation Program (ECP), which provides social
protection against work-related sickness, injury or death, for private sector workers
and household helpers who are compulsory members of SSS. Starting 2019, self-
employed members were added to the coverage of the program. With the ECP
providing coverage to the same members covered under the SS Law, the Actuarial
Valuation of the Social Security (SS) Fund then serves as basis for the conduct of the
EC Actuarial Valuation. The data, actuarial bases and assumptions, as well as
61
methodology used in the EC Actuarial Valuation are similar to that used in the SS
Actuarial Valuation.
The 2019 EC Actuarial Valuation is the latest conducted valuation, which was used as
basis for the computation of liabilities. This 2019 EC Actuarial Valuation was based on
the 2019 SS Actuarial Valuation.
Similar to the SS Actuarial Valuation, the EC Actuarial Valuation applies the open
group projection method, where members who will join the System in the future are
considered in the projection of revenues and expenditures.
In the transition of the reporting of the financial condition to PFRS 4, the liability for the
EC Fund is computed using the same methodology that was applied to that of the SS
Fund. In particular, the closed group projection approach of gross premium valuation
was applied, where the members that were considered are only those existing
members up to the end of reporting date while continuing their contribution up to a
certain date. The reporting dates considered were December 31, 2019, December 31,
2020, and December 31, 2021.
The 2018 data on SSS employed members and household helpers was used for the
EC Valuation. To apply the closed group methodology in this EC Valuation, new
entrants who enter up to year 2019, 2020 or 2021 were included, as applicable to the
reporting date. Starting 2019, self-employed members were included in the
projections.
The following table presents the computed liability of P22.569 billion as of December
31, 2019, P23.131 billion as of December 31, 2020, and P38.283 billion as at
December 31, 2021, at a discount rate of 6 per cent.
Employees’ Compensation Fund


31, 2019 31, 2020 31, 2021
Insurance Contract
Liability 22.569 23.131 38.283
at 6% discount rate
The comparison of the liabilities computed under the open and closed group projection
methods is presented in the following table.
2019 EC Actuarial Valuation


Year of Reserve Exhaustion Beyond 2080
Year Net Revenue Becomes Negative Beyond 2080
62
Reserves 24.295
Unfunded Liability (13.619)
For the EC Fund, the year of reserve exhaustion is projected to be beyond 2080.
The SBL as of December 31, 2021 is at P38.283 billion, computed using the closed
billion. As expected of a partially funded program, the liability under the closed group
works to the advantage of SSS considering the magnitude of EC membership data.
liability computations. Meanwhile, these projections already incorporated the impact of
SS Act of 2018, coverage of the self-employed, EO No. 33 and EO No. 54.
22.2 Revaluation surplus
Revaluation surplus is the result of revaluation of land under property and equipment.
The balance represents the excess of revaluation/appraisal value over the book value
of the revalued asset. The revaluation surplus amounted to P6.573 billion and P4.046
billion as at December 31, 2021 and 2020, respectively.
22.3 Members’ equity
2021 2020
Mandatory provident fund 15,484,997,775 0
Flexi fund 1,245,784,042 1,164,691,900
PESO fund 132,821,772 117,006,633
16,863,603,589 1,281,698,533
The SSS, in pursuit of its mission under RA No. 11199, otherwise known as the SS Act
of 2018, to promote social justice through savings and advance the value of “work,
save, invest and prosper” and SSC Resolution No. 458-s. 2020 dated September 09,
2020 approved the implementation of the Mandatory Provident Fund (MPF) Program
for SSS members effective January 01, 2021. The program which is known as the
Workers’ Investment and Savings Program (WISP) consists of contributions of
employers and employees, self-employed, OFW and voluntary members, based on
monthly salary credit (MSC) in excess of P20,000 up to the prescribed maximum MSC,
and their earnings. The program aims to provide SSS members with a convenient and
tax-free savings scheme for payment of benefits to such members or their
beneficiaries in addition to the benefits provided under RA No. 11199.
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Members’ equity is also composed of the contributions and guaranteed earnings of
Flexi Fund and PESO Fund members. Guaranteed earnings are computed based on
SSS’ short term peso placement rate or 91-day Treasury Bill rate, whichever is higher
for Flexi Fund, and for PESO Fund, based on the 5-year Treasury Bond rate and 364-
day Treasury Bill rate.
22.4 Cumulative changes in fair value
2020
2021
As restated
Balance, January 1 (23,809,882,311) (31,501,686,059)
Net gain (loss) arising on revaluation of
financial assets at FVTOCI 14,642,207,792 7,691,803,748
Balance, December 31 (9,167,674,519) (23,809,882,311)
The unrealized gain/(loss) from changes in fair value represents the investments
revaluation reserves arising on the revaluation of financial assets that have been
recognized in other comprehensive income.
23. SERVICE AND BUSINESS INCOME
2020
2021
As restated
Members’ contributions 225,648,375,466 205,697,219,568
Interest income 21,164,523,170 21,410,227,409
Dividend income 3,730,308,666 4,005,185,841
Fines and penalties – business income 3,177,763,026 3,549,293,191
Rent/lease income – investment properties 1,183,610,613 1,111,175,653
Income from acquired/foreclosed assets 14,383,180 16,662,136
Management fees 11,647,182 11,016,493
Other business income 383,474,727 606,192,786
255,314,086,030 236,406,973,077
The service and business income for CY 2021 amounting to P255.314 billion was higher
than CY 2020 revenue by P18.907 billion or 8 per cent mainly due to the increase in
contribution rates.
Starting January 1, 2021, the contribution rate increased by one per cent, from the current
12 per cent to 13 per cent. For employed members, including OFW members in countries
with Bilateral Labor Agreements with the Philippines, and sea-based OFW members, the
additional one per cent is divided equally between them and their employers.
Likewise, the minimum MSC was adjusted to P3,000 from P2,000, except for Kasambahay
and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively,
while the maximum MSC was raised to P25,000 from P20,000. The MSC to be considered
for the computation of benefits under the regular social security program is capped at
P20,000.
64
The SSS, as part of its corporate social responsibility, provided the Pandemic Relief and
Restructuring Programs for the benefit of SSS members and employers affected by the
COVID-19 pandemic.
• SSC Resolution No. 444-s.2021 dated September 1, 2021 and pursuant to

Section(4)(a)(1) in relation to Section 22(a) of the Social Security Act of 2018
approved the Pandemic Relief and Restructuring Program 1 - Nationwide
implementation of the extension of deadline of Contributions for applicable month of
July from August 31, 2021 to September 30, 2021.
• SSC Resolution No. 524-s.2021 dated October 13, 2021 and 557-s.2021 dated
November 3, 2021, approved the Pandemic Relief and Restructuring Program 2 –
Condonation of Penalties on Social Security Contributions. Availment period is from
November 2021 to April 2022.
• SSC Resolution No. 466-s.2021 dated September 15, 2021, approved the ECC and
SSS Joint Circular on the Pandemic Relief and Restructuring Program 3 – Enhanced
Installment Payment Program. Availment period is from November 2021 to October
2022.
Interest income is derived from the following SSS investments:
2020
2021
As restated
Bonds investments
FA at FVTPL 1,164,239,309 994,894,400
FA at FVTOCI 2,471,764,720 2,632,154,029
FA at amortized cost 11,543,473,341 13,601,052,759
15,179,477,370 17,228,101,188
Loans and receivables 5,490,060,149 3,489,195,439
Current/savings/term deposits 420,257,963 607,557,372
Time deposits/treasury bills 0 5,645,958
Others 37,617,688 73,542,452
21,127,413,170 21,404,042,409
Other business income includes the following:
2020
2021 restated
Rental/Penalty Income-Operating Assets 8,088,550 10,913,250
Inspection Fees-REL 1,000 0
Pre-Termination Fee-Flexi-Fund 5,209 11,483
Income from ID Replacement 9,571,767 20,142,209
Fire Insurance Premium 4,397,598 5,078,142
Service Fee-Salary Loan 323,487,630 534,887,345
Rebate of management fees 37,922,973 35,160,357
383,474,727 606,192,786
65
24. GAINS
2020
2021
As restated
Gain from changes in fair value of financial
instruments 10,001,098,877 9,958,501,994
Gain from changes in fair value of investment
properties 7,693,934,051 6,651,334,489
Gain on sale/redemption/transfer of
investment 1,127,664,127 1,575,788,085
Gain on sale of investment properties 19,150,928 7,447,765
Gain on sale/disposal of property and equipment 3,181,451 716,809
Gain on foreign exchange (FOREX) 31,796,556 297,636
18,876,825,990 18,194,086,778
Fair value adjustment of financial instruments for CY 2021 at P10.001 billion is higher than
the CY 2020 gain by P42.597 million, mostly due to stock market appreciation of equity
securities.
Investment properties are remeasured at fair value, which is the amount for which the
property could be exchanged between knowledgeable, willing parties in an arm’s length
transaction. Gains or losses arising from changes in the fair value of the investment
properties are included in profit or loss for the period in which they arise.
Gain on sale/redemption/transfer of investments includes realized gain on sale of equity

securities, government securities and NCAHFS.
25. OTHER NON-OPERATING INCOME
2020
2021
As restated
Reversal of impairment loss 1,173,348,799 2,202,817,871
Miscellaneous income 964,835,995 440,536,451
2,138,184,794 2,643,354,322
The SSS considers certain financial assets to have recovered from impairment losses
amounting to P1.173 billion due to the enhanced loan collection efforts and digitalization
initiatives implemented by SSS. Recoveries/reversal of impairment loss are from the
principal, interest and penalties of the following financial assets:
2020
2021
As restated
Member loans 552,365,551 2,021,770,269
Sales contract receivable 285,857,998 859,534
Loan to NHMFC 141,879,813 0
66
2020
2021
As restated
Housing loans 57,668,594 47,994,224
Property and equipment 51,837,287 0
ROPA acquired assets 3,488,532 3,969,481
Collecting banks/agents 3,798,110 10,593,497
Advances – FIP and MRI 2,214,452 1,658,651
Rental receivables 1,323,604 845,304
Other receivables (pension loan, officials &
employees) 200,110 391,813
1,173,348,799 2,202,817,871
Miscellaneous income includes income from car insurance, director’s fees, income from
SSS dormitory and others, with the following details:
2021 2020
Director’s fee 110,973,108 107,181,568
Income from car insurance 2,503 4,287
Income from SSS dormitory 7,500 35,459
Current/Prior Years’ adjustments 853,852,884 333,315,137
964,835,995 440,536,451
The increase in Current/Prior Years’ adjustments amounting to P520.538 million is mainly
due to the reconciliation of previous year's collection of premium contributions from various
collecting partners amounting to P399.467 million but only recognized in CY 2021.
26. BENEFIT PAYMENTS
This account represents payments to members and their beneficiaries in the event of
disability, sickness, maternity, old age, death and other contingencies resulting in loss of
income or financial burden. Total benefit payments amounted to P223.982 billion and
P194.871 billion, with total number of beneficiaries of 36,898,812 and 33,518,048, for CYs
2021 and 2020, respectively, as follows:
2021 2020
Retirement 129,938,540,139 115,440,395,522
Death 63,443,066,863 55,704,638,322
Maternity 13,897,985,503 10,494,277,060
Disability 6,289,747,376 6,430,682,592
Funeral grant 5,294,125,744 3,073,451,260
Sickness 4,042,820,078 2,010,912,997
Unemployment 1,069,857,440 1,709,010,067
Medical services 5,843,329 7,489,404
223,981,986,472 194,870,857,224
Benefit payments of P223.982 billion in CY 2021 is higher than last year’s benefit payments
by P29.111 billion or 14.94 per cent due to an increase in the number of claims and grants
of P20,000 one-time financial assistance to EC pensioners. The COVID-19 pandemic in the
67
country which started in the first quarter of 2020 has prevented most SSS members in filling
out benefit claims in the branches. However, on the latter part of the same year, the
implementation of on-line applications and transactions through the My.SSS facilitated the
timely processing of benefit claims payout.
Administrative Order No. 39-s.2021 dated April 19, 2021, SSC Resolution No. 285-s.2021
dated May 26, 2021, and ECC Board Resolution No. 21-05-19 approved the grant of one-
time financial assistance of P20,000 to EC pensioners in the private sector with at least one-
month permanent partial disability, permanent total disability or survivorship pension from
January 1, 2020 to May 31, 2021.
27. NET CHANGE IN POLICY RESERVES
SSC Resolution No. 123-s. 2021 dated March 10, 2021 approved the adoption of the PFRS
4 in the computation of the ICL for the CY 2020 financial statements and onwards and the
use of the discount rate of six per cent.
Net change in policy reserves for CY 2021 is P872.360 billion representing 77.88 per cent of
the total expenses for the year. This is P410.612 billion or 88.93 per cent more than the CY
2020 provision of P461.748 billion.
2020
Policy Reserves 2021
As restated
Insurance Contract Liability
SSF 7,591,297,256,633 6,734,089,235,597
EC-SIF 38,283,091,820 23,131,055,080
Mortgagors’ Insurance Account (MIA) 4,570,385 5,128,104
7,629,584,918,838 6,757,225,418,781
Net Change
SSF 857,208,021,037 461,186,416,321
EC-SIF 15,152,036,740 561,648,909
MIA (557,720) 51,767
872,359,500,057 461,748,116,997
28. PERSONNEL SERVICES
2021 2020
Salaries and wages 3,493,641,133 2,876,292,103
Other compensation 1,967,953,966 1,599,734,421
Personnel benefit contribution 1,587,516,717 1,552,674,762
Other personnel benefits 677,922,760 740,123,836
7,727,034,576 6,768,825,122
Pursuant to RA No. 10149 which mandates the Governance Commission of GOCCs (GCG)
to develop a Compensation and Position Classification System (CPCS) for GOCCs, and by
virtue of the powers vested in the President of the Philippines, EO No. 150, series of 2021,
was signed and approved by the President on October 1, 2021.
68
Personnel services accounts include the projected amount of P1.06 billion representing the
differentials in basic salaries, mandatory government contributions and year-end pay for the
period October to December 2021 of qualified regular and casual employees in view of the
approval of the CPCS which took effect on October 5, 2021 and on the CPCS Implementing
Guidelines No. 2021-01 dated January 12, 2022 which came out on January 14, 2022.
Personnel benefit contribution includes 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 as provided under Section 4.a.3 of the
RA No. 11199. The affairs and business of the fund are directed, managed and
administered by a Board of Trustees. Upon retirement, death or resignation, the employee
or his heirs will receive from the fund payments equivalent to his contributions, his
proportionate share of the SSS’ contributions and investment earnings thereon.
As at December 31, 2021, SSS has a total of 6,780 regular and casual personnel of which
90 are new employees but net of 292 retired/separated employees.
29. MAINTENANCE AND OTHER OPERATING EXPENSES (MOOE)
2021 2020
General services 415,706,451 298,040,563
Repairs and maintenance 258,895,606 154,298,555
Utility expenses 196,339,897 185,458,788
Labor and wages 173,605,631 271,609,882
Communication expense 134,310,843 119,794,829
Professional expenses 91,317,388 73,451,327
Supplies and materials expenses 54,745,595 84,414,882
Taxes, insurance premiums and other fees 27,214,051 23,044,233
Travelling expenses 23,072,189 34,737,165
Training and scholarship expenses 7,998,374 5,919,432
Awards/Rewards, prizes, and indemnities 2,348,245 58,890
Confidential, intelligence and extraordinary
expenses 1,119,974 1,133,330
Other MOOEs 298,426,713 250,124,722
1,685,100,957 1,502,086,598
Other maintenance and operating expenses consist of the following:
2021 2020
Fees and commission expenses 94,683,581 77,391,199
Subscription expenses 68,193,996 60,371,215
Printing and publication expenses 48,967,906 42,592,396
Transportation and delivery expenses 33,798,606 6,626,774
Advertising, promotional and marketing expenses 19,473,097 29,546,938
Directors and committee members' fees 15,732,412 14,124,861
Membership dues and contributions to 6,176,691 5,966,986
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2021 2020
organizations
Rent/lease expenses 5,992,079 7,457,832
Donations 117,575 0
Other maintenance and operating expenses 5,290,770 6,046,521
298,426,713 250,124,722
30. FINANCIAL EXPENSES
2021 2020
Interest expenses – lease liability 55,992,142 63,740,243
Bank charges 36,825,091 12,481,326
Other financial charges 121,277,321 142,523,100
214,094,554 218,744,669
The SSS recognizes interest expense on the lease liability calculated using the effective
interest method in view of the new accounting standard on leases (see Note 2.14).
Other financial charges represent investment related expenses incurred in connection with
managing the investment properties, broker’s commissions on trading financial assets and
other depository maintenance and off-exchange trade fees. It also includes Flexi Fund and
PESO Fund management fees amounting to P11.647 million and P11.012 million for CY
2021 and CY 2020, respectively.
31. NON-CASH EXPENSES
2021 2020
Losses 11,362,768,311 14,053,746,815
Impairment loss 2,257,440,118 1,891,006,342
Depreciation 614,666,658 511,531,053
Amortization 40,317,779 45,454,897
14,275,192,866 16,501,739,107
The SSS recognizes losses from the following:
2021 2020
Changes in fair value of financial instruments 7,731,406,906 9,732,922,304
Changes in fair value of investment properties 3,166,190,266 3,746,306,187
Sale/Redemption/Transfer of investments 456,332,314 573,056,351
Foreign exchange 6,783,751 1,087,240
Sale/Disposal of PE and other assets 2,055,074 374,733
11,362,768,311 14,053,746,815
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32. ASSISTANCE AND SUBSIDY
The Educational Assistance Loan Program (EALP) is funded on a 50:50 basis from the NG
and SSS. There were no subsidies for EALP received for CYs 2021 and 2020.
The NG counterpart of P3.5 billion was released under Special Allotment Release Order No.
BMB-F-12-0031251 dated December 14, 2012. The total cash allocations released to SSS
from CY 2012 to CY 2018 amounted to P2.828 billion, as follows:
NCA No. Date Amount

2012
BMB-F-12-0023901 December 14, 2012 45,279,995
2013
BMB-F-13-0017483 September 23, 2013 480,771,648
BMB-F-13-0020336 November 11, 2013 278,800,497
759,572,145
2014
BMB-F-14-0005474 May 2, 2014 260,637,040
BMB-F-14-0012071 August 27, 2014 178,052,884
BMB-F-14-0016332 November 10, 2014 332,923,150
771,613,074
2015
BMB-F-15-0005560 April 29, 2015 32,207,250
BMB-F-15-0016231 October 26, 2015 374,662,670
406,869,920
2016
BMB-C-16-0006531 April 28, 2016 64,198,930
BMB-C-16-0016736 September 15, 2016 54,212,150
118,411,080
2017
BMB-C-17-0000790 January 9, 2017 193,867,300
BMB-C-17-0007120 May 17, 2017 72,955,264
BMB-C-17-0015979 October 11, 2017 274,253,486
541,076,050
2018
BMB-C-18-0019433 September 17, 2018 185,357,643
2,828,179,907
33. LEASE COMMITMENTS
SSS as lessee
The SSS leases offices for its various branches under cancellable operating lease
agreements. The leases have varying terms, escalation clauses, and renewal rights. The
extension option is exercisable up to one year after the lease period has expired as running
from month-to-month with the same terms and conditions as stipulated. On the other hand, if
71
either party desires to terminate prior to expiration of the lease period, the desiring party
shall inform the other party in writing of such intention at least 60 days before the intended
termination date. There are no residual value guarantees and sale and leaseback
transactions in the lease agreement.
Out of the 310 local and foreign branches, 136 offices located in various locations are rent-
free. As at December 31, 2021 and 2020, the total lease payment made amounted to
P248.855 million and P228.551 million, respectively (see Notes 15 and 29). Further, there
are no sublease agreements made and no occurrences of contingent rent.
SSS as lessor
The SSS leases out a portion of its office space to various tenants under cancellable
operating lease agreements and the minimum lease rental amounts to at least P3,920 per
month. The leases have varying terms, escalation clauses and renewal rights. A renewal
option is available to the lessee who shall give written notice of its intention to renew at least
60 calendar days prior to the expiration of the lease period. If the lessee continues in the
occupation of the leased premises with the consent of the lessor after the term, said
extension of the contract shall be understood as running from month-to-month basis under
the same terms and conditions stipulated in the agreement, but the monthly rental shall all
be escalated based on the SSS leasing guidelines. For the pre-termination terms, either
party may pre-terminate the lease for any reason, provided that the party who initiates the
pre-termination shall inform the other party in writing at least 60 calendar days before the
intended date of termination. In case the lessee voluntarily pre-terminates the lease
agreement, the lessee shall pay the SSS a pre-termination fee to be deducted from the
security deposit.
Total rental income earned as at December 31, 2021 and 2020 amounted to P1.205 billion
and P1.137 billion, respectively, details as follows:
2021 2020
Investment properties 1,183,610,613 1,111,175,653
Leased acquired/foreclosed assets 13,648,203 16,395,604
Operating assets 7,775,572 9,513,537
1,205,034,388 1,137,084,794
34. RELATED PARTY DISCLOSURES
As at December 31, 2021, the composition of the Social Security Commission (SSC) is as
follows:

1. Ex-Officio Chairperson Carlos G. Dominguez III Secretary, Department of Finance
2. Vice-Chairperson Aurora C. Ignacio President & CEO, SSS
3. Ex-Officio Member Silvestre H. Bello III Secretary, DOLE
4. Member Michael G. Regino Representing the Workers’ Group
5. Member Ricardo L. Moldez Representing the Employers' Group
6. Member Diana Pardo-Aguilar Representing the Employers' Group
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7. Member Anita Bumpus-Quitain Representing the Workers' Group
8. Member Manuel L. Argel, Jr Representing the Employers' Group
9. Member Bai Norhata Macatbar Representing the Workers' Group
Alonto
Key Management Personnel Remuneration and Compensation
The management personnel of SSS are the President and CEO, Executive Vice President
and Senior Vice Presidents of the operating and support groups. The remunerations of key
management personnel during the year are as follows:
2021 2020
Salaries 32,200,430 29,303,046
Other allowances and benefits 25,553,472 20,829,907
57,753,902 50,132,953
Meanwhile, the total remuneration received by the Board of Commissioners amounted to

P17.067 million and P19.799 million for CYs 2021 and 2020, respectively.
35. RESTATEMENT
The following tables summarizes the effect of prior period adjustments and reclassification of
assets.
a. Effect on the Statement of Financial Position
December 31, 2020
Effect of
reported
reclassification
1. Interest Receivable 3,942,978,871 20,912,032 3,963,890,903
2. FA at AC - Debenture Bonds - 3,213,170,775 3,213,170,775
3. FA at FVTOCI - CNB-Cnotes 2,338,750,686 (2,338,750,685) 1
4. Non-current Interest Receivable
CNB-Cnotes 120,443,595 (114,281,677) 6,161,918
5. Accumulated Impairment Loss –
Interest Receivable CNB-Cnotes (120,443,594) 114,281,677 (6,161,917)
6. Non-current Receivable Gov
Agencies/Corp-PhilGuarantee 0 1,600,000,000 1,600,000,000
Debenture Bonds 0 2,374,865,446 2,374,865,446
Receivable 0 6,185,0000 6,185,000
9. Gain on sale/redemption/transfer of
investment 1,162,471,020 413,317,065 1,575,788,085
10. Unrealized Gain/(Loss) FVTOCI-
CNB-Cnotes 410,490,701 (413,317,065) (2,826,364)
11. Reserve Fund (6,109,188,630,052) 2,908,649,188 (6,106,279,980,864)
12. Loans and Receivable Accounts
Receivable – CB/CA 0 667,306,566 667,306,566
Non-current Receivable – CB/CA 0 316,447,220 316,447,220
Non-current Receivable – CB/CA 0 (129,471,100) (129,471,100)
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December 31, 2020
Effect of
reported
reclassification
13. Other Receivable
Receivable – CB/CA 667,306,566 (667,306,566) 0
Non-current Receivable – CB/CA 316,447,220 (316,447,220) 0
Non-current Receivable – CB/CA (129,471,100) 129,471,100 0
14. Financial Liabilities 4,631,585,479 (156,254,268) 4,475,331,211
15. Lease payable 0 156,254,268 156,254,268
b. Effect on the Statement of Comprehensive Income

December 31, 2020
Effect of
reported
reclassification
1. Interest Income 19,029,176,963 2,381,050,446 21,410,227,409
2. Gain on Sale/Redemption/ Transfer
of Investments
Gain on S/D of FVTOCI-CNB-
Cnotes 0 413,317,065 413,317,065
3. Reversal of Impairment Loss
Recovery of Imp Loss IRFVTOCI-
CNB Cnotes 0 114,281,677 114,281,677
36. FINANCIAL RISK MANAGEMENT
SSS manages the existing and emerging risks across the entire organization. These risks
can be divided into four principal risk categories: Financial Risks, Insurance & Demographic
Risks, Strategic Risks and Operational Risks. To provide a systematic method of addressing
these risks, the SSS established and adopted an Enterprise Risk Management (ERM)
approach. ERM is a continuous, proactive and integrated process used to identify, assess
and manage risks across all areas and at all levels of the organization. This will ensure the
alignment of strategic planning and risk management.
Under ERM, SSS implements a risk management process that is carried out in five phases –
(1) strategic plan, (2) risk identification and analysis, (3) risk measurement, (4) risk control
and treatment and (5) risk monitoring and reporting. The process runs in a continuous cycle
to improve the management system by incorporating the lessons learned and feedback of
stakeholders. It is conducted across the entire organization throughout the year in all of its
day-to-day operations.
The SSS ERM has seven key components, as follows:
Seven Components of SSS’ ERM
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1. Corporate Governance – to ensure that the SSC and the Management have
established the appropriate organizational process and corporate controls to measure
and manage risk across the organization.
SSS has established a Risk Management Committee (RMC) responsible for the
adoption and oversight of risk management program of the System, in accordance
with the guidelines prescribed by the GCG. It also created the Risk Management
Division (RMD), under the Actuarial and Risk Management Group (ARMG), which is
responsible for ensuring that risk policies are in place among SSS units.
2. Line Management – to integrate risk management into the investment as well as

operational activities of the organization.
RMD conducts series of meetings and workshops to explain the concept of risk and
describe the risk management process – ISO 9001:2015 Seminar/Workshop on Risk-
based Thinking for all SSS Employees.
3. Portfolio Management – to aggregate risk exposures, incorporate diversification

effects, and monitor risk concentrations against established risk limits.
RMD together with the Investments Sector (IS) implements certain limits for SSS
investments. These are debt and equity limits, Value-at-Risk (VaR) limits, Market-to-
Acquisition Ratio (MAR) limits, banking sector limits, real property and real estate
related investments limits and other industry limits. Also, IS units have established
their internal limits for each SSS investment asset (e.g., limit per broker, trading limit
per day, allocation for each asset, limit per trader, etc.).
4. Risk Transfer – to mitigate risk exposures that are deemed too high or are more cost-
effective to transfer out to a third party than to hold in the organization’s risk portfolio.
SSS transfers risks through acquisition of insurances to mitigate risk exposures that
are deemed too high, which is consequently more cost-effective than to hold in the
System’s risk portfolio. Insurance policies acquired by SSS include fire insurance for
SSS properties, Directors’ and Officers’ Liability Insurance (DOLI) for SSC and the
Management and Credit Group Life Insurance (CGLI) for SSS pensioners who availed
of the Pension Loan Program.
5. Risk Analytics – to provide risk measurement, analysis and reporting tools to quantify
the organization’s risk exposures as well as track external drivers.
SSS monitors various risk metrics using risk management tools that are developed for
the analysis and assessment of risks, which help in the formulation of appropriate
mitigating measures. Examples of risk management tools are VAR, MAR, Stop Loss/
Cut Loss, etc.
6. Data and Technology Resources – to support the analytics and reporting processes.
Currently, RMD manually encodes in its internal database and processes through
aggregation various risk-related data from different SSS units using Macro-embedded
75
program in MS Excel. Risk metrics are programmed in MS Excel to generate risk
reports.
7. Stakeholder Management – to communicate and report the organization’s risk

information to key stakeholders.
RMD, as part of its risk reporting function, presents identified risks, both existing and
emerging, and corresponding action plans during Management Review meetings. A
document regarding how SSS manages its risks is published on the SSS website
under the Transparency Seal.
The SSS’ RMD developed four risk manuals – Financial Risk Management Manual,
Insurance and Demographic Risk Management Manual, Strategic Risk Management
Manual and Operational Risk Management Manual – that provide a common and
systematic approach for managing risks. Each manual contains all risk management
tools, policies and procedures that were approved by the SSC and proposed by the
RMD. The risk management tools, policies and procedures currently utilized by SSS to
manage the four principal risk categories, are discussed below.
36.1 Financial Risks
Financial Risks refers to the potential losses due to changes in external markets,
prices, rates and liquidity supply and demand.
The SSC and Management are active in the evaluation, scrutiny and credit approval
process on all investments being undertaken by the SSS. The SSC has adopted
adequate policies on investment procedures, risk assessment and measurement and
risk monitoring by strict observance on the statutory limit provided under the SS Act of
2018 and compliance to the investment guidelines. Internal controls are also in place
and a comprehensive audit is being done by Internal Audit Services.
1. Market Risk
Market Risk is the risk of SSS investments declining in value because of

economic developments or other events that affect the entire market. This risk
arises from (i) fluctuations in market prices of equities due to changes in demand
and supply for the securities (Equity Price Risk), (ii) changes in SSS’ investment
value due to a change in the absolute level of interest rates, in the spread
between two rates, in the shape of the yield curve or in any other interest rate
relationship (Interest Rate Risk) and (iii) fluctuations in exchanges rates due to
changes in global and local economic conditions and political developments that
affect the value of SSS’ foreign-denominated investments (Foreign Currency
Risk).
SSS strictly adheres to the provisions of Section 26 of the SS Act of 2018, which
states that the funds invested in equities, corporate notes/bonds, loans, mutual
funds and other financial instruments shall earn an annual income not less than
the average rates of treasury bills or any acceptable market yield indicator. Also,
SSS developed risk management tools to monitor and mitigate market risks, these
are:
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a. Value-at-Risk (VaR) – a risk management tool used to measure the equity
portfolio’s maximum loss under normal market movements for a specified
time interval and at a given confidence level. Alternatively, it measures the
minimum loss of a portfolio under extreme market movements. Daily VaR
estimates are monitored daily and compared to their limits.
The VaR limit is designed to restrict potential loss to an amount tolerable by

the Management, given the daily investment exposure on a trading portfolio.
It is a general limit that incorporates a wide array of risks but encapsulates the
quantification of these risks to a single number.
b. Market-to-Acquisition Ratio (MAR) – a risk indicator that measures the

percentage of the asset or portfolio’s daily market value relative to its
acquisition cost. The MAR values range from zero to positive infinity. MAR
values lower than 100 per cent indicate unrealized losses while values
greater than 100 per cent indicate unrealized gains.
The daily MAR values were translated into colors to indicate the magnitude of
risks on the portfolio. These MAR values are visually represented using a
MAR Heat Map.
c. Stop Loss /Cut Loss Program – a disciplined/programmed divestment of

losing stocks triggered by certain conditions (e.g., technical analysis / optimal
portfolio recommendations, dividend yield etc.) until all subject shares have
been fully divested for the primary purpose of limiting losses to the equity
portfolio.
2. Credit Risk
Credit risk refers to the risk of an economic loss from the failure of counterparty to
fulfill its contractual obligations or from the increased risk of default during the
term of the transaction. This includes risk due to (i) SSS debtor’s incapacity or
refusal to meet debt obligations, whether interest or principal payments on the
loan contracted, when due (Default Risk); (ii) taking over the collateralized or
escrowed assets of a defaulted SSS borrower or counterparty (Bankruptcy Risk);
(iii) potential for a loss in value of an SSS investment portfolio when an individual
or group of exposures move together in an unfavorable direction (Concentration
Risk); (iv) deterioration of perceived credit creditworthiness of the borrower or
counterparty (Downgrade Risk) and (v) failure of a counterparty to deliver a
security or its value in cash when the security was traded after SSS have already
delivered security or cash value, as per the trade agreement (Settlement Risk).
77
SSS implements structures and standardized evaluation guidelines, credit ratings
and approval processes. Investments undergo technical evaluation to determine
their viability/acceptability. Due diligence process (credit analysis, evaluation of
the financial performance of the issuer/borrower to determine financial capability
to pay obligations when due, etc.) and information from third party are used to
determine if counterparties are creditworthy.
To avoid significant concentrations of exposures to specific industries or group of

issuers and borrowers, SSS investments are regularly monitored against
prescribed cumulative ceilings specified in Section 26 of SS Law.
The following table shows the maximum credit risk exposure and aging analysis of
the SSS financial assets with past due as at December 31, 2021 and 2020.
2021
Neither
past due Over
nor 60
impaired
(In Million Pesos)
cost
Corporate notes and bonds 25,717 40 25,757
Government notes and bonds 219,470 219,470
Loans and receivables:
NHMFC 6,379 3,187 9,566
PGC 400 100 1,100 1,600
Housing loans 227 31 7 7 3 43 340 754 1,412
Member loans 26,148 31,965 16,703 5,873 22,145 9,461 112,295
Rental receivable 91 3 175 269
5 64 69
loans
Program MADE 17 17
479,577 32,106 17,828 19 5,885 22,207 6,769 13,821 578,212
2020
Neither
past due Over
nor 60
impaired
(In Million Pesos)
cost
Corporate notes and bonds
Government notes and bonds 31,363 110 31,473
Loans and receivables: 170,967 170,967
NHMFC 6,357 3,329 9,686
PGC 500 1,100 1,600
Housing loans 258 62 18 21 90 301 811 1,561
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2020
Neither
past due Over
nor 60
impaired
(In Million Pesos)
Member loans 37,512 26,308 17,182 7,897 21,334 7,940 118,173
Rental receivable 23 163 186
5 64 69
loans
Program MADE 17 17
417,447 27,496 17,208 25 7,900 21,435 6,684 12,840 511,035
To further ensure compliance with Section 26 of SS Act of 2018, Policies and

Guidelines in Determining and Managing Exposure Limits to Debt and Equity
were established. The investment limits for Conglomerate/Group, Individual
Corporation, Individual Corporation’s Debt and Individual Corporation’s Equity are
determined based on two principles: Investment Reserve Fund (IRF) forecast-
based principle and risk-based principle.
For the IRF forecast-based principle, the following are the limit ceilings as portion
of IRF forecast, where the IRF forecast is computed from the previous year’s IRF
plus 90 per cent of the current year’s target net revenue:
10% for Conglomerate/Group

4% for Individual Corporation
3% for Individual Corporation’s Debt
3% for Individual Corporation’s Equity
The risk-based principle for computing investment limits is based on the

company’s value and its credit score.
Individual Corporation
Factors
Debt Equity
Corporation’s Value Three times the Unimpaired 10% of the Market Value of
Capital of the Corporation Total Issued and Outstanding
Shares of the Corporation
Risk Measure Merton Distance-to-Default Altman Z-Score
With respect to stockbrokers, the SSS has adopted the following mitigating
measures:
a. Minimum requirements for stockbroker evaluation
a.1. Stockbroker must be registered with the Securities and Exchange

Commission (SEC) and a member of good standing of the Philippine
Stock Exchange (PSE) as defined under Section 28 of the Securities
Regulation Code (SRC).
79
a.2. The stockbroker must belong to the top thirty (30) in terms of cumulative
value of transactions during the past three years and the latest available
PSE data for the current year will be considered. Provided, however,
that the number of accredited stockbrokers shall not exceed thirty-five
(35).
a.3. The stockbroker must be in operation for at least five years and must be
profitable for three years in these five years of operation. Provided that
the stockbroker must be profitable for at least one year in the last two
years prior to the application for accreditation.
a.4. The stockbroker must have a minimum unimpaired paid-up capital of

one hundred million pesos (P100 million), or the minimum capitalization
required by the SEC, whichever is higher.
a.5. The stockbroker shall have a positive track record of service from at
least three institutional clients.
a.6. The stockbroker’s management team and personnel must be duly

licensed by the PSE, SEC, Philippine Depository & Trust Corporation
and other relevant regulatory agencies.
b. Stockbroker transactions, allocations and limits
b.1. Total daily transactions, excluding block transactions, per stockbroker

shall not exceed 50 per cent of the stockholder’s equity of stockbrokers.
(Limit settlement risk)
b.2. Total transactions, excluding negotiated block transactions, for each of

the accredited stockbrokers, during the accreditation period, shall not
exceed the higher between one over the number of active accredited
stockbrokers × 100 per cent and 15 per cent of total SSS transactions.
b.3. The initial recommendation for allocation of transactions shall be

determined based on the results of evaluation for stockbroker
accreditation. Subsequent recommendations for allocation shall be
based on the monthly performance ratings.
b.4. Transactions, excluding negotiated block transactions, with the SSS by

the stockbroker within the year of accreditation, shall not exceed 40 per
cent of its total market transactions. This ensures that SSS is not its
only client.
3. Liquidity Risk
Liquidity risk refers to the risk that a company may be unable to meet short-term
financial demands. This usually occurs due to the inability to convert a security or
hard asset to cash without a loss of capital and/or income in the process. This risk
also refers to (i) unanticipated changes in liquidity supply and demand that may
affect SSS through untimely sale of assets, inability to meet contractual
obligations or default (Funding Liquidity Risk) and (ii) the possibility that an
institution will not be able to execute a transaction at the prevailing market price
80
because there is temporarily no appetite for the deal on the other side of the
market (Trading Liquidity Risk).
SSS manages this risk through daily monitoring of cash flows in consideration of
future payment due dates and daily collection amounts. The SSS also maintains a
sufficient portfolio of highly marketable assets that can easily be liquidated as
protection against unforeseen interruption of cash flow.
To ensure that investments in Marketable Securities shall be compliant with the

basic principles of safety, liquidity and yield and shall benefit as many members
as possible of the System, SSS only invests in shares of stock and equity-related
issues that satisfy its stock accreditation guidelines.
Also, the RMD developed a Risk Dashboard to provide the Management with a
bird’s-eye view of the financial risks that SSS is facing. This dashboard will help
the Management in identifying the issues that may arise from the cumulative
impact of risks over time. It consists of risk reports like VaR, MAR Heat Maps,
Ageing Reports, and Limit Monitoring, which are presented in tabular and
graphical form. RMD also conducts validation, back testing and stress testing on
risk models used by the Investments Sector to ensure effectiveness and reliability
of models.
4. Reinvestment Risk
This is the risk that an investor will be unable to reinvest cash flows (e.g., coupon
payments) at a rate comparable to the current investment’s rate of return. The
term also sometimes refers to the risk that principal repayments on such security
may be paid prior to maturity, thereby forcing the asset manager to seek
reinvestment of principal at a time when interest rates may be lower than the rate
that was payable on the security.
5. Asset-Liability Mismatch Risk
This is the risk of a change in value from a deviation between asset and liability
cash flows, prices or carrying amounts, caused by a change in actual cash flow,
change in expectations on future cash flows and accounting inconsistencies.
6. Inflation Risk
This is the risk of a loss in purchasing power because the value of the
investments does not keep up with inflation.
7. Systemic Risk
This is the risk of potential failure of one institution to create a chain reaction or
domino effect on other institutions and consequently threaten the stability of
financial markets and even the global economy.
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36.2 Insurance and Demographic Risks
Insurance and demographic risks refer to the potential loss arising from variation in
pension fund, claim experience and exposure to adverse persistency, and uncertainty
in demographic assumptions when the benefits were designed and valued. This risk
also refers to the following:
1. Longevity Risk
The risk that SSS pensioners live longer than expected leading to higher expected
payouts.
2. Mortality Risk
The risk due to changes in actual mortality rates that adversely differ from
assumptions.
3. Morbidity Risk
The risk due to deviations of actual mortality rates that adversely differ from
assumptions.
4. Claims Inflation
The risk is due to an increase in the total amount of claims over time.
SSS manages these risks through regular conduct of actuarial valuation/studies and
monitoring of experiences. There are also mitigating measures to control SSS
members’ anti-selection practices, such as when a person who has better information
on products and/or services selectively uses it to gain personal advantage at the
expense of the provider or another party. For example, SSS only allows self-employed
members and voluntary members, including Overseas Filipino Workers (OFWs) aged
55 years old and above, to increase their monthly salary credit (MSC) brackets once in
a given year but only one salary bracket from the last posted MSC. This is to control
the practice of abruptly increasing one’s monthly salary credit near retirement to
increase expected pension.
36.3 Strategic Risks
Strategic risk arises from unanticipated changes in key elements of strategy

formulation and/or execution leading to actual strategic outcomes that adversely differ
from expectations. This risk also refers to the following:
1. Governance Risk
This risk arises from government not functioning as expected.
2. Political Risk
This is the risk of loss in investment returns due to political changes or instability.
82
3. Strategic Relationship Risk
This is due to unexpected changes in strategic relationships such as joint

ventures/partnerships.
4. External Relations Risk
This risk is due to unanticipated changes in relationships with external

stakeholders such as the public, media, regulators, rating agencies and
politicians.
5. Legislative and Regulatory Risk
This risk is due to changes in laws/government regulations.
6. Economic Risk
This risk arises from unanticipated changes in the economy such as changes in
consumer disposable income affecting the ability to pay contributions or loan
balances.
7. Strategic Asset Allocation Risk
This is the risk that the strategic asset allocation is not expected to deliver a
particular agreed target return, i.e., the target returns and how the assets are
invested to deliver this return are not in sync.
SSS manages these risks by creating harmonious relationships with various

stakeholders, monitoring new and pending bills, and conducting regular economic
research/studies to craft appropriate policies beneficial to the System and its
members. Also, SSS implemented the No Gift Policy, No Noon Break Policy, Anti-
Fixer Campaign and No Smoking Campaign which will enhance its image as a
government institution.
36.4 Operational Risks
Operational risk refers to potential loss, whether direct or indirect, due to ineffective
and inefficient internal processes, human resource failures, system failure or external
events. This risk includes the following:
1. Internal Fraud Risk

property or circumvent regulations, the law or company policy, excluding
diversity/discrimination events, which involves at least one internal party.
2. External Fraud Risk

property or circumvent the law, by a third party.
83
3. Employment Practices and Workplace Safety Risk
These are potential losses arising from acts inconsistent with employment, health
or safety laws or agreements from payment of personal injury claims or from
diversity/discrimination events.
4. Clients, Products and Business Practices Risk
These are potential losses arising from unintentional or negligent failure to meet a
professional obligation to specific clients (including fiduciary and suitability
requirements), or from the nature or design of a product or service.
5. Damage to Physical Asset Risk
These are potential losses arising from loss or damage to physical assets from
natural disasters or other events.
6. Business Disruption and System Failure Risk
These are potential losses arising from the disruption of business or system
failures due to unavailability of infrastructure or IT.
7. Execution, Delivery and Process Management Risk
These are potential losses from failed transaction processing or process

management, from relations with trade counterparties and vendors.
SSS monitors these risks by conducting regular Risk and Control Self-Assessment
(RCSA) throughout the System. RCSA provides insights on risks in each SSS unit,
existing and/or emerging. Identified operational risks through RCSA are consolidated
in a risk report, which is presented in Risk Management and Investment Committee
(RMIC) meetings. Actual risk incidences are reported as well.
Through RCSA, SSS units become more aware of the risks present in their day-to-day
operations. As such, they are able to identify gaps and ineffective controls and come
up with sensible action plans to minimize possible loss and damage. The progress of
the action plans is periodically monitored and reported.
Below are some of the risk management tools used to address operational risks:
a. Privacy Impact Assessment – SSS conducts Privacy Impact Assessment (PIA) to

evaluate privacy impacts in all processing systems – existing, new and
enhancements. The PIA takes into account the nature of personal data to be
protected, threshold analysis, personal data flow, stakeholder engagement and
risks to privacy and security in each processing system.
b. Directors’ and Officers’ Liability Insurance – SSS has been providing its
Commissioners and Executives with an indemnity coverage to afford SSS, SSC
and its Management the means to pursue their fiduciary duties and obligations to
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always act in the best interest of the System, with utmost good faith in all their
dealings with the property and monies of SSS.
c. Personal Equity Investment Policy – SSS promotes high standards of integrity and
professional excellence among its officers and employees in the investment of the
Reserve Funds as provided under its Charter through regular monitoring and
regulating the official and personal transactions and activities related to equity
investments of concerned SSS officers and employees and the establishment of a
disclosure mechanism for their personal equity investments.
d. Business Continuity Management Plan – Currently, the SSS trains its employees
to be prepared against natural and manmade calamities through regular conduct
of disaster preparedness programs, e.g. fire drill, earthquake drill, back-up and
recovery of systems. For long-term preparation, the SSS has created a Disaster
Control Group that is responsible for planning strategies and mechanisms to
provide continuous delivery of services to the public amidst any disruption in
operations caused by disasters. Also, SSS has created a Technical Working
Group to develop a comprehensive Business Continuity Management Program for
SSS to ensure continuity of critical member services, swift return to normal
operations and reduce possible loss on the onset of a disruption.
37. EVENTS AFTER THE REPORTING PERIOD
The Compensation and Position Classification System (CPCS) for GOCCs Implementing
Guidelines No. 2021-01 dated January 12, 2022 was issued in pursuant to EO No. 150,
series of 2021, which was approved by the President of the Philippines on October 1, 2021.
The projected increase in salaries/benefits including mandatory deductions to all qualified
regular and casual employees in the total amount of P1.06 billion was accrued in the
reporting period.
The approval of the following policies and guidelines after the reporting period are
considered non-adjusting events, hence disclosed accordingly.
• On January 12, 2022, the SSC under Resolution No. 10-s. 2022 approved the
implementation of one-time sixty (60)-day refund of monthly pension loan payments
under the SSS Pension Loan Program. The mandatory one-time 60-day grace
period shall apply only to loans that are existing, current and outstanding upon
effectivity of the Bayanihan Act, which is September 15, 2020.
• The SSS, in pursuit of its mission under Republic Act No. 11199, otherwise known as
the Social Security Act of 2018, to promote social justice through savings and
advance the value of “work, save, invest and prosper”, proposes to establish a New
Voluntary Provident Fund (NVPF) Program. The program aims to encourage SSS
members to participate in an affordable, flexible, convenient and tax-free savings
scheme. Implementation date is expected in the second quarter of 2022.
• On January 26, 2022, the SSC under Resolution No. 50-s.2022 approved the
extension of the deadline of remittance of contributions by employers (Business and
Household Coverage and Collection Partners (CCPs) and Individual Members (self-
employed, land-based overseas Filipino workers, voluntary members and non-
85
working spouses) in view of the Proclamation No. 1267 dated December 21, 2021,
declaring a State of Calamity in Regions IV-B (MIMAROPA), VI (Western Visayas),
VII (Central Visayas), VIII (Eastern Visayas), X (Northern Mindanao), and XIII
(CARAGA) due to Typhoon Odette.
Type of Payor Deadline of Remittance

Employers (including Household Contributions for the applicable months of
Employers) November 2021 and December 2021 may be
CCPs, Self-employed, Land- Contributions for the applicable months of

based OFW, Voluntary members October, November and December 2021 or
and Non-working spouses the fourth quarter of the Year 2021 may be
• Pursuant to the provision of existing laws, Michael Gonzales Regino was appointed
as the new President and Chief Executive Officer of the Social Security System, vice
Aurora C. Ignacio, by President Rodrigo R. Duterte with appointment letter dated
March 4, 2022 from the Office of the President of the Philippines, Malacañang. The
Oath of Office was held on March 9, 2022.
• On January 31, 2022, SSS through the Office of the Solicitor General (OSG) filed
Motion for Reconsideration (MR) to the Supreme Court (SC) First Division, seeking
to reverse and set aside the Decision dated July 6, 2021 issued by the SC docketed
as G.R. No. 249337 entitled Waterfront Philippines Inc. (WPI), Wellex Industries Inc,
(WII) and Wellex Group Inc. (WGI) vs Social Security System. A copy of decision of
the SC First Division was received by SSS on January 5, 2022, the dispositive
portion of which, reads:
WHEREFORE, premises considered, the petition is GRANTED. The August
30, 2019 Decision of the Court of Appeals in CA-G. R. CV No. 104941 is
REVERSED and SET ASIDE. In lieu thereof, a new one is ENTERED
decreeing as follows:
The October 28, 1999 Contract of Loan with Real Estate Mortgage with
Option to Convert to Shares of Stock, and all accessory contracts
appurtenant thereto are DECLARED null and void;
The Certificate of Sale dated September 9, 2003 is DECLARED null

and void; The parties are hereby ordered, in mutual restitution, to return
what has been received under the Contract of Loan with Real Estate
Mortgage and Option to Convert to Shares of Stock, together with any
income, fruits or dividends therefrom, as follows:
1. Waterfront Philippines, Inc. is ORDERED to PAY Social Security

System P375,000,000.00 subject to twelve percent (12%) legal interest
from October 28, 1999 to June 30, 2013, and six percent (6%) legal
interest from July 1, 2013 until full payment;
2. Social Security System is ORDERED to:
86
a. RETURN to Waterfront Philippines, Inc. the amount of
P35,827,695.87, subject to a legal interest of twelve percent (12%) from
the dates that the individual payments were remitted until June 30,2013,
and six percent (6%) legal interest from July1, 2013 until full payment;
b. RECONVEY to Wellex Industries, Inc. the properties covered by

Transfer Certificate of Title Nos. N-153395 and N-153396, with all the
income derived from said properties;
c. RETURN to Wellex Industries, Inc. the original copies of Transfer

Certificate of Title Nos. N-153395 and N-153396;
d. RETURN to Wellex Group, Inc. the stock certificates representing

235,000,000 shares of Waterfront Philippines, Inc. with the fruits and
dividends received therefrom;
e. RETURN to Wellex Industries, Inc. the stock certificates

representing the 80,000,000 shares of WII with the fruits and dividends
therefrom;
f. Any income earned from the properties covered by Transfer

Certificate of Title Nos. N-153395 and N-153396, and any dividends
received from the stock certificates, must be returned with legal interest
of twelve percent (12%) from October 28, 1999 to June 2013, and six
percent (6%) legal interest from July 1, 2013 until full payment.
38. OTHER MATTERS
Commitments
Amount authorized but not yet disbursed for capital expenditures as at December 31, 2021
is approximately P1.107 billion.
39. COMPLIANCE WITH TAX LAWS
Presented under the following table is the supplementary information which is required by
the Bureau of Internal Revenue under Revenue Regulations No. 15-2010 to be disclosed as
part of the notes to financial statements. This supplementary information is not a required
disclosure under PFRS.
The SSS is withholding and remitting to the BIR applicable taxes withheld imposed under
the National Internal Revenue Code and its implementing rules and regulations. Income
taxes withheld on compensation and expanded withholding tax are remitted on or before the
15th day of the following month except those withheld for the month of December which are
remitted on or before the 20th day of January of the following year. Value-added taxes and
final income taxes withheld are remitted on or before the 10th day of the following month.
87
Amount
Taxes paid as at December 2021
Expanded 39,616,003
Final tax 1,174,724
Taxes withheld as of December 2021 and remitted in Jan 2022

Expanded 10,714,170
Final tax 287,533
593,359,952
The SSS is exempted from all kinds of taxes pursuant to Section 16 of RA No. 11199 which
states that
“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
but 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.”
Under Section 86 item q. of RA No. 10963, otherwise known as the “Tax Reform for
Acceleration and Inclusion” (TRAIN) Law, effective January 1, 2018, SSS exemption on VAT
has been repealed.
40. STATUS OF LAWSUITS
The SSS is involved as a party in several legal proceedings pending resolution that could
materially affect its financial position. Among these lawsuits are the following:
88
Description Amount Status
Expropriation case filed by the 1.461 billion Awaiting Order from Regional Trial
National Grid Corporation of Court (RTC) on the NGCP’s Motion to
the Philippines (NGCP) on Withdraw Complaint and Provisional
60,872 square meters portion Deposit.
of SSS property at Pasay City
(Site 2 FCA 7)
Civil case for Sum of Money 1.151 billion A motion for reconsideration was filed
with Damages filed against on January 31, 2022 on the Supreme
Waterfront Philippines, Inc. Court Decision dated July 6, 2021,
(WPI) which was received by SSS on January
5, 2022 (see Note 25).
Quieting of title filed by 83.586 million DDII to execute the Deed of Sale over
Desiderio Dalisay Investment, the properties in favor of SSS and
Inc. (DDII) – “Dacion en Pago” surrender the Owner’s Duplicate of
(Cabaguio Ave. cor. Del Pilar Transfer Certificate of Title (TCT) Nos.
Street, Brgy. Agdao Proper, T-18203, T-18204, T-255986 and T-
Agdao, Davao City) 255985, as well as the Tax declarations
over the said properties.
SSS to re-compute petitioner’s

obligations, accordingly, reckoned from
June 17, 1982, the date when
respondent communicated its
acceptance of the offer.
SSS Davao was requested to inquire

from the RTC of Davao City, Branch 14,
whether the records of the case have
already been remanded by the SC.
This is preparatory for OSG/SSS to file
Motion for Execution of Judgment.
Civil case for Sum of Money 84.515 million Pending with RTC – Branch 61, Makati
filed by Pryce Corporation on City.
One Time Maintenance
Adjustment Charge (MAC) on Discussion for settlement in on-going.
SSS owned memorial lots
89

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SOCIAL SECURITY SYSTEM

STATEMENTS OF FINANCIAL POSITION

TOTAL ASSETS 702,402,133,543 642,489,442,394

LIABILITIES AND EQUITY

TOTAL LIABILITIES 7,639,270,505,535 6,767,251,364,237

TOTAL LIABILITIES AND EQUITY 702,402,133,543 642,489,442,394

The Notes on pages 9 to 89 form part of these financial statements.

Certified true copy:

NET INCOME/(LOSS) (843,913,812,668) (424,365,955,540)

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE LOSS (826,949,245,913) (416,594,138,679)

The Notes on pages 9 to 89 form part of these financial statements.

Certified true copy:

BALANCE AT JANUARY 1, 2021 (6,106,279,980,864) 4,046,242,799 1,281,698,533 (23,809,882,311) (6,124,761,921,843)

BALANCE AT JANUARY 1, 2020 (5,681,272,001,318) 4,046,242,799 1,038,891,527 (31,501,686,059) (5,707,688,553,051)

CHANGES IN EQUITY FOR 2020

The Notes on pages 9 to 89 form part of these financial statements.

Certified true copy:

Note 2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES

Members' contribution 235,585,266,359 208,959,277,135

CASH FLOWS FROM INVESTING ACTIVITIES

Loan releases and other investment purchases, net (30,058,314,548) (26,483,852,613)

CASH FLOWS FROM FINANCING ACTIVITIES

Corporate operating budget of:

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 535,961,605 (902,128,908)

The Notes on pages 9 to 89 form part of these financial statements.

Certified true copy:

The Social Security System (SSS) is an independent and accountable government-owned

Pursuant to Sections 9 to 11 of RA No. 11199, coverage in the SSS shall be compulsory

The ECC is a quasi-judicial corporate entity created to implement the Employees’

SSS* EC-SIF Total

Total Assets 657,486,431,459 44,915,702,084 702,402,133,543

Liabilities 7,600,981,378,159 38,289,127,376 7,639,270,505,535

SSS* EC-SIF Total

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation of Financial Statements

a. Statement of Compliance with Philippine Financial Reporting Standards

The accompanying financial statements were prepared in accordance with

b. Presentation of Financial Statements

The financial statements are presented in accordance with PAS 1,

The financial statements have been prepared on a historical cost basis,

Fair Value Measurement

• Level 1 – inputs are quoted prices (unadjusted) in active markets for

e. Functional and Presentation Currency

The financial statements are presented in Philippine peso, which is the

f. Estimates and Judgments

The preparation of the financial statements requires management to make

Judgments, estimates, and assumptions are continually evaluated and are

2.2 Adoption of New and Amended PFRS and Interpretations

a. Effective in 2021 that are relevant to the System

• Amendments to PAS 37 – Provisions, contingent liabilities and contingent

• Amendments to PFRS 16, Leases – COVID-19 related rent concessions

b. New Accounting Standards, Interpretations and Amendments Effective

(i) Effective for annual period beginning on or after January 1, 2022

• Amendments to PFRS 3, Business Combinations update a reference

• Amendments to PFRS 3, Reference to the Conceptual Framework.

• Amendments to PAS 1, Presentation of Financial Statements, on

• Amendments to PAS 16, Property, Plant and Equipment – Proceeds

• Amendments to PAS 37, Onerous Contracts – Cost of Fulfilling a