SOCIAL SECURITY SYSTEM

2010 annual report

Kabalikat sa Tuwid na Landas

sa Pagbangon ng Pilipinas

Contents
01 Highlights of Operations
02 Statement of Mission and Vision 16 Implementation of the Condonation Law
Messages
03 Message of the President of the Republic
of the Philippines 20 2010 Staffing and other Human Resource
04 Message of the SSC Chairman
06 Message of the SSS President and CEO
2010 in Review
10 Changing of the Guards
11 Expressing Corporate Social Responsibility
12 Forging Partnership for Better Service
13 Nurturing Relationships with Stakeholders
14 Developing SSS Employees
15 Celebrating SSS 53 years
SOCIAL SECURITY SYSTEM
2 0 1 0 a n n u a l
Kabalikat sa Tuwid na Landas
sa Pagbangon ng Pilipinas
Highlights of Operations
(Amounts in Million Pesos)
Consolidated
For the Year Increase/(Decrease)
2010 2009 Amount %
A. REVENUES & EXPENDITURES
Revenues 107,120.75 95,336.51 11,784.24 12.4
Contributions 79,272.86 72,350.89 6,921.97 9.6
Investment and Other Income, net 27,847.89 22,985.62 4,862.28 21.2
Expenditures 84,288.57 79,124.55 5,164.02 6.5
Benefit Payments 77,174.16 72,049.96 5,124.20 7.1
Operating Expenses 7,114.41 7,074.59 39.82 0.6
Net Revenue/(Loss) 22,832.19 16,211.96 6,620.22 40.8
B. ASSETS & RESERVES
Assets 297,591.34 272,610.65 24,980.69 9.2
Investments 273,265.61 248,641.45 24,624.16 9.9
SSS Properties 3,318.75 3,413.69 (94.94) (2.8)
Others 21,006.98 20,555.52 451.47 2.2
Liabilities 8,496.31 7,280.83 1,215.47 16.7
Reserves 289,095.03 265,329.82 23,765.22 9.0
Social Security System
For the Year Increase/(Decrease)
2010 2009 Amount %
A. REVENUES & EXPENDITURES
Revenues 104,973.40 93,155.25 11,818.15 12.7
Contributions 77,956.99 71,166.95 6,790.04 9.5
Investment and Other Income, net
Expenditures
27,016.41
83,102.24
21,988.30
77,931.69
5,028.10
5,170.55
22.9
6.6
Special Articles 28 Statement of Financial Position Benefit Payments 76,088.14 70,963.92 5,124.22 7.2
29 Statement of Comprehensive Income Operating Expenses 7,014.10 6,967.77 46.33 0.7
on Penalty on Contributions 30 Statement of Changes in Reserves
17 The UMID: Its Mandate 31 Statement of Cash Flows Net Revenue/(Loss) 21,871.16 15,223.56 6,647.60 43.7
19 2010 SSS Family Day 32 Notes to Financial Statements
B. ASSETS & RESERVES
45 Internal Auditors Report
Management Directions 46 Historical Data
Assets 271,267.54 247,891.34 23,376.20 9.4
21 The SSS Museum and SSS Library Investments 252,630.57 228,919.53 23,711.04 10.4
22 SSS In 2011 and Beyond: Heeding the Management SSS Properties 3,318.75 3,413.69 (94.94) (2.8)
Call for Transformational Change 48 Photo of the Social Security Commission Others 15,318.21 15,558.12 (239.91) (1.5)
50 Photos of the SSS Senior Management Liabilities 8,604.29 7,389.38 1,214.91 16.4
Financial 55 SSC and SSS Management Directory Reserves 262,663.25 240,501.96 22,161.29 9.2
26 Statement of Managements Responsibility 57 Photo of Annual Report Committee and
for the Financial Statements Secretariat
Employees Compensation and State Insurance Fund
27 State Auditors Report on the
Financial Statements For the Year Increase/(Decrease)
2010 2009 Amount %
A. REVENUES & EXPENDITURES
Revenues 2,147.35 2,181.26 (33.90) (1.6)
Contributions 1,315.87 1,183.94 131.92 11.1
Investment and Other Income, net 831.49 997.31 (165.83) (16.6)
r e p o r t
About the Cover
Expenditures 1,186.33 1,192.86 (6.53) (0.5)
Benefit Payments 1,086.02 1,086.03 (0.02) (0.0)
Kabalikat sa Tuwid na Landas sa Pagbangon ng Pilipinas Operating Expenses 100.31 106.83 (6.51) (6.1)
For 53 years, the Filipino has in the Social Security System of the Philippines or the SSS an ally, a partner and a friend. Net Revenue/(Loss) 961.02 988.40 (27.37) (2.8)
Through its valuable aid and assistance programs, the institution has become a key player in the governments program
of nation building. B. ASSETS & RESERVES
Our cover features an SSS member and his family, the recipient of SSS benefits, programs and services. He is a symbol Assets 26,431.84 24,827.91 1,603.93 6.5
Investments 20,635.03 19,721.92 913.12 4.6
of the care and protection that SSS aims to provide its network of members nationwide. A bright tomorrow for the SSS Others 5,796.81 5,106.00 690.81 13.5
member is promised as depicted by a backdrop of a modern, progressive cityscape; a long straight road symbolizes Liabilities 0.06 0.05 0.01 11.8
the nurturing support of SSS which is in line with the new administrations Tuwid na Landas. Reserves 26,431.79 24,827.86 1,603.92 6.5

Statement of Mission
The mission of the SSS is spelled out in Section 2 of the Social Security Law (Republic Act No.
1161), as amended by the Social Security Act of 1997 (Republic Act No. 8282):
It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-
exempt social security system suitable to the needs of the people throughout the Philippines,
which shall promote social justice and provide meaningful protection to members and their
beneficiaries against the hazards of disability, sickness, maternity, old age, death and other
contingencies resulting in loss of income or financial burden. Towards this end, the State shall
endeavor to extend social security protection to workers and their beneficiaries.
Statement of Vision
The SSS aims to develop and promote a viable, universal and equitable social protection
scheme through world-class service.
VIABLE means that it is financially sustainable, non-distortionary, and requires no government
subsidy. Current and future generations of workers and retirees are also assured of meaningful
benefits in return for their contributions.
UNIVERSAL means that protection shall be provided to all residents of the Philippines, citizens
and non-citizens alike, regardless of race, creed, gender, age, geographic location and socio-
economic status. Attention will be given specially the disadvantaged and overseas Filipino
workers (OFWs).
EQUITABLE means fair and uniform coverage shall be made available to all. Benefit entitlements
shall be closely linked with contributions.
WORLD-CLASS SERVICE means that the highest standards of service shall be used to ensure
total member satisfaction. A multi-skilled, forward-looking and generalist SSS workforce shall
provide service that is prompt, accurate and courteous.
2 2010 AN N UAL REPORT
Message
of the President of the
Republic of the Philippines
My warmest greetings to the Social Security System on the
publication of your 2010 Annual Report.
I commend the SSS in your more than 50 years as a key
partner of government, fulfilling our collective mission to
improve the lives of our people. Through the protection that
you provide your members and your programs supporting
their respective enterprises, your institution has proved
crucial not only to the public welfare but also to our
common goal of revitalizing the economy. It is my fervent
hope that you will carry on in your thrust to empowering
our citizenry and making them vital participants, as we set
out to rebuild our country in this daylight of hope.
We have the momentum to sustain this movement for
national transformation, to report our government and
society and to restore our countrys place in the community
of nations. Let us stay united as one people in realizing our
dream of a stable, progressive Philippines.
TUWID NA LANDAS AGENDA:
BENIGNO S. AQUINO III 1. Transform the organization and
its employees;
2. Simplify/Innovate to reduce corruption
and improve efficiency; and,
3. Optimize resources.
3
 Responding to a Sublime Advocacy
Message of the Chairman
T
he year 2010 was a promising one. We witnessed a
turning point in our national history that heeded the call
for genuine change in society filled with hope.
The Social Security System is an ideal template for one to
renew his enthusiasm and entrepreneurial spirit. A government
financial institution immersed with the working mans vision of
perpetual social protection. The SSS is energetic, professional
and has achieved and still much capable of attaining greater
heights that can make a real difference in our country.
So it was with great honor that I accepted the challenge, after
spending nearly four decades of my professional life using
whatever management and leadership skills I honed in the
private sector while steering the course of the biggest food
company in the country.
The historic change in national leadership in 2010, together
with laudable performance of the SSS allowed the net revenue
of the fund to soar from Php16.21 Billion in 2009 to Php22.83
Billion in 2010.
The new Commissioners of the Social Security Commission,
together with the highly-capable President and Chief Executive
Officer look forward to further improve the health of the fund,
inspired by the commitment and efforts of its competent and
4 2010 AN N UAL REPORT
dedicated officers and employees who had toiled throughout
the decades for the benefit of its current members and their
beneficiaries and future generations.
Also in 2010, the Social Security Commission laid down policies
to put in effect the laws passed by Congress, R.A. No. 9903
or the Social Security Condonation Law of 2009 and R.A. No.
9507 or the Socialized and Low-Cost Housing Restructuring
and Condonation Program. These two laws were designed to
encourage employers and member-borrowers to update their
records with SSS, while benefitting from the condonation of
accumulated penalties and loan restructuring schemes.
The implementation of the Member Loan Penalty Condonation
Program for Employers restored employees access to benefits
and privileges that SSS provides for its members while allowing
member-employers to update and remain compliant.
Further initiatives are likewise underway to encourage non-
paying members to return to the fold through intensive coverage
drives directed at local government units, government agency
partners and special sectors all over the country. The OFW
Caravan will also send several hard-working commissioners,
together with SSS officials and staff, to conduct drives in key
countries with high concentrations of overseas Filipino workers
to bring in other coverable employed members to the fold.
A commitment to strike a balance between our corporate I am confident that we can sustain this positive growth as we
goals and institutional responsibilities is magnified through all work together towards a bigger, better and more professional
the policies that the present Commission formulates and SSS for our members.
passes. More than just strengthening the funds financial
condition through optimum compliance, realizing investment On behalf of my fellow Commissioners, I thank the Management
earnings thru prudent investment mechanisms of the SSS and and all the hardworking officers and employees for their
advancing economic and social development, the Commission remarkable work and steadfast commitment to the SSS.
is determined to adhere to the principle of promoting social
justice in the country.
The SSS workforce expresses its support and adherence to the
Quality Policy of the SSS, in line with the mandate of the Citizens
Charter where a commitment to provide prompt, convenient,
reliable and meaningful social protection services to our current
and future members and their beneficiaries is emphasized. We
also commit to follow international standards and the Anti-
Red Tape Act in rendering service to our constituents through
continuing improvements of our work processes founded on JUAN B. SANTOS
good governance, public accountability and transparency.
The SSC will continue to initiate policy reforms to remove
needless obstacles that are counter-productive to the concept of
universal coverage. The board committees composed of Audit,
Investment Oversight, OFW Coverage, Information Technology,
and Coverage and Collection strengthens communication lines
with management and amplify the thrust of this Commission as
an enabler of worthy plans and programs.
5
 REDEFINING THE DYNAMICS OF SOCIAL SECURITY
Message of the President and CEO
Magic Key that Opens Countless Doors
In 2010, when I accepted the position as President and CEO of
the SSS, I knew what I was getting into. I knew that if there is
any place where ones mettle for service is truly tested, it is in
government service where the challenges are often multifold
and where time and resources are always not enough to get
the job done. I knew that leading a public institution that is as
challenging and as complex as the SSS with over 28 million
membership is not going to be easy. I knew that I have to chart
a roadmap that will serve as our guidepost in refreshing the
institution, reinvigorating its sense of mission and reaffirming
its mandate of social protection.
My resolve to serve was bolstered by a magic key that helped
me to steer SSS to the direction where it should go. This was
President Benigno S. Aquino IIIs matuwid na daan which
opened a lot of challenges and opportunities that signaled that
2010 was the propitious time to intensify work in the SSS and
to regain its focus.
So while I recognize what my predecessor did, that is, bringing
SSS to its prime position in the field of social security which was
indeed no mean feat, we started work. We moved to fortify SSS
financial standing by enhancing our financial viability through
reinforced investment portfolios. We improved our operations
through enhancing our service capabilities through delineation
6 2010 AN N UAL REPORT
of functions in some areas of the organization and through
the use of the latest computer technology. We also enhanced
our benefits and privileges to our members through growth in
our earnings and resources. And we moved to create a more
humane and responsive social security for all generations to
come for all Filipinos in all parts of the world.
SSS as Bastion of Civic Responsibility
Workers all over the country have different stories to tell, yet
their stories share a common theme. This is that every hard-
earned peso is needed in the present time. Essentials such as
food, shelter, clothing, and, if possible, education, cannot be
put off for tomorrow. Worst, more often than not, there is seldom
enough money left over to prepare for the unpredictable, but
imminent future.
place social protection strategies specifically in the following
But the future will come. That is the harsh reality of life and it
will not always be rosy and bright when it arrives. Breadwinners
may fall ill, debilitating accidents may occur, and the youthful
intensity and vigor with which we work today will someday
give way to old age.
In the midst of all these, social security fund is probably the
least expensive yet most feature-rich insurance package a
worker will ever find and can rely on to tide him over until
times become normal.
I would like SSS to be always ready to attend to our members in
times like these making sure that benefits and privileges are
not only adequate to the basic minimum level but also given
expeditiously and without unnecessary effort on the part of the
claimant. I would like SSS employees to be in the position to
assure all our valued members that we will walk with them
through economically trying times, that we will assist them in
every way we can so that they can fully avail themselves of
the benefits and privileges due them. I would like the whole
SSS workforce to make our members feel that SSS is their
stronghold, their bastion of hope, theirs and their loved ones
security for a better future.
Despite the immensity in breadth and scope of the work, 2010
saw our commitment to pursue our mandate with dedication
and zeal. We were ever forward-looking and started putting in
guidelines for delinquent employers were revised to liberalize
requisite action areas: social security coverage expansion; more
meaningful benefits; investments optimization; continuous
improvement of our work processes following international
standards in service delivery to qualify for ISO certification
from international certifying body; adherence to the SSS
Quality Policy in line with the mandate of the Citizens Charter;
organization re-engineering; and, charter amendments pursuit,
among others.
I made the whole workforce cognizant of the fact that the
road towards these may be a long and arduous one. The SSS
employees felt the heavy load, too. Yet we agreed that we will
not hesitate to take that road, for the reward of an enduring SSS
is well worth it.
Contribution Collections
In 2010, collection of contributions continued to rise to a record-
high of over 79 billion pesos as compared with over 72 billion
pesos in 2009. This was realized through the implementation of
RA 9903 or the Social Security Condonation Law of 2009 and
RA 9507 or the Socialized and Low-cost Housing Restructuring
and Condonation Program. Efforts of collecting delinquent
member contributions and loan amortizations were intensified
and the installment payment scheme and dacion-en-pago
installment terms. This strategy brought in over a billion pesos
that exceeded the target of 900 million pesos.
This increase in contribution collection was also attributed
through the expansion of the coverage of the public transport
sector and the seafarers when a partnership between the Land
Transportation Franchising Regulatory Board (LTFRB) and the
Philippine Overseas Employment Administration (POEA) was
forged. Another source was the completion of the agreement
7

between SSS and Portugal that provided voluntary social
security coverage to Filipinos residing in that country. The
marked increase in contribution collection was complemented
by expanding the network of e-payment facilities that ensures
steady inflow of collection.
Benefit Payments
SSS paid over 77 billion pesos worth of benefits to its members
reflecting a seven per cent increase in 2010 from the previous
72 billion pesos released in 2009. The bulk of the releases
went to retirement and death claims which accounted for
nearly 85 per cent of total disbursements for the year. Parallel
to this, measures to strengthen control in benefit payments
were undertaken to ensure that the right benefits were afforded
to the right beneficiaries at the right time. These measures
were through the following programs: Enhanced Annual
Confirmation of Pensioners; Revisions in the New Disability
Program; Expansion of Sickness, Maternity and Employees
Compensation (SMEC) payments through the banks; conduct
of meetings with the banks for the Electronic Data Interchange
(EDI); Database Clean-up as a result of erroneous contingency
date, mismatched records in claims information, employee
static and pension database.
Surge in Investments Income
SSS optimized its investments and managed to post a moderate
of over 27 billion pesos worth of investment income which
was 34 per cent higher than the targeted 20 billion pesos for
2010. Bulk of the income was contributed by SSS investments
in government securities and equities that amounted to over
22 billion or 82 per cent of the total investment income. The
SSS has also begun efforts to implement a trading system for
equities and other tradable investments. It has also started
exploring prospective foreign investments for diversification.
SSS has also engaged in developing programs that aimed to
improve the management of member loans. We have started
closing our Direct Housing Loan Program while establishing
the guidelines for the implementation of the Member Loan
Penalty Condonation Program for Employers. The full-scale
implementation of RA 9507 or the Socialized and Low-cost
Housing Loan Restructuring and Condonation Act has likewise
greatly improved SSS liquidity. It is notable, however, that the
ratio of the social benefits through increased ownership and
liberalizing access to home loans far outweighs financial profits.
Improved Service Delivery vis-a-vis Lean
Spending
In line with the governments campaign for enhanced public
service and observance of judicious spending measures, SSS
showed a lower actual operating expenditure recorded at 7.11
billion pesos compared with the projected figure of 8.65 billion
for 2010.
8 2010 AN N UAL REPORT
As countries in the world achieve higher levels of economic
development, their social security systems also advance in
parallel, extending the scope, level and quality of benefits and
services provided. SSS lives with this principle as it started
implementing RA 9485 or the Anti-Red Tape Act (ARTA) where
the step-by-step processes of its operations as well as the ideal
processing time are laid out. It also provided a yardstick within
which to measure the performance of our frontline services.
In line with this was the beginning of the efforts to inculcate
in the consciousness of every SSS employee the essence
of the Quality Policy and the significance of the continual
improvement of the work processes and orienting them in
installing the Quality Management System (QMS) in our
operations as a requirement towards ISO certification by an
international certifying body.
Our effort in upgrading our Information and Communication
Technology (ICT) system was notably a huge success. Twelve
of its application systems from BSS to M9000 servers have
already been migrated and completed. The new server allows
the enhancement of online capabilities while ensuring data
integrity through stricter server security. Microfilming of our
members records has also been started to enhance functionality
and accessibility.
SSS has deployed and installed 290 ID card readers in
different branches to facilitate faster transactions and eliminate
fraudulent claims. These card readers are compliant with
the specifications of the Unified Multi-Purpose ID (UMID)
system. SSS, as member of the core group, has participated in
various technical working meetings and seminars to ascertain
the smooth transition of the SS ID to the UMID system. The
UMID, which aims to streamline, harmonize, and unify existing
ID systems in the government, has been envisioned as the
governments springboard in infusing the benefits of ICT to
improve public service.
I and the rest of the SSS workforce have been made aware that
we have much to be grateful for, and that we still have much
to strive for.
Nurturing Competence and Professionalism in
the Organization
The transformations that are unfolding in the country serve as a
constant reminder of the need to keep the skills and competence
of our employees abreast with the evolving social security
needs of our constituents. Based on what we have experienced,
progress happens by fits and starts, zigzagging upward with
many reverses. This is why in a complex organization such as
the SSS, we need effective, balanced people who know how to
adapt to this dynamics. In the corporate world, highly successful
people are not so much those who are experienced in terms of
years of tenure as much as those who are effective. They are not
so much those who are determined as much as those who are
Message of the President and CEO
disciplined. And they are not so much those who are brilliant as most important thing is to be unified by a common purpose,
much as those who are balanced. We have a huge membership a common commitment. Challenges are enormous. Speed is
to serve so we have to have a workforce who looks at service as critical, therefore, focus is key.
not merely a task but a calling, a privilege and an honor.
As SSS enters 2011, it braces itself to face more challenges even
2010 was the year when efforts to reinvigorate the human while we thank our valued members and their beneficiaries,
resource machinery happened. This was through the our pensioners, our partner banks and other business partners,
implementation of the Staffing Plan by promoting and absorbing the SSS personnel, the Social Security Commission, and His
deserving employees as well as upgrading and reclassifying Excellency President Benigno S. Aquino III for their unrelenting
executive positions. It was also in this year that various training support, trust, confidence and inspiration.
programs were implemented to enhance the technical skills of
the whole workforce. We commit to continue to rejuvenate the SSS by infusing
innovative and productive strategies that would secure the
The new Performance Evaluation System (PES) was also health of our funds while we make our operations respond
designed in order to enhance institutional productivity. This to the call of the government towards transformation. We are
was followed by the development of a PES customized for the confident we shall be able to build a groundswell of support for
executives. our efforts, for we look at this as a rewarding endeavor.
On a lighter side, we encouraged our employees to indulge I exhort everyone in SSS to feel a winner never giving up.
in various athletic, cultural and arts appreciation activities to A wise man says: The one who finishes the race is not the
renew camaraderie, foster teamwork and develop unifying strongest of all but the one who never gave up.
spirit and just have fun.
Exhortation
The greatness of a nation does not only depend on the
advancement of its technologies, the expanse of its conquests
or the wealth inside its coffer. The greatness of a nation lies in
the moral fiber of its number one resource its people. In the
EMILIO S. DE QUIROS, JR.
same breath, I would like to exhort everyone in the SSS that
we be guided by this adage. While we work hard to improve
the management of our assets, enhance fiscal standing and
efficiency in our work processes, post remarkable growths in
all areas of operations, adapt to the ambivalent socio-economic
landscape of the country, or even earn the status of being the
economic backbone in the field of social security, still the
9
 2010 IN REVIEW

PROPELLING NATIONAL
GROWTH
THROUGH EFFICIENT SERVICES

Expressing Corporate Social Responsibility

Corporate Social Responsibility is not just a passing trend
or once-a-year event in SSS; it is a serious and continuing
commitment by both the management and workforce to
exercise good corporate citizenship by helping the lesser
privileged through community work and public service. For
the SSS employees, their passion for volunteer work found
fruition in the SSS Kabalikat ng Bayan Volunteer Corps, which
conducted humanitarian missions in various cities throughout
the year, some of which were sponsored by SSS as an institution.

Changing of the Guards

The year 2010 was marked by a change of government
leadership of the country, after the May 2010 elections. With
President Benigno S. Aquino III at the helm, the entire nation
rallied support for his call for reforms and to follow ang
matuwid na landas (the straight road). A change of leadership
of the SSS also ensued in 2010, with veteran banker and
insurance executive Emilio S. de Quiros, Jr. appointed as SSS
President and Chief Executive Officer by President Aquino.
The head may have changed, but the mandate of SSS remains
the same: provide meaningful protection to members and their
families against the hazards of life.

10 2010 AN N UAL REPORT 11

 2010 IN REVIEW

Nurturing Relationships with Stakeholders

Employers, individual members (whether based inside or
outside the country), and pensioners: these are among the
Forging Partnerships for Better Service important stakeholders that SSS must always keep in mind as it
continues to improve its programs, enhance its services, extend
The SSS cannot perform its mandate of service alone. Despite its coverage, or strengthen its fund life. After all, without these
the breadth of its reach, SSS still requires partnerships with stakeholders, SSS would not have lasted all these years.
other agencies and institutions so that social security benefits
and services meet the members needs in a timely and accurate
manner. In 2010, SSS continued developing and enhancing
its electronic and Internet-based-services in order to serve
members faster and easier. The SSS management also met with
other social security, business and economic experts during
various conferences to share ideas, knowhow and experiences
in order to improve services, policies and programs.

12 2010 AN N UAL REPORT 13

 2010 IN REVIEW

Celebrating SSS 53 years

The SSS celebrated its 53rd Anniversary on 01 September 2010.
Anchored on the theme SSS: Kabalikat sa Tuwid na Landas
sa Pagbabangon ng Pilipinas, this celebration highlighted SSS
continued commitment in promoting the welfare of all Filipino
workers and their families, alongside the governments efforts
to eliminate poverty and improve the quality of life of every
Filipino through good governance.
Developing SSS Employees
Going hand-in-hand with strengthening SSS as an institution is
developing the skills and knowledge of its employees, as well as
looking after their well-being. In 2010, the SSS Rationalization
program was fully implemented, which saw the reorganization
of key units in the main office and branches, the realignment
of positions and job levels, as well as the absorption of long-
serving service bureau personnel into the regular workforce.

14 2010 AN N UAL REPORT 15


SPECIAL EVENTS.
PROJECTS.
SPECIAL
IMPLEMENTATION OF THE CONDONATION
LAW ON PENALTY ON CONTRIBUTIONS
Republic Act No. 9903, otherwise known as the Social Security
Condonation Act of 2009, was signed into law by former President
Gloria Macapagal-Arroyo on 07 January 2010. It took effect on
01 February 2010. Pursuant to the law, the Social Security
Commission (SSC), under its Resolution No. 110 s.2010 dated 10
February 2010, issued the rules and regulations for the effective
implementation of the said Act.
Under the said condonation law, any employer who is
delinquent on his payment or has not remitted all contributions
due and payable to the SSS, must, within six (6) months from its
effectivity, (a) remit said contributions; or (b) submit proposal to
pay the same in installment within a period not exceeding forty-
eight (48) months.
As of 02 August 2010, the last day of the six-month availment
period, a total of 24,043 employers availed of the Program, with
total obligation of P3,545,916,077 and condoned penalty of
P3,423,935,010. Of those who availed, 15,591 (65%) employers
with total obligation of P710,345,281 (20%) paid in cash, while
8,451 (35%) employers availed of an installment scheme where
the current obligation of P500,118,723 (14.1%) was paid in cash,
and the remaining obligation of P2,335,452,073 (66%) to be paid
on installment basis. Excluded from the count of availees are those
who, before the effectivity of the Act, have settled all contributions
but with accrued penalties or those whose obligation consists of
penalty only. The penalties of employers who belong to this group
are condoned by operation of law.
16
The success of the program was brought about by the conduct of
a massive information campaignboth at national and local levels.
The campaign consisted of print replacements; brochures and
flyers; posters, banners and streamers; press releases; and radio/TV
interviews. The guidelines for the Program were published in the
SSS website and intranet.
The implementing rules provided measures that ensure the
protection of the rights of SSS members. Should the settlement
of contributions through full payment or installment result in
additional benefits for contingencies that have occurred prior to
the date of settlement or shall occur within the installment period,
the employer shall pay the SSS damages in accordance with the
provision of the Social Security Act.
Although the availment period for the Condonation Program has
already ended, a delinquent employer may still avail of other
payment modes either under SSC Circular No. 6-P (Amended
Dacion en Pago pursuant to Res. No. 29 dated 16 January 2002),
or Circular No. 2011-002 (Revised Guidelines in the Installment
Payment Scheme for Employers pursuant to Res. No. 976-s.2010
dated 08 December 2010).
The UMID is not a national ID nor is it compulsory to all
Filipino citizens. It will be issued only for the constituents
THE UMID: ITS MANDATE
The UMID stands for Unified Multi-Purpose Identification. This
idea was initiated by the Executive Department of the National
Government and the effort was reinforced through the issuance
of an Executive Order (EO) No. 420 s.2005, that mandated all
government agencies and government-owned and controlled
corporations to streamline and harmonize their ID system.
UMID aims to:
(1) reduce costs and thereby lessen the financial burden
on both the government and the public brought about
by the use of multiple ID cards and the maintenance
of redundant databases containing the same or related
information;
(2) ensure greater convenience for those transacting
business with the government and those availing of
governments services;
(3) facilitate private businesses and promote the wider use
of the unified ID card;
(4) enhance the integrity and reliability of government-
issued ID cards; and
(5) facilitate access to, and delivery of, quality and effective
government service.
The UMID system includes minimum safeguards, as follows:
(1) The data to be recorded and stored, which shall be
used only for purposes of establishing the identity of
a person, shall be limited to those specified in the EO;
(2) In no case shall the collection or compilation of other
data in violation of a persons right to privacy be
allowed or tolerated;
(3) Stringent systems of access control to data in the
identification system shall be instituted;
(4) Data collected and stored for this purpose shall be
kept and treated as strictly confidential. A written
authorization of the Owner of the identification card
shall be required for access and disclosure of data as
well as for any correction or revision of relevant data,
or under such conditions as the participating agency
issuing the identification card may prescribe; and
(5) The identification card to be issued shall be protected
by advanced security features and cryptographic
technology.
of the participating agencies Social Security System (SSS),
Government Service Insurance System (GSIS), Philippine
Health Insurance Corporation (PHIC), and National Home
Mortgage Finance Corporation (NHMFC). Licenses issued by
the Land Transportation Office (LTO), Professional Regulation
Commission (PRC), and ID issued in conformity with treaties
and international law, like passports and seamans ID, are
excluded in the system. These agencies, however, may join the
UMID, if they so desire, by adopting the Common Reference
Number (CRN) into their own system and by following other
legal pertinent requirements.
SPECIAL ARTICLE
SSS as lead agency: From SS card to UMID
Initially, the National Economic Development Authority (NEDA)
took the lead in conceptualizing the machinery of UMID up to
the preparation of the initial draft of the implementing Rules
and Regulations (IRR). In 2008, however, an amendment
to EO 420-s,2005 was issued identifying the social security
Identification system as the core of the UMID and directing the
SSS to lead in its implementation. This is because in 1998, the
SSS acquired a fingerprint biometric-based system for the social
security card. Over 11 million social security cards, so far, had
been generated and issued through this system until April 2010
when card production was stopped due to facility breakdown.
The social security card has gained integrity as a reliable ID
card. Through the years, banks, business establishments, the
courts and other government agencies, including the passport-
issuing office use this for identification of its holder, who
transacts business with them.
The SSS endeavored to upgrade its system, factoring in the
availability of new technologies that observe international
standards, similar to the machine-readable travel documents
by the International Civil Aviation Organization.
After painstaking efforts to upgrade the system that uses
biometric technology and fingerprint matching to determine a
persons identity, an over-all system design came to the fore
with the concurrence of UMID participating-agencies. This
UMID card has three core components:
(1) The CRN, the unique number generated and assigned
by the central verification system to an individual
upon successful enrollment into CRN Registry. CRN
is needed for cross-verification to ensure integrity and
reliability of identification. Once assigned, the CRN is
permanent;
(2) The CRN Registry, which contains the records of
individuals enrolled and assigned with CRN; and
(3) The UMID Card, the secured medium which contains
the CRN. This can be presented by the individual as
proof of his identity.
The data to be collected and recorded by the UMID
participating-agencies are the following:
(1) Name;
(2) Home Address;
(3) Sex;
(4) Picture;
(5) Signature;
(6) Date and place of birth;
(7) Marital status;
(8) Names of parents;
(9) Height;
(10) Weight;
(11) Two index fingers and two thumbmarks;
(12) Any prominent distinguishing features; and
(13) Taxpayer Identification Number.
2010 AN N UAL REPORT 17

The corresponding ID number issued by the participating
agencies and the CRN shall form part of the stored ID data in
the CRN Registry. The custodian of the registry is the National
Statistics Office (NSO).
The task is to move from the social security card, the core of
the System to UMID card, to the one-look, one-format card
for all. The dimension of both cards complies with the ISO
standards. The social security card is basically teslin, while
UMID is Polyethylene Terephthalate Glycol/Poly Vinyl Chloride
(PETG/PVC). The former is 2D-barcode-based, while the latter
is a contactless card. Both cards are with a guaranteed life of
five years.
The data that appear on the front side of both card the Republic
of the Philippines, the face and ghost image of the member, his
full name and his signature. The printing of birthdate is optional
in the social security card, but mandatory in the UMID. The
social security card shows the social security number of the
member, while the UMID shows the CRN. The address of the
member is not printed on the social security card, while it is in
the UMID card. There is a magnetic stripe on the back side of
both cards, basically for ATM-type of transactions.
18
The UMID System: Its Targets
All participating agencies are allowed to undertake enrollment
or data capture subject to the set of enrollment standards
developed by the National Technical Working Group for record
formats of demographic and biometric data. Prior to deployment
of enrollment stations, the compliance with such standards shall
undergo a test by a conformance laboratory and a Certification
process. For its part, the SSS deployed 131 enrollment stations
in 95 SSS branches which have an individual capacity of 70
captures per day on an eight-hour basis.
All outputs by the enrollment stations are inputs to a central
verification system (CVS). The CVS employs a civilian automated
two-fingerprint identification system (AFIS). The accuracy
requirement of the AFIS is 99.5% true accept rate and 0.01%
false accept rate. The True Accept rate is the percentage of
times the AFIS correctly verifies a true claim of identity. On
the other hand, False accept rate is the percentage of times
the AFIS produces a negative claim of identity. In statistics, the
former is the probability of acceptance given that the claim of
identification is true, while the latter refers to the probability
that the claim is false. The CVS has a matching speed of 1,000
enrollments per hour 24/7. The 11.5 million person-records in
the old SSS AFIS were already migrated in the CVS. The capacity
of CVS with Blade System as primary server, is scalable up to 25
million person-records within five years.
Upon successful enrollment, the applicant shall be issued
with CRN. For practical reasons, the agreed upon CRN-
format adopts the algorithm in the social security number.
The CRN and the enrollment data shall be sent to the card
production system. All participating agencies can establish
its own card factory.
In the case of the SSS card production system it has a Card
Management System (CMS) that maintains ID card applications
and a Key Management System (KMS) which grants the authority
to load application in the card. The KMS has the capability
to implement Public Key Infrastructure (PKI) solutions. The
card chip operating system can run applications which are
developed by third-parties. This is another initiative by the
National Government.
The use of the UMID card may be in the form of visual
inspection, a one-to-one AFIS verification through an ATM
machine, or a contactless card reader.
The UMID targets: 70 enrollments per eight-hour day; 25
million enrollees in five years; and 12 million UMID cards in
five years. As a matter of strategic procedure, priority shall be
given to those who have no social security card yet.
SPECIAL ARTICLE
2010 SSS FAMILY DAY
The SSS Family Day is an annual System-wide activity
that encourages camaraderie and the strengthening of the
relationship and familiarity among SSS employees and their
families. The 2010 SSS Family Day mirrored such an interaction
and the SSS compound became a venue for what we considered
as a momentous and joyful event the memory of which we
shall always treasure.
The 2010 SSS Family Day for the Main Office was concluded in
four (4) separate events. This was divided into four (4) groups,
namely (1) the Social Security Commission and Presidents
Group, (2) IT Management Group and the Program Manage-
ment Group, (3) the Controllership Group and Branch Opera-
tion (Corporate Offices), and (4) the Administration Group and
Investments Sector.
The Social Security Commission and Presidents Group con-
ducted theirs at the MAC building, Diliman, Quezon City on 20
November 2010. Major activities included installing a photo
booth, parlor games and entertainment/videoke-singing. The
group had a total of 339 attendees. (322 employees and family
members).
The IT Management and the Program Management Groups,
respectively, conducted their Family Day at the SSS Canteen,
Main Office Bldg., Quezon City on 26 November 2010. Major
activities included bingo sosyal, raffle draw, fun games, and
videoke-singing. The group had a total of 465 attendees. (438
employees and family members).
The Controllership Group and Branch Operations (Corporate
Offices) conducted their Family Day at the SSS Main Office
Building (Front Lobby) on 20 November 2010. Major activities
included film showing, raffle draw, team activities, and photo
souvenir. The group had a total of 534 attendees. (275 employ-
ees and family members).
The Administration Group and Investments Sector conducted
their family day at Club Manila East Resort and Hotel at Taytay,
Rizal on 20 November 2010. Major activities included parlor
games and water sports, cheering contest, videoke challenge
raffle draw and swimming. The group had 570 attendees. (458
employees and family members).
There were a total of 1,891 regular employees, Service Bureau
and Job Order personnel who attended the SSS Family Day.
Over-all the number of attendees including family members
were 1,510.
2010 AN N UAL REPORT 19

2010 STAFFING AND OTHER HUMAN
RESOURCE MANAGEMENT DIRECTIONS
The implementation of the Staffing Plan which started in 2009
paved the way for another milestone in the implementation of
the SSS approved Rationalization Plan.
One of the roll-out activities was to gradually fill-in the
vacant positions created as a result of the restructuring and
the movements and separation of employees, over a period of
ten years. The initial phase of the staffing plan focused on the
absorption of qualified and deserving Service Bureau personnel
as directed by the Social Security Commission through SSC
Resolution No. 509, s. 2009 which led to the regularization of
1,131 SBs and the promotion of 68 rank and file employees.
In 2010, a total of 1,089 positions were filled through the
promotion and lateral transfer of 853 regular employees,
absorption of 206 SB personnel and direct-hiring of 30 external
applicants for technical and specialized positions as well as
promotion of qualified and deserving Officers-in-Charge (OICs)
to 117 executive positions.
An assistance plan was implemented by the Management
to further support the SBs preparation to complete their
qualification requirements. This assistance included the
conduct of review sessions for CSC Examination and Qualifying
20
and Specialized Examinations, scheduling for CSC Professional
eligibility examination and counseling for their college
academic course completion.
Human Resource Management (HRM) Divisions priorities
focus on the review and enhancement of job functions
and qualification requirements of plantilla positions and in
the formulation of intensified approaches to training and
development programs. This is pursuant to the call of the
Management to streamline and automate processes towards
enhanced governance and operational efficiency that would
redound to meeting members expectation and satisfaction.
Along with these, the new Performance Evaluation System
for both Executives and Rank & File employees will be ready
for implementation before the end of 2011. This will ensure
the continuous improvement of individual and organizational
performance and will serve as basis for performance-based
personnel actions (promotions, training & development,
scholarships) and incentives and rewards. Likewise, the
implementation of the Human Resource Information System
(HRIS) will address critical human resource and organizational
requirements and ensure maximized productivity of the SSS
workforce.
SPECIAL ARTICLE
The SSS Museum and SSS Library:
More than repositories of artifacts
and documents
Visiting a museum is often stereotyped as an activity confined
to those going on a school trip or for members of the middle or
upper classes. In reality, however, a trip to a museum can be
enjoyed by all and can be both a pleasurable and educational
experience. The primary role of a museum is to be a source of
education, whether through showcasing collections of cultural
products such as pieces of art, telling the story of something
important, such as an historical event, or raising awareness of
a societal concern, such as poverty. The goal of a museum is
to ensure that upon leaving, each visitor knows something that
they did not know when they entered.
The documentary materials held in museums constitute a
vast resource. At a minimum, they consist of institutional
records, operational and personnel records, documentation
of collections, manuscripts and photographs in short, the
historical memory of an institution and its activities. Museums
generally collect, preserve, use and house artifacts for the benefit
of society. Museums can be chartered as independent, non-profit
organizations, or in special cases, as part of a corporation.
On 01 September 2010, as part of its 53rd Anniversary
celebration, the SSS inaugurated its twin facilities for the public:
the new SSS Museum and the expanded SSS Library. Located
at the basement of the SSS Main Office in Diliman, the two
facilities serve as more than a repository of documents, paintings
or memorabilia. They are the institutional memory bank of
the SSS.
The SSS Museum is a special kind of museum in that it
holds original documents, printings, photographs and other
memorabilia that show a vivid picture of the SSS and the
development of social security in the Philippines.
Meanwhile, the SSS Library, formerly housed at the 12th floor
of the Main Building, was moved to the basement in a more
spacious area beside the SSS Museum in response to the
growing number of users interested in social security. The SSS
Library contains an expansive collection of books, magazines,
journals, and other reference materials on social security,
business and economics, social sciences, labor, and law.
Publications from the World Bank, the International Labour
Organization, the International Social Security Association,
and other international institutions are likewise available.
As a way to cater to the information needs of the public, both the
SSS Museum and Library have no entrance or user fees. The SSS
Museum is open to visitors from Tuesdays to Fridays, 9:00 am to
5:00pm, and Saturdays, 9:00am to 12 pm. Meanwhile, the SSS
Library is open from Tuesdays to Fridays, 9:00 am to 6:00pm.
2010 AN N UAL REPORT 21

SSS in 2011 and Beyond
HEEDING THE CALL FOR
TRANSFORMATIONAL CHANGE
Truly, 2010 was the year of transformation as the nation faced
a decisive point to ameliorate the helm of the country. As
soon as the first automated elections concluded the historic
endeavor, the Philippines became a realm of reform as the new
administration has made transformation as the cornerstone of
its agenda.
As such, the arising transformational trend immediately crawled
its way through the labyrinths of the government as the different
institutions and agencies of the state like the SSS embraced the
refreshing direction.
For its part, the SSS witnessed a major change in its leadership
as it welcomed a new set of stewards who are expected to
steer the fund to greater heights. Building on the foundations of
transformational change, the SSS is geared to continue pursuing
its mission of promoting the countrys development through the
provision of meaningful social protection and sound investment
decisions.
This year, the SSS is poised to revitalize its idea of service delivery
by concentrating its efforts on six action areas identified by the
renewed management: (1) Expand Social Security Coverage, (2)
Make SSS benefits more meaningful, (3) Optimize investments,
(4) Improve service delivery, (5) Re-engineer the organization,
and (6) Pursue charter amendments.
Expand Social Security Coverage
As the countrys premier social security provider, the role of SSS
in raising the level of coverage to social security in the country
is vital. Every attempt to keep SSS closer to the members must
be astute to, gradually, achieve its vision of universal coverage
to social security in the country.
In 2011, the SSS shall embark on heightened efforts of
stimulating members to actively pay their contributions and
regain their entitlement to the package of benefits under the
social security program through the expansion of payment
schemes and self-service terminals. Inspired by the efficiency
of todays technology, the SSS shall continue to empower its
members by providing easier access to information on their
social security through the expansion of various self-service
facilities. Moreover, the SSS shall continue to forge partnerships
with various government and non-government institutions for
the coverage of special sectors as well as continue accrediting
cooperatives and associations as collecting agents to boost
collections.
22
Driven by the insurance principle that gave expression to the
solidarity of workers and employers, the SSS aims to increase
the participation of both parties in securing a viable social
security protection. SSS shall pursue on increasing the existing
monthly salary credit to PHP 20,000. Also, an increase in the
contribution rate by 0.6 percent that will be equally shared
between the covered employee and employer will also be
pursued to rev up the financial viability of the fund and keep
it at par with its international counterparts. Furthermore, the
SSS plans to increase its collection efforts on erring employers
through the implementation of the revised installment payment
and dacion-en-pago guidelines.
The arising trend on labor migration in the Philippines is also
highlighted in the planned priorities of SSS in 2011. In this
regard, SSS plans to serve the growing number of overseas
Filipino workers (OFW) by opening more foreign branches in
countries mostly flanked by our migrant workers. In addition,
the SSS will also review the manning levels of existing foreign
branches to increase the efficiency of each of these branches.
The welfare of our sea-based members will also be prioritized
through the development and implementation of the revised
policy requiring their mandatory coverage to SSS. Moreover, the
SSS shall pursue on forging a memorandum of agreement with
the Department of Labor and Employment and the Philippine
Overseas Employment Administration on the attempt of
mandatorily covering both newly hired and rehired OFWs. SSS
also intends to delineate the functions of its Foreign Operations,
International Affairs and Online Support Services, which, in the
meantime, are the departments catering to all the transactional
needs of OFW members.
Make SSS Benefits More Meaningful
The advent of a revitalizing change promulgated by the new
administration inspired state agencies and institutions like the
SSS in incorporating the newfound advocacy in performing their
respective mandates. With this, the SSS will further its earnest
commitment in providing meaningful benefits to its members
by developing policies and programs that would reaffirm the
role of SSS as a reliable partner in times of distress.
In this regard, the SSS shall develop a voluntary provident fund
program for the retirement of local workers benchmarked from
the success of retirement programs of various agencies as well
as the existing provident fund program of the OFW members
of SSS. This endeavor is envisioned to be a means of promoting
individual savings as a catalyst of growth.
In 2011, the SSS shall introduce new policies that would
ascertain our prompt response to the growing call for
transformational change in the country through better public
service. These policies will revolve within the bounds of
better administration of benefits and more efficient delivery of
SPECIAL ARTICLE
service. In particular, the SSS is determined to implement the
new Disability Program, the enhanced Annual Confirmation
of Pensioners, and the new guidelines on the Funeral Benefit
of members. This year will also mark the full implementation
of the Anti-Red Tape Act that will ensure fast delivery of SSS
services to its members while expanding the Branch Queue
Management System which aims to manage the queuing
system of the SSS as transacting stakeholders crowd our offices.
Optimize Investments
The change of the national stewardship last year paved way
to the renewal of investor sentiment in the country evidenced
by the record high performance of the local bourse as well as
the surging inflow of foreign portfolio investments. The SSS
will harness the benefits of this opportunity to enhance the
productivity of its investments which play a crucial role in the
well-being of the fund.
This year, SSS is looking at tapping the expertise of local fund
managers in identifying the most optimal investment strategy
for SSS as well as establishing a benchmark in evaluating the
performance of the adapted strategy. Moreover, the SSS is ardent
on upgrading its trading system complemented with state-of-the-
art facilities that will further bolster its equities income.
The governments advocacy of promoting economic
development in the country by forging partnership with the
private sector will also be heeded by SSS through optimizing its
institutional lending facility as an alternative investment outlet.
This endeavor will allow the SSS to balance its bureaucratic
commitment and its institutional responsibilities.
Improve Service Delivery
The SSS is cognizant of its duty to provide its members with
more value to their social security. With the magnitude of
transactions within the institution, a complex system of
information and communication technology (ICT) is vital to
improving the efficiencies and maintaining the integrity of the
institution.
This year, the SSS shall embark on efforts to re-engineer
the business processes of the system as well as deploy the
appropriate ICT resources needed in the frontline and backroom
services. Also, the SSS plans to instigate the automation of office
procedures through the implementation of the Automated
Records Management System. This is crucial to the goal of SSS
in providing faster and more accurate delivery of services by
reducing human intervention in its procedures.
As we strive to develop and maintain the trust of our members,
it is imperative that the SSS upholds utmost integrity of its
database. The SSS shall revive its database clean-up project
2010 AN N UAL REPORT 23

which aims to correct inaccurate member information which is
crucial in determining the level of benefits that a member can
be entitled with. To boost its efforts in upholding the integrity
of its database, SSS shall establish links with the databases of
other government agencies which will also serve as a ground
for cooperation in achieving overall improvement of public
service. This inter-agency cooperation is also in time with the
plans of SSS to fully implement the Unified Multi-Purpose
Identification System in its transactions.
Along with the synchronized efforts of extending access and
ensuring the viability of social security, improving service
delivery through the employment of the proper ICT makes
the SSS one step closer to achieving its mandate of universal
coverage to social security in the country. This only proves that
the ICT structure is considered the backbone of efficient SSS
operations.
24
Re-engineer the Organization
Last year marked the changing of the guards of the countrys
premiere social security provider. The highest policy making
body and the chief executive post of the SSS was rejuvenated
with highly-experienced individuals chosen for their sheer
competence and fervor to lead the fund towards greater
success. As a result, the call for a system-wide reinvigoration
was accentuated to respond to the changes in the bureaucratic
and corporate environment.
In this regard, the SSS is set to implement an appropriate
organizational structure responsive to times as well as
establish an organization-wide performance evaluation system
benchmarked on the best practices of other agencies and
organizations. Inspired by the ergonomic design of private
banks, the SSS shall review the functions as well as the layout
of its branches to determine the standards in improving service
delivery to its members.
These programs are the working manifestations that the SSS is
ardent in responding to the rousing call for transformational
2010
change within the countrys bureaucracy.
Pursue Charter Amendments
FINANCIAL
As we continue to scout for ways to advance the social security
protection in the country, the charter that dictates our very
purpose must also be receptive to the changing times. The
charter itself must institutionalize the ability of SSS to respond
and innovate as changes occur in the context of social security
in the Philippines.
STATEMENTS
With this, the SSS shall undertake measures to pursue its charter
amendments to keep it abreast with the growing social security
demands of the country. We will be attentive to these needs as
we finalize our recommendations on the charter amendments.
To ensure the incessant progress, we will actively participate
in public hearings and dialogues concerning our charters
amendments.
Conclusion: Responding to the Eminent Call
Over the years, SSS has remained consistent with its efforts of
enhancing the insurance fund of its hardworking members.
With the advent of transformational reforms, the coverage of our
efforts have extended from simple social security coverage to
promoting the social security in the country through impeccable
and professional delivery of service and more meaningful
benefits to our members. Indeed, the SSS is dedicated to help
its members maximize each hard-earned peso to secure a stable
future for him and his beneficiaries.
SOCIAL SECURITY SYSTEM

S t a t e m e n t o f M a n a g e m e n t s R e s p o n s i b i l i t y f o r
the Financial Statements
SOCIAL SECURITY SYSTEM
The Management of Social Security System is responsible for all information and representations contained in the consolidated
financial statements as of December 31, 2010 and 2009. The financial statements have been prepared in conformity with the
accounting principles generally accepted in the Philippines, and reflect amounts that are based on the best estimates and informed
judgement of Management with an appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to
ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and
liabilities are recognized.
The Social Security Commission reviews the consolidated financial statements before such statements are approved and submitted
to the President of the Philippines and to the Congress of the Philippines.
JUAN B. SANTOS EMILIO S. DE QUIROS, JR. ELVIRA G. ALCANTARA-RESARE
Chairman, SS Commission President and CEO Officer-in-Charge
Controllership Division
26
FINANCIAL STATEMENTS2010
S t a t e A u d i t o r s R e p o r t o n
the Financial Statements
The Social Security Commission
Social Security System
East Avenue, Diliman, Quezon City
We have audited the accompanying financial statements of Social Security System, which comprise the statement of financial position as at December 31,
2010, and the statement of comprehensive income, statement of changes in reserves and statement of cash flows for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting
Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors Reponsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International
Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Bases for Qualified Opinion
As reported in Observation Nos. 2, 4, 5, 6, 7 and 8 of the audit report, the accuracy of the Receivable - Member Loans (ML), Housing Loan and Receivable-Real
and Other Property Acquired (ROPA), Regular Real Estate Loans (REL), Receivable - Collecting Bank-Regular, Cash Collecting Officer (CCO) and the Cash in Bank
(CIB) accounts with balances of P43.292 billion, P5.255 billion, P3.502 billion, P3.044 billion, P683.706 million and P11.041 million, respectively, cannot be
ascertained due to, among others:
Collections from members of P5.793 billion that were not yet deducted from their loan accounts, of which P3.586 billion were distributed based on
estimate and without corresponding posting to members accounts, and the P926.714 million variance between the general ledger and aging schedule;
REL repayments of P2.018 billion remained not recorded or posted to the ledgers, and the REL regular account were not disabled in the REL System
when these were restructured and new accounts were created, resulting in the distribution of repayments to both accounts totaling P165.224 million;
A temporary subsidiary ledger account of P3.018 billion and a negative balance of P5.194 billion from 88 banks, some already closed or merged with
other banks, representing collections already remitted to SSS but not yet posted to members accounts;
Discrepancy of P528.479 million between the balances of the CCO Main Office account and the Cashbook and the Report of Undeposited Collections
due to prior and current years collections not matched with deposits, delayed validation of OFW collections, and deposit not closed to clearing
account; and
Unaccounted Migration Cash in Bank (MIG-CIB) affecting the CIB-Euro/Dollar/Peso Savings/Current Account in the amount of negative P626.41
million and the CIBWorking Fund account of P643.834 million.
Opinion
In our opinion, except for the effects of the matter described in the Bases for Qualified Opinion paragraph, the financial statements present fairly, in all
material respects, the financial position of the Social Security System as at December 31, 2010, and its financial performance and its cash flows for the year
then ended in accordance with Philippine Financial Reporting Standards.
COMMISSION ON AUDIT
DELIA D. AGATEP
State Auditor V
Supervising Auditor
August 26, 2011
2010 AN N UAL REPORT 27
 FINANCIAL STATEMENTS 2010

Statement of Statement of
Financial Position Comprehensive Income
DECEMBER 31, 2010 FOR THE YEAR ENDED DECEMBER 31, 2010
(In Philippine Peso) (In Philippine Peso)

Notes 2010 2009 Notes 2010 2009

ASSETS Revenues
Members contribution 79,272,860,300 72,350,893,036
Current Assets Investment and other income 21 27,847,894,686 22,985,618,802
Cash and cash equivalents 3 7,378,656,013 8,995,402,491
Held-to-maturity investments 4 7,397,607,090 13,293,628,605 107,120,754,986 95,336,511,838
Held-for-trading financial assets 5 3,330,769,671 979,839,420
Receivables 6 6,999,366,607 5,334,882,298 Expenditures
Other current assets 7 88,945,464 117,762,834
Benefit Payments 22
25,195,344,845 28,721,515,648 Retirement 38,226,764,028 35,126,490,608
Non-Current Assets Death 27,648,690,657 25,962,639,582
Non-current Financial assets 8 250,408,102,813 223,472,303,766 Maternity 3,634,831,332 3,589,163,852
Investment property 9 12,129,126,734 10,895,675,521 Disability 3,362,393,087 3,253,748,170
Property and equipment 10 3,318,749,960 3,413,685,287 Funeral grant 2,488,203,147 2,377,398,534
Intangible assets 11 208,582,776 164,934,237 Sickness 1,777,593,577 1,703,782,723
Non-current assets held for sale 12 5,771,908,785 5,404,768,660 Medical services 35,565,635 36,651,721
Other non-current assets 13 559,524,623 537,767,300 Rehabilitation services 115,985 82,815

272,395,995,691 243,889,134,771 77,174,157,448 72,049,958,005

Total Assets 297,591,340,536 272,610,650,419 Operating Expenses
Personal services 23 5,271,665,639 4,730,723,529
LIABILITIES Maintenance and other operating expenses 24 1,842,745,190 2,343,867,852

Current Liabilities 7,114,410,829 7,074,591,381
Accounts payable and accrued expenses 14 3,238,381,868 3,248,103,762
Funds held in trust 15 778,135,832 623,290,176 84,288,568,277 79,124,549,386
Deferred income 16 83,210,203 93,384,621
Other current liabilities 17 3,002,051,161 1,947,038,162 Net Revenues 22,832,186,709 16,211,962,452

7,101,779,064 5,911,816,721 Other Comprehensive Income/(loss)
Non Current Liabilities Available-for-sale financial assets
Accrued retirement benefits 18 1,384,768,341 1,359,174,889 Reclassification adjustments (6,497,262,229) (3,869,835,841)
Rent payable 19 9,759,875 9,840,971 Gain on fair value adjustment 7,555,937,265 27,199,674,473
Revaluation increase - land - 277,700,739
1,394,528,216 1,369,015,860 Settlement of claims for disallowed payments - (11,313,834)

Total Liabilities 8,496,307,280 7,280,832,581 1,058,675,036 23,596,225,537

RESERVES 20 289,095,033,256 265,329,817,838 Total Comprehensive Income for the Year 23,890,861,745 39,808,187,989

Total Liabilities and Reserves 297,591,340,536 272,610,650,419 See accompanying notes to financial statements.

See accompanying notes to financial statements.

28 2010 AN N UAL REPORT 29

 FINANCIAL STATEMENTS 2010

Statement of Statement of
Changes in Reserves Cash Flows
FOR THE YEAR ENDED DECEMBER 31, 2010 FOR THE YEAR ENDED DECEMBER 31, 2010
(In Philippine peso) (In Philippine peso)

Notes 2010 2009

Cash flows from operating activities

Gain/(loss) on fair
Members contribution 79,272,860,300 72,350,893,036
value adjustment Property
Investment and other income 21 16,099,119,714 14,689,520,657
of available for-sale valuation Contingent Donated
Payments to members and beneficiaries (77,278,979,616) (72,061,527,723)
Notes Reserve fund financial assets reserve surplus property Total reserves
Payments for operations (7,154,956,505) (6,531,397,668)

Balance, 1 January 2010 237,458,434,323 26,347,427,214 1,505,523,674 7,040,647 11,391,980 265,329,817,838
Operating income before changes in

operating assets and liabilities 10,938,043,893 8,447,488,302
Corporate operating budget of

Employees Compensation
(Increase)/decrease in operating assets
Commission and Occupational
Held-for-trading financial assets (835,334,809) 717,013,283
Safety and Health Center (125,646,327) - - - - (125,646,327)
Receivables 6 (991,909,512) 992,815,389

Other operating assets (458,135,984) (26,484,820)
Total comprehensive income

for the year 22,832,186,709 1,058,675,036 - - - 23,890,861,745
Increase/(decrease) in operating liabilities

Funds held in trust 154,845,656 101,026,873
BALANCE, 31 DECEMBER 2010 20 260,164,974,705 27,406,102,250 1,505,523,674 7,040,647 11,391,980 289,095,033,256
Other current liabilities 1,055,012,999 (568,583,093)


BALANCE, 31 DECEMBER 2009 20 237,458,434,323 26,347,427,214 1,505,523,674 7,040,647 11,391,980 265,329,817,838
Net cash generated from operating activities 9,862,522,243 9,663,275,934


See accompanying notes to financial statements.
Cash flows from investing activities

Loan releases and other investment purchases, net (11,147,603,134) (7,018,112,473)
Acquisition of property and equipment, net 10 (158,721,227) (408,964,165)
Acquisition of intangible assets, net 11 (47,298,033) (33,592,244)

Net cash used in investing activities (11,353,622,394) (7,460,668,882)

Cash flows from financing activities

Corporate operating budget of Employees Compensation
Commission and Occupational Safety and Health Center (125,646,327) (81,315,097)

Net increase/(decrease) in cash and cash equivalents (1,616,746,478) 2,121,291,955

Cash and cash equivalents at beginning of year 3 8,995,402,491 6,874,110,536

Cash and cash equivalents at end of year 3 7,378,656,013 8,995,402,491

See accompanying notes to financial statements.

30 2010 AN N UAL REPORT 31


Notes to
Financial Statements
(All amounts in Philippine peso unless otherwise stated)
1. REPORTING ENTITY
The Social Security System (SSS) administers social security protection
to workers in the private sector. Social security provides replacement
income for workers in times of death, disability, sickness, maternity
and old age. On 1 September 1957, 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 1 May 1997, Republic Act (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 8282 exempts the SSS and all its
benefit payments from all kinds of taxes, fees or charges, customs or
import duty.
The SSS is a financial institution in the Philippines. Its principal office
is in East Avenue, Quezon City.
The financial statements include the accounts of Employees
Compensation and State Insurance Fund, which is being administered
by the SSS, as provided for by Presidential Decree No. 626, as amended.
All inter-fund accounts have been eliminated.
The accompanying financial statements were approved and
authorized for issue by the Social Security Commission on 25 May
2011 under its Resolution No. 591-s.2011.
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
a. Statement of compliance
The financial statements of the SSS have been prepared in
accordance with Philippine Financial Reporting Standards
(PFRS), Philippine Accounting Standards (PAS) and Philippine
Interpretations issued by the Financial Reporting Standards
Council (FRSC), where applicable
b. Basis of measurement
The financial statements have been prepared on the historical
cost basis except for the following items:
financial assets at fair value through profit or loss are
measured at fair value
marketable securities classified as available-for-sale are
measured at fair value
investment properties are measured at fair value
land under property and equipment are measured at
revalued amount
c. Estimates and judgments
The preparation of the financial statements in confirmity with
PFRS/PAS requires management to make judgements, estimates
and assumptions that affect the application of accounting
32
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 New standards, interpretations and amendments to published
standards
a. Effective in 2010 that are relevant to SSS
a.1 2009 Annual Improvements to PFRS
The Financial Reporting Standards Council (FRSC)
has adopted the Improvements to PFRS 2009. Among
those improvements, only the following amendments
were identified to be relevant but not expected to have
material effects on the financial statements:
a.1.1 PAS 7 (Amendment), Statement of Cash Flows
(effective from 1 January 2010)
The amendment clarifies that only an expenditure
that results in a recognized asset can be classified as
a cash flow from investing activities. Presently, the
SSS classified only recognized assets as cash flow
from investing activities.
a.1.2 PAS 17 (Amendment), Leases (effective
1 January 2010)
The amendment clarifies that when a lease includes
both land and building elements, an entity assesses
the classification of each element as finance or
operating lease separately in accordance with the
general guidance on lease classification set out in
PAS 17.
b. Effective subsequent to 2010 that are relevant to SSS but not
adopted early
b.1 PFRS 9 Financial Instruments
Issued in November 2009 and amended in October
2010, PFRS 9 introduces new requirements for the
classification and measurement of financial assets and
financial liabilities and for derecognition.
PFRS 9 requires all recognized financial assets that are
within the scope of PAS 39 Financial Instruments:
Recognition and Measurement to be subsequently
measured at amortized cost or fair value. Specifically,
debt investments that are held within a business
model whose objective is to collect the contractual cash
flows and that have contractual cash flows from solely
payments of principal and interest on the principal
outstanding are generally measured at amortized
cost at the end of subsequent accounting periods. All
other debt investments and equity investments are
measured at their fair values at the end of subsequent
accounting periods.
Equity instruments that are held for trading will be
measured at fair value through profit or loss. For all
other equity investments, an irrevocable election can
be made at initial recognition, to recognize unrealized
and realized fair value gains and losses through other
comprehensive income rather than profit or loss. There
shall be no recycling of fair value gains and losses
to profit or loss. This election may be made on an
instrument-by-instrument basis. Dividends are to be
presented in profit or loss as long as they represent a
return on investment.
While adoption of PFRS 9 is mandatory from 1 January
2013, earlier application is permitted. The SSS is
currently assessing the implications and impact of PFRS
9 and it is not practicable to provide reasonable estimate
of the effect until a detailed review has been completed.
2.3 Financial assets
a. 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.
b. 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 fair value through
profit or loss.
c. Determination of fair value
The fair value of investments that are actively traded in
organized financial markets is determined by reference
to quoted market bid prices. When current bid prices are
not available, the price of the most recent transaction
provides evidence of the current fair value as long as
there has not been a significant change in economic
circumstances since the time of the transaction.
For investments where there is no active market, fair value
is determined using valuation techniques. Such techniques
include using recent arms-length market transactions,
reference to the current market value of another instrument,
which is substantially the same, discounted cash flow
analysis and option pricing models.
d. Classification
The SSS has the following non-derivative financial assets:
financial assets at fair value through profit or loss, held-
to-maturity financial assets, loans and receivables and
available-for-sale financial assets.
d.1 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
consist of held-for-trading financial assets. Held-for-
trading financial assets are financial assets acquired
FINANCIAL STATEMENTS 2010
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 fair value through profit or loss are measured
at fair value and changes therein are recognized in
profit or loss.
d.2 Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative
financial assets with fixed or determinable payments
and fixed maturity for which there is the positive
intention and ability to hold to maturity. They are
recognized initially at fair value plus any directly
attributable transaction costs. Subsequent to initial
recognition held-to-maturity investments are
measured at amortized cost using the effective interest
method, less any impairment in value.
Gains and losses are recognized in profit or loss when
the held-to-maturity financial assets are derecognized
or impaired, as well as through the amortization
process.
d.3 Loans and receivables
Loans and receivables are financial assets with fixed
or determinable payments that are not quoted in
an active market. Such assets are carried at cost or
amortized cost less impairment in value.
A loan or receivable is deemed impaired when it
is considered that it will probably not be possible
to recover all the amounts due according to the
contractual terms, or equivalent value. Significant
financial difficulties of the debtor, probability that the
debtor will enter bankruptcy and default or delinquency
in payments are considered indicators that such loans
and receivables are impaired.
The SSS provides an allowance for impairment loss for
5 years and above delinquent member loan accounts. It
adopts the Bangko Sentral ng Pilipinas (BSP) Circulars
210 Series of 1999 and 313 Series of 2001 in identifying
and monitoring problem loans and risk assets and
setting up of allowance for probable losses. BSP outlines
the following rates for the setting up of allowance for
probable losses:
Classification Allowances
Unclassified 0%
Loans especially mentioned 5%
Substandard
Secured 10%
Unsecured 25%
Doubtful 50%
Loss 100%
2010 AN N UAL REPORT 33

Member loan accounts that are subjected to
impairment fall under substandard which is defined
as loans or portions thereof which appear to involve
a substantial and unreasonable degree of risk to
the institution because of unfavorable record or
unsatisfactory characteristics. They are secured/backed
by members equity and benefits (i.e. all outstanding
obligations of members at the time of their application
for final claim are being deducted from their claim
proceeds).
d.4 Available-for-sale financial assets
Available-for-sale financial assets are non-derivative
financial assets that are designated as available-
for-sale and that are not classified in any of the
other categories. Subsequent to initial recognition,
available-for-sale 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 available-for-sale
financial assets portion. When an available-for-sale
financial asset is derecognized, the cumulative gains
or losses are transferred to profit or loss and presented
as a reclassification adjustment within the statement
of comprehensive income. Dividends on available-for-
sale equity instruments are recognized in profit or loss
when the right to receive payments is established.
If an available-for-sale financial asset is impaired, an
amount comprising the difference between its cost
(net of any principal payment and amortization) and its
current fair value, less any impairment loss previously
recognized in profit or loss, is transferred from reserves
to profit or loss and presented as a reclassification
adjustment within the statement of comprehensive
income. Reversals in respect of equity instruments
classified as available-for-sale are not recognized in
profit or loss.
e. 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.
2.4 Cash equivalents
Cash equivalents comprise short-term, highly liquid
investments that are readily convertible to known amounts of
cash with original maturities of 90 days or less and are subject
to an insignificant risk of change in value.
2.5 Supplies and materials
Supplies and materials are valued at cost using the weighted
average method.
2.6 Investment property
Investment property account consists of property held to earn
rentals and/or for capital appreciation.
34
An investment property is initially measured at cost, including
transaction costs. Such cost 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.
Transfers to or from investment property are made when
there is achange in use, evidenced by:
commencement of owner-occupation
end of owner-occupation
commencement of an operating lease to another party
2.7 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 credited to reserves under property
valuation reserve unless it represents the reversal of a
revaluation decrease of the same asset previously recognized
as an expense, in which case it is recognized as income. On
the other hand, a decrease arising as a result of a revaluation
is recognized as an expense to the extent that it exceeds any
amount previously credited to property valuation reserve
relating to the same asset.
Cost includes all costs necessary to bring the asset to working
condition for its intended use. This would include not only
its original purchase price but also costs of site preparation,
delivery and handling, installation, related professional
fees for architects and engineers, and the estimated cost of
dismantling and removing the asset and restoring the site.
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. The costs of the day-to-day servicing of property
and equipment are recognized in profit or loss as 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 lives of each part of an
item of property and equipment.
The estimated useful lives of property and equipment are as
follows:
Assets Life
Building
/building improvements 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 loss and presented within reserves in the property valuation
of lease whichever
is shorter)
Building and building improvements have residual value
equivalent to 10% of the acquisition/appraised value while
other items of property and equipment except land have one
peso as their residual value.
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.
2.8 Intangible assets
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 lives, while those with indefinite useful lives or those
used perpetually or for as long as there are computers
compatible with them are carried at cost and tested annually
for impairment.
2.9 Non-current assets held for sale
Non-current assets are classified as held for sale 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 and 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.
Non-current assets held for sale include 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.
2.10 Impairment of non-financial assets
The carrying amount of non-financial assets, other than
investment property and non-current assets held for sale
is 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, then the assets recoverable amount is estimated.
Recoverable amount is the higher of an assets 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/
reserve portion. Depreciation and amortization charge for
future periods is adjusted.
FINANCIAL STATEMENTS 2010
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
assets 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.
2.11 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:
a. Members contribution
Revenue is recognized upon collection.
b. Interest income
Revenue is recognized as the interest accrues, taking into
account the effective yield on the asset.
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.
2.12 Expense recognition
Expenses are recognized in the statement of comprehensive
income upon utilization of the service or at the date they are
incurred.
2.13 Operating Leases
The determination of whether an arrangement is, or contains
a lease is based on the substance of the arrangement at
inception date of whether the fulfillment of the arrangement
is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
a. SSS as lessee
Leases which do not transfer to the SSS substantially all the
risks and benefits of ownership of the asset are classified as
operating leases. Operating lease payments are recognized
as expense on a straight-line basis over the lease term.
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.
2010 AN N UAL REPORT 35

3. CASH AND CASH EQUIVALENTS
2010 2009
Cash on hand and in banks 1,599,637,243 3,313,776,021
Time and special
savings deposits 5,779,018,770 5,681,626,470
7,378,656,013 8,995,402,491
Cash in banks earn interest at the respective bank deposit rates. Time
and special savings deposits 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.
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 in a non-drawing interest bearing current
account/savings account (CASA) with each of the banks servicing
branches. As of 31 December 2010, P94 million is being maintained
in several banks for such purpose.
4. HELD-TO-MATURITY INVESTMENTS
2010 2009
Short-term money placements 6,174,075,669 11,270,800,000
Treasury bills 1,223,531,421 2,022,828,605
7,397,607,090 13,293,628,605
Short-term money placements are short-term investments with
original maturities of more than 90 days.
5. HELD-FOR-TRADING FINANCIAL ASSETS
The cost of held-for-trading financial assets as at 31 December 2010
and 2009 are P1,872.51 million and P1,037.17 million, respectively.
6. RECEIVABLES
2010 2009
Collecting banks/agents/
bayad center 3,483,825,943 2,435,277,439
Interest receivable 2,564,234,272 2,218,145,921
Other receivables 951,306,392 681,458,938
6,999,366,607 5,334,882,298
7. OTHER CURRENT ASSETS
2010 2009
Supplies and materials inventory 77,551,114 107,185,948
Prepaid expenses 5,975,871 5,563,231
Advances-officials and employees 4,396,305 3,937,188
Revolving fund 1,022,174 1,076,467
88,945,464 117,762,834
36
8. NON-CURRENT FINANCIAL ASSETS
2010 2009
Available-for-sale
financial assets 77,414,883,712 69,294,782,362
Held-to-maturity investments Cancellation of contract - 6,155,510 - 6,155,510
Notes and bonds 105,676,840,914 82,289,672,152
Accumulated impairment loss (809,701,706) (884,701,706)
104,867,139,208 81,404,970,446
Loans and receivables Fair value, 31 December 2009 8,109,319,990 2,776,758,858 9,596,673 10,895,675,521
Member loans 43,292,288,927 44,407,118,536
Loan to National
Home Mortgage
Finance Corporation 14,003,355,778 14,990,587,912
Sales contract receivable 5,262,750,215 5,224,529,406
Housing loans 4,620,116,641 4,661,268,782
Loan to Home Development
Mutual Fund 2,739,484,368 3,316,217,919
Commercial and
industrial loans 681,392,501 888,778,261
Loan to other government
agencies 110,086,039 122,198,032
Program MADE 17,219,220 17,219,220
70,726,693,689 73,627,918,068
Accumulated impairment loss (2,600,613,796) (855,367,110)
68,126,079,893 72,772,550,958
250,408,102,813 223,472,303,766
The carrying amount of available-for-sale financial assets is as
follows:
2010 2009
Marketable securities equipment,
Cost 49,523,683,085 42,462,256,771
Unrealized gain 27,406,102,250 26,347,427,214
76,929,785,335 68,809,683,985
Ordinary and preference shares
Cost 1,208,710,857 1,208,710,857
Accumulated impairment loss (723,612,480) (723,612,480)
485,098,377 485,098,377
77,414,883,712 69,294,782,362
The current portion of held-to-maturity government notes and bonds
as at 31 December 2010 and 2009 are P3.61 billion and P8.20 billion,
respectively.
Using the BSP guidelines in identifying and monitoring problem
loans and risk assets and setting up of allowance for probable losses,
impairment provision amounting to P1.75 billion was recognized in
2010 for 5 years and above delinquent member loan accounts.
FINANCIAL STATEMENTS 2010
9. INVESTMENT PROPERTY
Land Building Development cost Total
Fair value, 01 January 2010 8,109,319,990 2,776,758,858 9,596,673 10,895,675,521
Additions - 38,588,498 89,165 38,677,663
Disposals (140,000,000) (44,076,780) - (184,076,780)
Fair value gain 927,585,210 445,109,610 - 1,372,694,820
Fair value, 31 December 2010 8,896,905,200 3,222,535,696 9,685,838 12,129,126,734
The costs of investment property as at 31 December 2010 and 2009 stood at P7.58 billion and P7.73 billion, respectively.
The fair value of investment property is determined based on valuations performed by independent appraisers.
The following amounts are recognized in the statement of comprehensive income:
2010 2009
Gain on fair value adjustment 1,372,694,820 186,376,519
Rental income 458,511,931 394,624,497
Gain on sale/disposal 63,132,286 5,438,485
Penalty on rentals 2,170,411 1,556,391
Direct operating expenses (70,943,396) (89,686,173)
1,825,566,052 498,309,719
10. PROPERTY AND EQUIPMENT
Furniture and
equipment,
transportation
Land, Buildings and computer
land/building/leasehold hardware and Construction
improvements others in progress Total
Gross carrying amount
01 January 2010 3,313,599,142 3,735,413,828 22,840,059 7,071,853,029
Additions - 140,109,224 26,997,205 167,106,429
Transfers 3,668,690 - (3,499,916) 168,774
Retirement/disposals/cancellation (197,251) (347,254,759) - (347,452,010)
31 December 2010 3,317,070,581 3,528,268,293 46,337,348 6,891,676,222
Accumulated depreciation/amortization
01 January 2010 618,739,978 2,982,704,014 - 3,601,443,992
Charge for the period 50,086,759 206,145,469 - 256,232,228
Retirement/disposals/cancellation - (341,473,708) - (341,473,708)
31 December 2010 668,826,737 2,847,375,775 - 3,516,202,512
Accumulated impairment loss
01 January 2010 56,723,750 - 56,723,750
31 December 2010 56,723,750 - 56,723,750
Net book value, 31 December 2010 2,591,520,094 680,892,518 46,337,348 3,318,749,960
Net book value, 31 December 2009 2,638,135,414 752,709,814 22,840,059 3,413,685,287
Land, buildings and building improvements were last revalued in December 2009 by independent valuers. Valuations were made on the basis of
market value.
2010 AN N UAL REPORT 37

If land, buildings and building improvements were stated on the historical cost basis, the carrying amount would be as follows: 13. OTHER NON-CURRENT ASSETS
2010 2009 2010 2009
Cost 1,694,194,129 1,694,222,606 Interest receivable 12,708,798,008 12,744,155,258
Accumulated depreciation (548,450,914) (508,769,669) Accumulated impairment loss (12,707,637,955) (12,740,230,932)
1,145,743,215 1,185,452,937 1,160,053 3,924,326
Advances-fire/MRI/
Lease rentals amounting to P12.63 million and P13.09 million for the year ended 31 December 2010 and 2009, respectively were included in the foreclosure proceedings 165,588,834 179,145,923
statement of comprehensive income. Accumulated impairment loss (953,811) (953,811)
164,635,023 178,192,112
Others 909,879,048 871,800,363
11. INTANGIBLE ASSETS Accumulated impairment loss (516,149,501) (516,149,501)
393,729,547 355,650,862
Licenses Software Total 559,524,623 537,767,300
Cost Emmanuel Y. Angeles. The return of the fund was agreed upon during
01 January 2010 291,020,968 138,757,006 429,777,974 Non-current interest receivable includes those originated from Home
Additions 4,239,649 81,672,847 85,912,496 Guaranty Corporation (HGC) guaranteed corporate notes and loan to
Retirement/disposals/cancellation (80,596,996) - (80,596,996) National Home Mortgage Finance Corporation (NHMFC) amounting
31 December 2010 214,663,621 220,429,853 435,093,474 to P120.44 million and P12.58 billion, respectively.
Accumulated amortization the books of CHEd for purposes of LEBs operational requirements and
01 January 2010 29,303,384 39,398,930 68,702,314 The Department of Finance is still evaluating HGCs request to
Amortization charge for the period 22,988,142 13,572,715 36,560,857 issue bonds to settle its guaranty obligations with the SSS. HGC
31 December 2010 52,291,526 52,971,645 105,263,171 also offered, subject to SSS evaluation, to settle all outstanding
Accumulated impairment loss guaranteed obligations through assignment and conveyance of its
01 January 2010 151,195,023 44,946,400 196,141,423 acquired assets in various locations.
Retirement/disposals/cancellation (74,893,896) - (74,893,896)
31 December 2010 76,301,127 44,946,400 121,247,527 The non-current interest receivable from loan to NHMFC represents
Net book value, 31 December 2010 86,070,968 122,511,808 208,582,776 portion of the total restructured loan amount that SSS and NHMFC
Net book value, 31 December 2009 110,522,561 54,411,676 164,934,237 have allocated to unpaid interest and penalty as of cut-off date, 31
March 2002, payment of which shall be sourced from the residuals of
The carrying amount of intangible assets with indefinite lives as at 31 December 2010 amounted to P36.66 million. the cash flows of the remaining accounts upon full payment of low,
moderate and high delinquency outstanding obligations.
12. NON-CURRENT ASSETS HELD FOR SALE
14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Acquired assets/
Land Building registered Total 2010 2009
Carrying amount, 01 January 2010 4,911,924,579 162,287,607 353,478,285 5,427,690,471 Accounts payable 2,135,812,426 1,986,268,116
Accumulated impairment loss (5,356,794) (15,173,429) (2,391,588) (22,921,811) Accrued expenses 1,102,569,442 1,261,835,646
Net carrying amount, 01 January 2010 4,906,567,785 147,114,178 351,086,697 5,404,768,660 3,238,381,868 3,248,103,762
Additional/adjustments 381,513,420 - 53,384,496 434,897,916
Disposals (9,159,558) (3,384,986) (55,115,840) (67,660,384)
Impairment (loss)/recovery 174,482 (271,889) (97,407) 15. FUNDS HELD IN TRUST
Carrying amount, 31 December 2010 5,279,096,129 143,729,192 349,083,464 5,771,908,785
Carrying amount, 31 December 2009 4,906,567,785 147,114,178 351,086,697 5,404,768,660 This account includes among others bidders deposits, withholding
taxes and retention withheld from suppliers and creditors to answer
for defective deliveries or services, contributions to GSIS, PHIC, HDMF
and SSS Provident Fund and equity of Flexi-fund members.
Breakdown as follows:
2010 2009
Flexi-fund 269,057,470 228,026,818
Officials and employees 130,020,909 131,980,533
Borrowers and other payors 120,522,057 113,877,011
Unified multi-purpose ID fund 99,392,076 -
Due to other government units 94,043,739 86,757,756
Supplies and creditors 48,020,831 35,643,494
Dividend - stock investment
loan program 15,501,904 15,501,904
Educational loan fund - DECS 1,576,846 1,497,104
Legal education fund - 10,005,556
778,135,832 623,290,176
38
FINANCIAL STATEMENTS 2010
The Flexi-fund represents equities of members under the voluntary
supplementary benefits program of the SSS for Overseas Filipino
Workers and authorized under Section 4.a.2 of the RA 8282. The Social
Security Commission (SSC), in its Resolution No. 288 dated 18 April
2001, approved the establishment of this supplementary benefits
program.
The Legal Education Fund (LEF) is a special endowment fund under
the control of the Legal Education Board (LEB), which was created
under RA 7662. It is being administered by the SSS, which invests the
same with due and prudent regard to its solvency, safety and liquidity.
On 8 March 2010, the SSS returned the P10 million fund to the
Commission on Higher Education (CHEd) through its Chairman
the 3 February 2010 meeting of the SSS Investments Group with
some members of the LEB led by its Chairman and the representatives
of CHEd. In the said meeting, they agreed that the SSS has no legal
authority to hold the fund since it represents the remaining funds in
does not form part of the LEF.
The Unified Multi-purpose ID (UMID) fund represents amount
provided by the National Statistics Office (NSO), which will be used
to pay all direct and indirect costs of the central verification and
enrollment system for the UMID as well as all costs necessary and
incidental thereto, including all expenses to be incurred related to the
formulation, drafting recommendation and approval of the project
implementation and information campaign plans.
16. DEFERRED INCOME
This account represents advance rental payments from tenants of SSS
property.
17. OTHER CURRENT LIABILITIES
This account includes among others collections credited to the
accounts pending receipt of collecting agencies documents and
actual distribution of collections and payments whose nature are not
indicated by payors.
Breakdown as follows:
2010 2009
Member loan (ML) collection 1,380,694,777 898,748,166
Real estate loan collection 534,281,784 270,324,207
Undistributed collection 428,831,056 377,824,043
ML collection deducted from
benefits payments 330,410,838 41,705,930
OFW collections 265,672,623 273,012,229
Sales contract receivable 61,091,057 81,741,630
Rental receivable 855,145 2,809,290
Employees housing loan program 117,227 31,163
Express padala 96,654 841,504
3,002,051,161 1,947,038,162
2010 AN N UAL REPORT 39

18. ACCRUED RETIREMENT BENEFITS
18.1 Retirement benefits
Retirement benefits are available to qualified employees under
any one of RA 1616, RA 660 and RA 8291.
18.2 Terminal leave benefits
This represents the cash value of the accumulated vacation and
sick leave credits of employees, 50% of which can be monetized
once a year and the balance payable upon resignation/
retirement.
18.3 Retirement incentive award
Employees with at least 20 years of creditable service are entitled to
P2,000 for every year of service upon retirement.
The accrued retirement benefits of employees at 31 December 2010
and 2009 are as follows:
2010 2009
Retirement benefits/gratuity 673,544,852 677,779,595
Terminal leave pay 621,563,865 593,323,045
Retirement incentive award 89,659,624 88,072,249
1,384,768,341 1,359,174,889
19. RENT PAYABLE
This account represents future rent payments for lease contracts
entered by the SSS for its various branches.
20. RESERVES
20.1 Investment reserve fund (IRF)
All revenues of the 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 as are 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 under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such matters
would exercise in the conduct of an enterprise of a like character
and with similar aims, subject to prescribed ceilings under Section
26 of the SS Law (the Act).
No portion of the IRF or income thereof shall accrue to the general
fund of the National Government or to any of its agencies or
instrumentalities, including government-owned or controlled
corporations, except as may be allowed under the SS Law Act.
The Act 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: 40%
in private securities, 35% in housing, 30% in real estate related
investments, 10% in short and medium-term member loans, 30%
in government financial institutions and corporations, 30% in
infrastructure projects, 15% in any particular industry and 7.5% in
foreign-currency denominated investments.
40
In its Resolution No. 402 s. 2007, the SSC, adopted the use of
acquisition cost of shares of stock as the basis for computing the
30% limit in equity investments, based on the opinion dated 25
June 2007 of the Legal and Adjudication Sector of COA.
20.2 Actuarial valuation of the reserve fund of the SSS
The Social Security Act of 1997 requires the Actuary of the System
to submit a valuation report every four (4) 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. Taking into account the uncertainty of
future events, economic assumptions on interest rates, inflation
rates and salary wage increases, among others, are projected.
In the 1999 Actuarial Valuation, the Social Security Fund (SSF)
was projected to last until 2015. Since then, parametric measures
(e.g. increases in the contribution rate from 8.4% to 9.4% in March
2003 and to 10.4% in January 2007, increase in the maximum
salary base for contributions from P12,000 to P15,000, and the
redefinition of Credited Years of Service (CYS) and operational
developments (e.g. Tellering System, more accounts officers,
cost saving measures, improved investment portfolio and
management, etc.) were implemented to strengthen the SSF.
The Systems concerted efforts have resulted in improved actuarial
soundness. Results of the 2003 Actuarial Valuation indicate an
extension on the life of the fund by sixteen years, from 2015
to 2031.
The increase in contribution rate to 10.4%, effective January 2007,
has extended further the SSF life to 2036, taking already into
account the grant of 10% across-the-board increases in pension
effective September 2006 and September 2007.
The following table presents the results of the 2007 Actuarial
Valuation, compared to the previous 2003 Valuation results. There
are two columns under the 2003 Valuation: (1) the original results
as published in the 2003 Actuarial Valuation Report; and (2) the
updated results that take into consideration the across-the-board
pension increases in 2006 and 2007 and the contribution rate
increase at the start of 2007.
Actuarial Valuation
Comparison of Key Projection Results
2007 Valuation versus 2003 Valuation
Under the Baseline Scenario
Key Projection Results 2003 Valuation 2007 Valuation
Original * Updated ** Total investment and
No Across-the- Year Fund Will Last 2031 2036 2039
Board Increase Year Net Revenue
2022 2026 2030
in Pensions Becomes Negative
* As published in the 2003 Actuarial Valuation Report
** Updated results after the increase in contribution rate to 10.4% in
January 2007 and the 10% across-the-board pension increases in
2006 and 2007
FINANCIAL STATEMENTS 2010
21. INVESTMENT AND OTHER INCOME 22. BENEFIT PAYMENTS
2010 2009 This account represents payments to members and their beneficiaries
Investment income in the event of disability, sickness, maternity, old age, death and other
Income from current contingencies resulting in loss of income or financial burden.
investments
Held-to-maturity investments
Interest income 452,568,941 1,897,400,081
Held-for-trading financial assets 23. PERSONAL SERVICES
Dividend income 25,923,712 19,836,699
Gain on fair value adjustment 1,515,595,442 356,796,375 2010 2009
Gain on sale/disposal 459,704,837 899,084,322 Salaries and wages 2,207,761,858 2,042,390,245
Investments expense (24,191,069) (57,424,537) Madatory contributions 1,178,847,346 985,359,489
1,977,032,922 1,218,292,859 Incentive award 749,088,274 743,792,358
2,429,601,863 3,115,692,940 Bonus and rice grant 506,303,033 465,204,453
Income from non-current Allowances 352,977,335 226,048,594
investments Other personal services 157,514,093 139,666,890
Available-for-sale Terminal leave pay 119,173,700 128,261,500
financial assets 5,271,665,639 4,730,723,529
Dividend income 3,414,379,491 2,916,145,314
Gain on sale/disposal 10,066,595,622 6,231,014,237 Provident fund (part of mandatory contributions) is a defined
Investment expense (1,473,850) - contribution plan made by both the SSS and its officers and
Impairment loss - (24,217,590) employees. The affairs and business of the fund are directed,
13,479,501,263 9,122,941,961 managed and administered by a Board of Trustees. Upon retirement,
Held-to-maturity investments death or resignation, the employee or his heirs will receive from the
Interest income 7,634,139,077 5,553,592,672 fund payments equivalent to his contributions, his proportionate
Penalty on overdue amortization 608 3,646 share of the SSS contributions and investment earnings thereon.
Gain on sale/disposal - 166 However, effective 28 January 2005, retired and separated members
Investment expense (604,162) (566,323) have the option to retain part or all of his total equity in the fund for
7,633,535,523 5,553,030,161 a maximum period of five years.
Loans and receivable
Interest income 2,908,825,689 2,871,301,566
Penalty on overdue 24. MAINTENANCE AND OTHER OPERATING EXPENSES
amortization 807,264,456 713,694,415
Investment expense (303,060) (602,887) 2010 2009
Impairment loss (1,746,332,726) (4,081,582) Other operating expenses 338,871,378 415,053,615
1,969,454,359 3,580,311,512 Depreciation
Investment property 1,825,566,052 498,309,719 /amortization expense 292,793,085 223,998,558
27,337,659,060 21,870,286,293 Maintenance and repairs -
Other income building/leased offices 280,436,866 275,404,010
Interest income from Light and water 178,527,241 143,671,599
cash in bank and Maintenance and repairs -
cash equivalents 389,047,630 448,511,170 furniture and equipment 164,366,293 227,988,659
Directors fee 23,359,055 11,885,142 Service bureau expenses 138,001,528 378,396,095
Non-current assets held for sale Office space rentals 128,000,180 124,087,159
Rental income 35,089,798 12,241,523 Communication expenses 127,171,098 135,151,280
Gain on sale/disposal 86,756,509 117,796,135 Supplies and materials 106,884,216 121,470,027
Related expense (5,668,009) (3,858,714) COA audit services 37,843,695 36,753,557
Impairment loss (1,479,330) (17,150,920) Maintenance and repairs -
Reversal of impairment transportation equipment 24,935,126 22,845,061
loss/revaluation decrease 108,710,662 377,533,793 Special Project 24,914,484 42,906,809
Service fee - salary loan 111,066,521 134,739,300 Impairment loss -
Others-net (236,647,210) 33,635,080 operating assets - 196,141,423
510,235,626 1,115,332,509 1,842,745,190 2,343,867,852
other income 27,847,894,686 22,985,618,802
2010 AN N UAL REPORT 41

25. OPERATING LEASE COMMITMENTS
25.1 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.
25.2 SSS as lessor
The SSS leases out portion of its office space to various tenants
under cancellable operating lease agreements. The leases have
varying terms, escalation clauses and renewal rights.
26. FINANCIAL RISK MANAGEMENT
The SSC and SSS 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 RA 8282 and compliance
to the investment procedures. Internal controls are also in place and
comprehensive audit is being done by Internal Audit Services.
The main risk arising from the SSS financial instruments are interest
rate risk, credit risk, liquidity risk and market price risk. The SSC and SSS
management review and agree on the policies for managing these risks as
summarized below.
26.1 Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of
a financial instrument will fluctuate because of changes in market
interest rates. Fair value interest rate risk is the risk that the value of
a financial instrument will fluctuate because of changes in market
interest rates.
The SSS strictly adheres to the provisions of Section 26 of the
RA 8282 which states that the funds invested in various corporate
notes/bonds, loan exposures and other financial instruments shall
earn an annual income not less than the average rates of treasury
bills or any acceptable market yield indicator. Currently, the SSS has
achieved a mix of financial investments with interest rates that are
within acceptable level. Significant investments in said instruments
have fixed interest rates while repricing rates of investments in
corporate notes/bonds that carry floating interest rates are always
based on acceptable yield (i.e. prevailing 3 months Philippine Dealing
System Transaction-Fixing Rate plus a spread of not less than 0.50%).
26.2 Credit risk
Credit risk is the risk of suffering financial loss should any of the SSS
counterparties fail to fulfill its contractual obligations to the SSS.
This includes risk of non-payment by issuers and borrowers, failed
settlement of transactions and default on outstanding contracts.
42
The SSS implements structured and standardized evaluation
guidelines, credit ratings and approval processes. Investments
undergo technical evaluation to determine their viability/acceptability.
Due diligence process (i.e. 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
(e.g. CIBI Information, Inc., banks and other institutions) are used to
determine if counterparties are credit-worthy.
With respect to stockbrokers, the SSS has adopted the following
mitigating measures:
a. Minimum requirements for stockbroker evaluation
a.1 Stockbroker is a Member of Good Standing of the Exchange as
defined under Rule 3(g) of the Securities Regulation Code.
a.2 The stockbroker shall have a minimum capitalization of fifteen
million pesos.
a.3 The stockbroker shall be profitable for three of the last five
years of operation. However, stockbrokers not able to meet
the profitability requirement may be qualified provided that
capitalization is at least thirty million pesos for those with
losses.
a.4 The stockbroker shall have a positive track record of service to
other institutional clients.
b. Stockbroker transactions, allocations and limits
b.1 Total daily transactions, excluding block transactions, per
stockbroker shall not exceed 50% of stockbroker capitalization/
stockholders equity, whichever is lower.
b.2 Total transactions, excluding negotiated block transactions, for
each of the accredited stockbrokers, during the accreditation
period, shall not exceed 15% of total SSS transactions.
b.3 Transactions, excluding negotiated block transactions, with the
SSS by the stockbroker, within the year of accreditation, shall
not exceed 40% of its total market transactions. This ensures
that the stockbroker does not rely heavily on SSS for its business.
To avoid significant concentrations of exposures to specific industries
or group of issuers and borrowers, SSS investments are regularly
monitored so that in no time shall they exceed the prescribed
cumulative ceilings specified in Section 26 of the RA 8282.
FINANCIAL STATEMENTS 2010
The following table shows the latest aging analysis of some financial assets:
2010
Past due but not impaired (Age in months)
Neither
past due
nor
impaired 3-12 13-36 37-48 49-60 Over 60 Expired Impaired Total
(In Millions)
Held-for-trading financial assets 3,331 - - - - - - - 3,331
Available-for-sale financial assets 77,415 - - - - - - 723 78,138
Held-to-maturity investments
Short-term money placements 6,174 - - - - - - - 6,174
Treasury bills 1,224 - - - - - - - 1,224
Corporate notes and bonds 12,349 - - - - - - 810 13,159
Government notes and bonds 92,518 - - - - - - - 92,518
Loans and receivable
National Home Mortgage Finance Corporation 13,867 - - - - 136 14,003
Home Development Mutual Fund 2,739 - - - - 2,739
Commercial and industrial loans 602 - - - 2 8 4 65 681
Program MADE 17 17
Other government agencies 110 - - - - - - - 110
Sales contract receivable
Investment property 87 4 1 - - - - - 92
Non-current assets held for sale 285 140 117 30 17 35 11 - 635
Available-for-sale financial assets 4,535 - - - - - - - 4,535
Employee housing loan program 421 4 1 - - 2 - 2 430
215,657 148 119 30 19 45 15 1,753 217,786
2009 Restated
Past due but not impaired (Age in months)
Neither
past due
nor
impaired 3-12 13-36 37-48 49-60 Over 60 Expired Impaired Total
(In Millions)
Held-for-trading financial assets 980 - - - - - - - 980
Available-for-sale financial assets 69,295 - - - - - - 723 70,018
Held-to-maturity investments
Short-term money placements 11,271 - - - - - - - 11,271
Treasury bills 2,023 - - - - - - - 2,023
Corporate notes and bonds 12,665 - - - - - - 885 13,550
Government notes and bonds 68,740 - - - - - - - 68,740
Loans and receivable
National Home Mortgage Finance Corporation 14,855 - - - - - - 136 14,991
Home Development Mutual Fund 3,316 - - - - - - - 3,316
Commercial and industrial loans 808 1 - 2 4 9 - 65 889
Program MADE - - - - - - - 17 17
Other government agencies 122 - - - - - - - 122
Sales contract receivable
Investment property 84 4 1 - - - - - 89
Non-current assets held for sale 292 162 90 17 13 17 9 - 600
Available-for-sale financial assets 4,535 - - - - - - - 4,535
Employee housing loan program 345 1 - - - - - 7 353
189,331 168 91 19 17 26 9 1,833 191,494
2010 AN N UAL REPORT 43

26.3 Liquidity risk
Liquidity risk arises from the possibility that the SSS may encounter
difficulties in raising funds to meet its payment obligations (i.e.
payment of benefits, working capital requirements and planned
capital expenditures) when they fall due. The 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 sufficient portfolio of highly marketable assets that can
easily be liquidated as protection against unforeseen interruption
to cash flow.
26.4 Market price risk
The SSS market price risk arises from its investments carried at
fair value (fair value through profit or loss and available-for-sale
financial assets). It manages this risk by monitoring the changes in
the market price of the investments.
27. OTHER MATTERS
27.1 Commitments
Amount authorized but not yet disbursed for capital expenditures
as of 31 December 2010 is approximately P734.53 million.
27.2 Unified Multi-purpose ID (UMID)
a. Central verification system
In line with Executive Order No. 700 dated 16 January 2008 which
mandates the SSS President and CEO to take over the work of
the National Economic Development Authority (NEDA) Director-
General to implement the streamlining and harmonization of the
ID systems of all Government-Owned and Controlled Corporations
(GOCCs) towards a unified multi-purpose ID system, the SSS
signed a Memorandum of Understanding (MOU) with National
Statistics Office (NSO) on 9 September 2009. In pursuance to the
objectives of the UMID, the parties shall build jointly, in favor of
the NSO, a central verification and enrollment system (CVES) for
the UMID. All direct and indirect costs of CVES shall be charged
against the funds provided by the NSO who in turn shall allocate a
total amount of P650 million to fund the project. Implementation
shall commence upon execution of the MOU and shall end upon
the complete turnover of the system from the SSS to the NSO.
Relative thereto, the SSS signed an Agreement with winning
bidder A LAMCO-EUROLINK JOINT VENTURE (LAMCO) on 6 May
2010. The agreement covers the supply, delivery and installation of
the central verification system (CVS) with a total contract price of
P279.97 million to be delivered within 90 days from signing of the
agreement.
An Advice of Complete Installation for SSS CVS Project was provided
by LAMCO last 24 August 2010. This gave SSS thirty (30) calendar
days within which to conduct Inspection and Acceptance Testing.
As of December 2010, the testing of the project in accordance with
the criteria described in the Agreement as well as the Acceptance
Test based on mutually agreed test procedures and parameters
were still on-going.
b. Card production
After an open and competitive bidding, the SSS signed an
Agreement with the Joint Venture composed of the ALLCARD
PLASTICS PHILIPPINES, INC., the STRADCOM CORPORATION and
the TECO ELECTRIC AND MACHINERY CO., LTD on 14 December
2009. The agreement with a total contract price of P1.69 billion
44
Internal
covers/involves the (a) production, supply and delivery of SSS UMID
Auditors Report
contactless smartcards and plastic card jackets (b) supply, delivery,
installation, customization, operation and maintenance of a card
management system (CMS) and a key management system (KMS)
(c) supply, delivery and maintenance of two hundred ninety (290)
contactless smartcard readers/writers (d) set-up of training facility
and the conduct of personnel training and (e) all other items that Internal Audit Service considers total member satisfaction as the most important gauge of the performance of SSS instead of
can be reasonably inferred as being required for the completion of figures that signify improved collections and maximum investment yields. Determining client satisfaction, however, is not an easy
CMS and KMS. Set-up and delivery of various deliverables shall be
made within 90 days from signing of the agreement. task as members have different standards in terms of service delivery. In this vein, we choose carefully each audit project by having
in mind the welfare of members and making sure that what we do redounds ultimately to their benefit.
As of September 2010, 290 units contactless card readers were
delivered and paid for in the amount of P2.32 million. However, the
local card production facility that should have been set-up is still Based on the completed and submitted audit reports for 2010, hereunder are the most significant observations:
not compliant with the following requirements: (1) submission of
permit to operate generator set and other mechanical equipment
and (2) dedicated 24/7 data communication line between the 1) Opening tellering SSS in branches is a clear strategy designed to afford members the convenience to pay their contributions
facility and SSS CMS.
and loan amortizations. However, vital requirements should not be compromised for the sake of convenience. The security and
c. Data capture safety of the funds and personnel are paramount considerations in the decision to open a tellering branch. Hence, it requires a
The SSS signed a Memorandum of Agreement (MOA) with standard layout with all the necessary facilities to prevent incidents resulting in the loss of funds. Clear policy guidelines and
Philippine Postal Corporation (PhilPost) on 12 May 2010 for the
comprehensive operating procedures are also a prerequisite.
outsourcing of the data capture and enrollment component
of the UMID project with an estimated cost of P1.26 billion
through Negotiated Procurement. Under the agreement, PhilPost
shall provide SSS with a biometric data services facility that will
2) The examination of the records of the National Home Mortgage and Finance Corporation (NHMFC) not only conforms with the
capture biometric or demographic data to be used by the SSS in provisions of the Restructuring Agreement between SSS and NHMFC, but also runs parallel to the legal mandate of ensuring
the issuance of UMID-compliant ID cards to its members. This
shall include SSS members and applicants whose biometric data prudent management of SSS investments. The SSS Lock box account was opened exclusively for the deposit of collections from the
have not yet been previously captured and/or whose data need Unified Home Lending Program and for the payment of management fees and necessary expenses. Audit covered transactions
to be updated. PhilPost shall likewise deploy such data capture
workstations, personnel and other resources so as to adequately in 2004 and 2005. The positive outcome of this project is that both management and NHMFC committed to institutionalize
service the enrollment capture/update needs of SSS ID cards mechanism for the periodic reconciliation of records.
applicants and holders. The MOA shall be effective for a period of 5
years unless extended in writing by mutual agreement of SSS and
PhilPost. 3) The Accounts Monitoring System (AMS) is an automated system design to facilitate management of employers contributions
As of December 2010, PhilPost has set-up for testing purposes delinquency. However, the technology has yet to be fully utilized by the intended users due to perceived hitches. Audit has proven
a data capture workstation in Diliman Branch. This is to ensure that while there are some deficiencies in AMS most of the major functionalities are available and working. IAS is convinced that
that the output with respect to the fingerprint, signature
and demographic data are compliant with the requirements, the AMS is an effective tool in monitoring employer delinquency.
specifications, terms and conditions provided for in the Terms of
Reference found in the Agreement.
4) In 2011, IAS will channel its energy back to the basics. Convinced that the new management will not give any stone unturned as
27.3 Tax compliance far as improving corporate governance and operating systems are concerned, IAS will perform its role with even more enthusiasm.
After all, customer satisfaction is what drives IAS to perform beyond limits and play a crucial role in the attainment of corporate
The amount of taxes withheld (net of adjustments) for the year
goals.
2010 amounted to as follows:
Income taxes withheld on compensation 583,621,430.68
Value added tax 83,664,319.54
Expanded withholding tax 60,978,852.88
728,264,603.10
Income taxes withheld on compensation and expanded
withholding tax are remitted on or before the 15th day of the ANTONETTE L. FERNANDEZ
following month except those withheld for the month of December
which should be remitted on or before the 20th day of January of Assistant Vice President
the following year. On the other hand, value added taxes withheld
are remitted on or before the 10th day of the following month. Of
the total taxes withheld by SSS, P670,620,317.97 was remitted to
the Bureau of Internal Revenue (BIR) in 2010, while the balance of
P57,644,285.13 was remitted in 2011.
2010 AN N UAL REPORT 45
 Historical Data SSS GROWTH OF ASSETS, RESERVES & INVESTMENTS
(Amounts in Million Pesos)

ASSETS RESERVES INVESTMENTS

Year AMT % INC / (DEC) AMT % INC / (DEC) AMT % INC / (DEC)
SSS Coverage and PersonNel FORCE 1959 68.2 67.6 66.2
1969 963.2 1,312.3 953.7 1,310.8 919.7 1,289.3
1979 6,750.7 600.9 6,641.6 596.4 6,608.6 618.6
FOR THE YEAR* AS OF DECEMBER 31 AS OF DECEMBER 31 1989 42,974.2 536.6 42,466.9 539.4 41,781.2 532.2
YEAR W E W E P** W/P E/P 1999 159,688.2 271.6 148,633.8 250.0 151,801.8 263.3
1959 24,719 1,211 401,769 10,956 632 636 17 2000 163,325.7 2.3 152,002.7 2.3 149,226.1 (1.7)
1969 243,857 5,063 2,329,315 88,064 1,996 1,167 44 2001 144,823.8 (11.3) 141,957.2 (6.6) 134,521.0 (9.9)
1979 612,712 11,909 7,381,193 221,000 2,328 3,171 95 2002 143,098.5 (1.2) 139,660.0 (1.6) 130,967.2 (2.6)
1989 704,665 30,358 11,775,459 327,354 3,456 3,407 95 2003 150,618.9 5.3 147,730.9 5.8 138,909.2 6.1
1999 1,152,049 25,894 21,325,966 573,314 4,041 5,277 142 2004 158,007.4 4.9 155,159.4 5.0 143,304.7 3.2
2000 1,304,866 26,868 22,630,832 600,182 3,996 5,663 150 2005 177,719.6 12.5 174,144.2 12.2 166,535.0 16.2
2001 901,834 33,124 23,532,666 633,306 3,942 5,970 161 2006 205,878.6 15.8 202,316.0 16.2 187,759.5 12.7
2002 775,367 34,733 24,308,033 668,039 3,896 6,239 171 2007 224,928.6 9.3 220,097.1 8.8 211,167.9 12.5
2003 743,201 34,535 25,051,234 702,574 4,058 6,173 173 2008 209,535.8 (6.8) 201,907.9 (8.3) 192,663.2 (8.8)
2004 615,152 32,236 25,666,386 734,810 4,043 6,348 182 2009 247,891.3 18.3 240,502.0 19.1 228,919.5 18.8
2005 561,250 23,161 26,227,636 757,971 4,169 6,291 182 2010 271,267.5 9.4 262,663.2 9.2 252,630.6 10.4
2006 511,646 23,792 26,739,282 781,763 4,135 6,467 189
2007 501,938 21,572 27,241,220 803,335 4,145 6,572 194
2008 518,348 27,020 27,759,568 830,355 4,182 6,638 199
SSS Progress of Operations
(Amounts in Million Pesos)
2009 458,364 20,036 28,217,932 850,391 4,905 5,753 173
2010 548,191 29,367 28,766,123 879,758 5,143 5,593 171
Investment and Operating Expenses
Year Contributions Other Income Benefits & Others Net Revenue
* net of termination
1957 - 1959 72.5 4.0 2.8 6.1 67.7
** regular SSS employees only
1960 - 1969 959.9 232.3 187.9 118.3 886.0
Worker (W), Employer (E), SSS Personnel (P)
1970 - 1979 5,122.3 2,573.0 1,511.8 495.6 5,687.9
1980 - 1989 23,081.0 29,353.0 15,058.7 1,751.6 35,623.7
1990 - 1999 154,417.9 123,034.2 152,474.4 16,091.3 108,886.4
2000 29,885.5 10,217.3 32,735.1 4,014.9 3,351.2
2001 30,912.0 12,390.1 37,813.5 4,211.5 1,277.0
CONSOLIDATED GROWTH OF ASSETS, RESERVES & INVESTMENTS 2002 33,702.1 9,901.2 39,566.3 4,340.5 (303.5)
(Amounts in Million Pesos) 2003 38,634.7 11,694.6 41,622.9 4,644.8 4,061.6
2004 43,083.6 7,530.1 43,743.3 5,192.0 1,678.4
ASSETS RESERVES INVESTMENTS 2005 46,714.9 10,872.9 45,180.8 5,505.9 6,781.4
Year AMT % INC / (DEC) AMT % INC/ (DEC) AMT % INC / (DEC) 2006 51,633.4 10,953.0 51,051.6 6,249.1 5,285.8
1959 68.2 67.6 66.2 2007 60,769.5 17,117.8 59,665.4 6,697.9 11,524.0
1969 963.2 1,313.3 953.7 1,310.3 919.7 1,288.9 2008 67,668.2 27,848.4 66,820.3 6,636.3 22,059.9
1979 7,258.2 653.6 7,142.6 648.9 7,098.2 671.8 2009 71,166.9 21,988.3 70,963.9 6,967.8 15,223.6
1989 48,200.9 564.1 47,693.6 567.7 46,944.2 561.4 2010 77,957.0 27,016.4 76,088.1 7,014.1 21,871.2
1999 176,875.1 267.0 165,820.6 247.7 168,336.8 258.6
2000 181,741.0 2.8 170,408.7 2.8 166,183.1 (1.3)
2001 163,113.6 (10.2) 161,234.3 (5.4) 151,015.0 (9.1)
EMPLOYEES COMPENSATION AND STATE INSURANCE FUND GROWTH OF ASSETS, RESERVES & INVESTMENTS
(Amounts in Million Pesos)
2002 162,606.4 (0.3) 159,547.7 (1.0) 149,211.0 (1.2)
2003 170,875.3 5.1 168,137.3 5.4 155,939.7 4.5
2004 179,084.1 4.8 176,386.1 4.9 160,500.4 2.9 ASSETS RESERVES INVESTMENTS
2005 199,713.2 11.5 196,287.5 11.3 181,775.4 13.3 Year AMT % INC / (DEC) AMT % INC / (DEC) AMT % INC / (DEC)
2006 228,444.5 14.4 224,995.9 14.6 205,225.5 12.9 1979 507.5 501.0 489.6
2007 247,737.2 8.4 243,016.7 8.0 225,565.3 9.9 1989 5,226.7 929.8 5,226.7 943.2 5,163.0 954.6
2008 233,122.2 (5.9) 225,602.9 (7.2) 211,355.2 (6.3) 1999 17,186.9 228.8 17,186.8 228.8 16,535.0 220.3
2009 272,610.7 16.9 265,329.8 17.6 248,641.4 17.6 2000 18,415.3 7.1 18,406.0 7.1 16,956.9 2.6
2010 297,591.3 9.2 289,095.0 9.0 273,265.6 9.9 2001 19,303.0 4.8 19,277.1 4.7 16,494.0 (2.7)
2002 19,508.0 1.1 19,887.7 3.2 18,243.8 10.6
2003 20,406.4 4.6 20,406.4 2.6 17,030.5 (6.7)
2004 21,226.7 4.0 21,226.7 4.0 17,195.7 1.0
2005 22,143.3 4.3 22,143.3 4.3 15,240.4 (11.4)
CONSOLIDATED PROGRESS OF OPERATIONS 2006
2007
22,679.9
22,919.6
2.4
1.1
22,679.9
22,919.6
2.4
1.1
17,466.1
14,397.4
14.6
(17.6)
(Amounts in Million Pesos)
2008 23,695.1 3.4 23,695.1 3.4 18,692.0 29.8
2009 24,827.9 4.8 24,827.9 4.8 19,721.9 5.5
Investment and Operating Expenses
2010 26,431.8 6.5 26,431.8 6.5 20,635.0 4.6
Year Contributions Other Income Benefits & Others Net Revenue
1957 - 1959 72.5 4.0 2.8 6.1 67.7
1960 - 1969 959.9 232.3 187.9 118.3 886.0 EMPLOYEES COMPENSATION AND STATE INSURANCE FUND PROGRESS OF OPERATIONS
1970 - 1979 5,599.3 2,677.9 1,584.0 504.4 6,188.8 (Amounts in Million Pesos)
1980 - 1989 25,114.6 32,879.0 15,791.1 1,852.7 40,349.9
1990 - 1999 158,632.2 139,020.1 158,355.9 17,177.0 122,119.4 Investment and Operating Expenses
2000 30,320.5 12,341.1 33,889.2 4,202.1 4,570.4 Year Contributions Other Income Benefits & Others Net Revenue
2001 31,371.8 14,238.9 39,015.0 4,447.4 2,148.2 1975 - 1979 477.0 104.9 72.2 8.8 500.9
2002 34,187.7 11,705.0 40,871.6 4,591.5 429.6 1980 - 1989 2,033.6 3,526.0 732.3 100.8 4,726.5
2003 39,420.4 12,763.1 42,806.4 4,776.6 * 4,600.5 1990 - 1999 4,214.3 15,985.9 5,881.6 1,085.7 13,233.0
2004 43,935.8 8,853.3 44,882.5 5,327.3 * 2,579.3 2000 435.0 2,123.9 1,154.1 185.7 1,219.2
2005 47,483.4 12,316.3 46,269.8 5,638.4 * 7,891.4 2001 459.8 1,848.8 1,201.5 235.8 871.2
2006 52,543.6 12,107.9 52,122.0 6,379.9 * 6,149.6 2002 485.6 1,803.8 1,305.3 251.0 733.0
2007 61,829.1 17,870.0 60,746.6 6,819.3 * 12,133.2 2003 785.7 1,068.5 1,183.5 131.8 * 538.9
2008 68,879.3 29,089.0 67,917.4 6,745.6 * 23,305.3 2004 852.2 1,323.2 1,139.2 135.3 * 900.9
2009 72,350.9 22,985.6 72,050.0 7,074.6 * 16,212.0 2005 887.1 1,444.4 1,089.0 132.5 * 1,110.0
2010 79,272.9 27,847.9 77,174.2 7,114.4 * 22,832.2 2006 910.2 1,154.9 1,070.4 130.8 * 863.9
2007 1,059.6 752.2 1,081.2 121.4 * 609.2
* Excludes SS-EC Share in the Corporate Operating Budget of ECC and OSHC 2008 1,211.1 1,240.6 1,097.0 109.3 * 1,245.4
2009 1,183.9 997.3 1,086.0 106.8 * 988.4
2010 1,315.9 831.5 1,086.0 100.3 * 961.0

* Excludes SS-EC Share in the Corporate Operating Budget of ECC and OSHC
46 2010 AN N UAL REPORT 47
 SOCIAL SECURITY COMMISSION
From Left to Right: Com. Marianita O. Mendoza, Com. Daniel L. Edralin, Com. Eliza Bettina R. Antonino,
President and CEO and Vice Chairman Emilio S. De Quiros, Jr., Chairman Juan B. Santos, Secretary of Labor and
Com. Rosalinda Dimapilis-Baldoz, Com. Diana Pardo-Aguilar, Com. Bienvenido E. Laguesma, Com. Ibarra A. Malonzo

48 2010 AN N UAL REPORT 49

 OFFICES UNDER PRESIDENT AND CEO corporate serviceS sector
From Left to Right: (top photo) President and CEO Emilio S. de Quiros, Jr., VP Marissu G. Bugante, Special From Left to Right: (top photo) VP Nicholas C. Balbuena, VP Alfredo S. Villasanta, AVP Hidelza B. Castillo,
Assistant to the President and CEO Edmund P. Lee, Department Manager 3 Joselito A. Vivit, AVP Renato N. Malto, AVP Elvira G. Alcantara-Resare, SVP Miguel E. Roca, Jr.
Special Assistant to the President and CEO Maria Lourdes N. Mendoza, AVP Santiago Dionisio R. Agdeppa,
and SVP Amador M. Monteiro From Left to Right: (bottom photo) VP Gwen Marie Judy D. Samontina, VP Antonio G. Maralit, VP Jesse J. Caberoy,
AVP Daisy S. Real, AVP Johnsy L. Mangundayao
From Left to Right: (bottom photo) AVP Joel P. Palacios, AVP Antonette L. Fernandez, CEO V Juanita L. Reyes,
VP Rizaldy T. Capulong, and VP May Catherine C. Ciriaco
50 2010 AN N UAL REPORT 51
 SSC CHAIRMAN, SSS PRESIDENT & CEO AND SECRETARY TO THE COMMISSION
From Left to Right: AVP Renato M. Custodio, Vice Chairman Emilio S. De Quiros, Jr.,
Chairman Juan B. Santos, VP Milagros M. Pagayatan
PRESIDENT & CEO AND PROGRAM MANAGEMENT GROUP
From Left to Right: VP Mario R. Sibucao, AVP Leticia B. Ong, President and CEO Emilio S. de Quiros, Jr.,
SVP Judy Frances A. See, VP Antonio S. Argabioso, VP Agnes E. San Jose
52
INVESTMENTS SECTOR
From Left to Right: OIC Emmanuel A. Trinidad, AVP Ma. Luz C. Generoso, AVP Mariano Pablo S. Tolentino,
EVP Edgar B. Solilapsi, AVP Lilia S. Marquez, VP Rizaldy T. Capulong, VP Gamelin Z. Oczon
BRANCH OPERATIONS SECTOR - NATIONAL CAPITAL REGION OPERATIONS
GROUP AND OFFICES UNDER EVP BOS
From Left to Right: AVP Alberto C. Alburo, AVP Vicente A. Curimao, AVP Josie G. Magana,
EVP and Chief Actuary Horacio T. Templo, AVP Consolacion M. Cancio, VP Naciancino L. Monreal,
Special Assistant to the Executive Officer BOS Reynaldo C. Oriel
2010 AN N UAL REPORT 53
 SSC & SSS

Management Directory
SOCIAL SECURITY COMMISSION ASSISTANT VICE PRESIDENT, DIVISION DEPARTMENT HEAD AND OFFICER-IN- HYDEE R. RAQUID AMELIA A. GUILLERMO
HEAD AND EQUIVALENT RANK CHARGE Support Services Audit Department Welcome Branch
JUAN B. SANTOS
Chairman VILMA P. AGAPITO LEO CALIXTO C. ABAYON GUILLERMO M. URBANO, JR.* LUZVIMINDA J. LIMCAUCO
Luzon Central Division Network and Communications Investments Research and Support Binondo Branch
EMILIO S. DE QUIROS, JR. Department Department
Vice-Chairman SANTIAGO DIONISIO R. AGDEPPA ADELINA A. LIQUE
Operations Legal Department ROBERTO B. BAUTISTA CECILIA S. ROA* Malabon Branch
DIANA PARDO-AGUILAR International Affairs Department Contributions Accounting Department
DANIEL L. EDRALIN ALBERTO C. ALBURO MA. LUZ N. BARROS-MAGSINO
ELIZA BETTINA R. ANTONINO NCR Central Division AUREA G. BAY MA. SALOME E. ROMANO Manila YMCA Branch
BIENVENIDO E. LAGUESMA Office of the EVP for Branch Operations Information Systems Security
MARIANITA O. MENDOZA ELVIRA G. ALCANTARA-RESARE Sector Department PRISCILA F. MARALIT
IBARRA A. MALONZO Financial and Budget Division Cainta Branch
ROSALINDA D. BALDOZ MARILOU M. BETIC NESTOR R. SACAYAN
Members CONSOLACION M. CANCIO Investments Accounting Department Engineering and Maintenance FELIZARDO B. MINOR, JR.
NCR South Division Department San Mateo Branch
SSS MANAGEMENT FELIPE R. CABAERO
HIDELZA B. CASTILLO Computer Resource Management JOSE ANTONIO L. SALAZAR FERNANDO O. NICOLAS*
PRESIDENT and CEO Application Systems Division Department ID Card Production Department Marikina Branch

EMILIO S. DE QUIROS, JR. RENATO M. CUSTODIO REGINALD G. CANDELARIA* CARMEN O. SORIANO NCR SOUTH DIVISION
President and Chief Executive Officer Commission Legal Department - I Equities Department Management Support Services
Department SONIA C. ABRERA
EXECUTIVE VICE PRESIDENT AIDA V. DELOS SANTOS ELEONORA Y. CINCO Makati-Gil Puyat Branch
Luzon South Division Quality Management Department SYLVETTE C. SYBICO
EDGAR B. SOLILAPSI Foreign Branch Expansion and HELEN L. ABOLENCIA
Investments Sector NILO D. DESPUIG ROSA T. CRISOSTOMO Monitoring Department San Juan Branch
Bicol Division Planning and Standards Department
HORACIO T. TEMPLO MARISSA L. TIZON MARIA RITA S. AGUJA
Branch Operations Sector ANTONETTE L. FERNANDEZ GLORIA Y. CUISIA Human Resource Services Department Makati Ayala Branch
Internal Audit Services Division Branch Evaluation Department
SENIOR VICE PRESIDENT ARNOLD A. TOLENTINO TERESITA L. ARAOS
RODRIGO B. FILOTEO CELSO C. CUNANAN Management Information Services Pasay-Roxas Boulevard Branch
JOSE B. BAUTISTA Western Mindanao Division Data Center Operations Department Department
Luzon Operations Group LETICIA G. BARBERS
JOSEFINA O. FORNILOS ELPIDIO S. DE CHAVEZ IKE A. TUBIO Alabang Branch
EDDIE A. JARA Northern Mindanao Division Branch Support Services Department Fraud Investigation Department
Visayas and Mindanao Operations Group RHODORA G. BONITA

BRANCH OPERATIONS SECTOR - LUZON OPERATIONS GROUP AMADOR M. MONTEIRO

Chief Legal Counsel
MA. LUZ C. GENEROSO
Housing Department
MARIE ADA ANGELIQUE T. DE SILVA
Member Loans Program Management
Department
JOY A. VILLACORTA
Overseas Filipino Workers Program
Management Department
Pasay-Taft Branch

MA. LOURDES T. FLORES

From Left to Right: EVP and Chief Actuary Horacio T. Templo, AVP Aida V. Delos Santos, SVP Jose B. Bautista, EDMUND D. LEE Makati JP Rizal Branch
MIGUEL E. ROCA, JR. Office of the President and CEO EUGENIA D. DELA CRUZ MARIVIC S. VILLARAMA
Cluster Head Vilma P. Agapito, Cluster Head Nilo D. Despuig, AVP Luis V. Olais Information Technology Management Member Relations Department Enterprise Systems Support Department CRISTINE GRACE B. FRANCISCO
Group JOSIE G. MAGANA Paraaque Branch
NCR North Division NORMITA M. DOCTOR ANITA A. VILLENA
JUDY FRANCES A. SEE Sickness, Maternity and Disability Office Services Department FE MARIE F. GERALDO
Program Management Group RENATO N. MALTO Program Management Department Taguig Branch
Records and Information Management JEAN V. LAGRADA
VICE PRESIDENT & EQUIVALENT RANK Department BELINDA B. ELLA Budget Department LIBERTY A. GORDOVEZ*
General Accounting Department San Juan Branch
ANTONIO S. ARGABIOSO JOHNSY L. MANGUNDAYAO BRANCH HEAD/OFFICER-IN-CHARGE
Coverage and Collection Program Operations Accounting Division JOCELYN M. EVANGELISTA MARCIANA A. MARQUEZ
Management Division Branch Operations Audit Department NATIONAL CAPITAL REGION (NCR) Mandaluyong Branch
LILIA S. MARQUEZ OPERATIONS GROUP
NICHOLAS C. BALBUENA Corporate Bonds and Loans Department ROGELIO A. FUNTELAR AMALIA N. TOLENTINO
Computer Operations Division Front-End IT Support Department NCR CENTRAL DIVISION Las Pias Branch
LUIS V. OLAIS
MARISSU G. BUGANTE Luzon North Division SONIA P. GUINTO* ARTHUR O. ABARY LUZON OPERATIONS GROUP
Public Affairs and Special Events Division Corporate Communications Department Novaliches Branch
LETICIA B. ONG LUZON NORTH DIVISION
JESSE J. CABEROY Medical Program Management ROSALINA C. MANANSALA JOCELYN Q. GARCIA
Human Resource Management Division Department Collection Data Processing and San Francisco Del Monte Branch JOSEPHINE C. ABRIL
Reconciliation Department La Union Branch
RIZALDY T. CAPULONG REYNALDO C. ORIEL JOSEFINA EDITA F. MATA
Capital Market Division/Actuarial Office of the EVP for Branch Operation MARY ANN R. MANDAP Commonwealth Branch ESTRELLA R. ARAGON
Department and concurrent Deputy Sector Commission Secretariat Department Cauayan Branch
Chief Actuary ELIZABETH C. REYES
JOEL P. PALACIOS NORA M. MERCADO Diliman Branch PORFIRIO M. BALATICO
MAY CATHERINE C. CIRIACO Media Affairs Department Self-Employed and Voluntary Member Tuguegarao Branch
Management Services and Planning Program Management Department LORELEI B. SOLIDUM
Division EMMANUEL R. PALMA Cubao Branch JANET D. CANILLAS
Southern Mindanao Division VAN RENE M. ORPILLA Vigan Branch
ANTONIO G. MARALIT Applications Development and NCR NORTH DIVISION
Planning and Research Division DAISY S. REAL Maintenance Department - I BENEDICTA B. GARCIA
Human Resource Staffing and CYNTHIA O. BARCELON Bangued Branch
MARIA LOURDES N. MENDOZA Development Department ALAN GENE O. PADILLA Pasig Shaw Branch
Office of the President and CEO Applications Development and BENJAMIN R. LOPEZ
JUANITA L. REYES Maintenance Department - III AVELINA M. BAUTISTA Baguio Branch
NACIANCINO L. MONREAL Office of the President and CEO Valenzuela Branch
NCR Operations Group VENUS D. PASCUAL ROMEO E. REYES
HELEN C. SOLITO Branch Accounting Department VIRGINIA F. CALASAHAN Santiago, Isabela Branch
GAMELIN Z. OCZON Central Visayas Division Pasig Palatiw Branch
Treasury Division FAUSTINO P. PICONES* PAULINA YG. SANTOS*
MANOLITO C. TAGALOG Technology Research Department MILAGROS N. CASUGA Solano Branch
MILAGROS M. PAGAYATAN Western Visayas Division Kalookan Branch
Office of the Commission Secretary VICTORIA A. POQUIZ NANCY M. UMOSO
MARIANO PABLO S. TOLENTINO Health Care Department ZARA M. DIZON Laoag Branch
GWEN MARIE JUDY D. SAMONTINA Asset Management Department Legarda Branch
Technical Support Division DAMIANA A. QUEZON ABELARDO C. YOGYOG
EMMANUEL A. TRINIDAD* Applications Development and BERLITA F. FABRERO Bontoc Branch
AGNES E. SAN JOSE Cash Department Maintenance Department - II Antipolo Branch
Benefits Program Management Division
JOSELITO A. VIVIT
MARIO R. SIBUCAO Corporate Legal Department
Service Delivery Program Management

BRANCH OPERATIONS SECTOR VISAYAS AND MINDANAO OPERATIONS GROUP Department

ALFREDO S. VILLASANTA
From Left to Right: AVP Emmanuel R. Palma, AVP Helen C. Solito, AVP Rodrigo B. Filoteo, EVP and General Services Division
Chief Actuary Horacio T. Templo, SVP Eddie A. Jara, AVP Josefina O. Fornilos, AVP Manolito C. Tagalog

*Officer-in-Charge
54 2010 AN N UAL REPORT 55
 LUZON CENTRAL DIVISION TITO A. NAVA FELICITAS A. DEMANDANTE WESTERN MINDANAO DIVISION
Carmona Branch Sagay Branch
JOSE ALVIN M. ALTRE JAMES B. BUCKLY
Urdaneta Branch MARINA PAULINA G. PANTE REYNALDO V. ESPINOSA Pagadian Branch
Infanta Branch Roxas Branch
SIMPLICIA M. BANIAGO ELIZABETH G. CABATINGAN
Malolos Branch ANTONIO V. SORIANO SOCORRO B. FERRER Zamboanga Branch
Bian Branch Kabankalan Branch
MARILOU M. SANTOS*
Iba Branch WENCESLAO G. VIRTUCIO, JR. JANE T. GARGOLES JAIME S. CASUMPANG
San Pablo Branch Victorias Branch Basilan Branch
NORMITA M. CRUZ
Mariveles-BEPZ Branch BICOL DIVISION VICTOR M. NICOR RUDY M. LACANDALO
Bago City Branch Ipil Branch
MARITES A. DALOPE NILO D. ALMOSERA
Sta. Maria Branch Masbate Branch ESTEBAN L. PANES, JR. GODOFREDO M. MARTINEZ
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PABLITA A. DAVID DIVINA T. AVILA
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CORITA M. GADUANG ALBERTO R. BONAFE, JR.
Pampanga Branch Sorsogon Branch IRENEO T. VILLAFLOR SSS FOREIGN REPRESENTATIVE OFFICES
Dumaguete Branch
ELIZABETH R. GARCIA ANTONIO A. CASIMIRO FOREIGN BRANCH EXPANSION
Balanga Branch Tabaco Branch NORTHERN MINDANAO DIVISION MONITORING DEPARTMENT & POEA

ROLANDO C. MENDOZA BEATRIZ C. GUMABAO EDWIN M. ALO SONIA A. DOMINGO

Baler Branch Goa Branch Cagayan de Oro Branch SSS POEA Office

MARIA MAXIMA C. MACARAEG CLARIBEL L. REBUENO PERKINS B. CALIXTRO ASIA & PACIFIC
Olongapo Branch Naga Branch Camiguin Branch
MARIVIC G. RUTOR
ALBINA LEAH C. MANAHAN ELENITA S. SAMBLERO BENIGNO J. DAGANI, JR. Brunei Representative Office
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ROBERTO V. ROLDAN
LAURA M. MARIANO VIRGILIO A. SANTIAGO ANTONIO G. FABIA Hong Kong Representative Office
Angeles Branch Daet Branch Valencia Branch
JOSEFINA A. MADURO
NARCISO M. MARTINEZ, JR. PRISCO S. SORSONA ANNA PEARL J. FUENTES Singapore Representative Office
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FRENELIE ANN L. ONG
MONALISA C. NARDO VISAYAS AND MINDANAO OPERATIONS JOSE ROEL J. HERBIETO Taipei, Taiwan Representative Office
Camiling Branch GROUP Oroquieta Branch
MIDDLE EAST
CEASAR P. SALUDO CENTRAL VISAYAS DIVISION MA. RAINE L. JAMERO
Dagupan Branch Butuan Branch WILMA M. ORTIZ
GEMMA C. CABERTE Abu Dhabi, UAE Representative Office
MARILOU M. SANTOS* Ormoc Branch CHERYL V. JARIOL
Iba Branch Iligan Branch ABDAWIYA K. NAVARRO
LILIBETH A. CAJUCOM Al-khobar, KSA Representative Office
GUILLERMO S. TARUC Tacloban Branch OSWALDO B. MONTENEGRO
Tarlac Branch Tandag Branch BENNETTE A. CUETO
NICETA M. CARRETAS Doha, Qatar Representative Office
LUZON SOUTH DIVISION Cabalogan Branch MARILYN O. TAMAYO
Gingoog Branch HARRY A. RACHO
JESREL H. ANCHETA ERIC A. CORONADO Jeddah, KSA Representative Office
Boac Branch Toledo Branch
SOUTHERN MINDANAO DIVISION FRANCISCO U. UY
GREGORIO P. ASENDIDO MARIO V. CORRO Kuwait Representative Office
Calapan Branch Cebu Branch JOSE S. CATOTO, JR.
General Santos City Branch DANILO Q. CALAPE
SANTISIMA ROSARIO C. BAAC MAGDALENA H. DINCILLO* Riyadh, KSA Representative Office
Puerto Princesa, Palawan Branch Mandaue Branch JOVE L. COLASITO
Davao Branch EUROPE
CORAZON L. BALAGBIS RODRIGO B. GREGANA
Batangas Branch Maasin Branch RIZALITO ALBERTO C. DE LEON ALFREDO JOSE I. RECIO, JR.
Toril Branch London, United Kingdom Representative 2010 ANNUAL REPORT COMMITTEE
VICTORINA G. CARLOS ALBERTO L. MONTALBO Office
Tagaytay Branch Lapu-Lapu Branch SERAFIN G. HINGCO
Kidapawan Branch THELMA V. VENTURANZA
VIRGINIA S. CRUZ BENJAMIN A. POMBO Milan, Italy Representative Office Chairperson: VP May Catherine C. Ciriaco
Bacoor Branch Calbayog Branch EDGAR P. JUANICH
Digos Branch FRANCISCO B. BACOL
JOSEPHINE S. HIPOLITO MARINO B. TALICTIC Rome, Italy Representative Office Vice Chairperson: VP Marissu G. Bugante
Sta. Cruz Branch Tagbilaran Branch SUKARNO D. PENDALIDAY
Cotabato City Branch
NELSON P. IBARRA WESTERN VISAYAS DIVISION Members: SVP Jose B. Bautista
Calamba Branch ROSELANE B. PLAZA VP Antonio S. Argabioso
ELVIRA B. BANICO Mati Branch
VICTORIA A. LIWANAG Iloilo Branch VP Rizaldy T. Capulong
Lucena Branch SUZETTE H. PURIFICACION AVP Ma. Luz C. Generoso
LILANI B. BENEDIAN Tacurong Branch
ROBERTO D. MARCELO Bais Branch
AVP Elvira G. Alcantara-Resare
San Jose, Occidental Mindoro Branch JULIOUS J. WALES Atty. Joselito A. Vivit
RAUL A. CASIANO Bislig Branch Ms. Marissa L. Tizon
ROBERTO S. PAGAYUNAN Bacolod Branch
Lipa Branch VALERIANO P. WENCESLAO, JR.
ISAAC P. CIOCON, JR. Tagum Branch Consultant: Ms. Maria Lourdes N. Mendoza
EXEQUIEL O. PANGANIBAN Kalibo, Aklan Branch
EPZA Branch REDENTOR S. VIOLA
Koronadal Branch Secretariat: Ms. Grace B. Burgos
Mr. Virgilio M. Macapagal
Ms. Guia O. Ongchangco
Ms. Gilby G. Oribello
Mr. Zandro Carlos P. Sison
Mr. Ireneo Ma. P. Taala II

*Officer-in-Charge

56
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