Adoption of Agency Accounting System for Compulsory Contributions/Premiums

January 13, 1981

LETTER OF INSTRUCTIONS NO. 1102

 

WHEREAS, the social-security and insurance program of the Philippines is internationally recognized as one of the most advanced programs in the world both in number of contingency benefits and scope of application; casia

WHEREAS, the benefits under the program become meaningful and serve the purpose intended by the law only if they are paid in right amounts to the rightful claimants when and as they fall due;

WHEREAS, the expeditious settlement of these benefits for government employees depends to a large measure on the prompt payment and systematic accounting of the contributions mandated by law to be remitted to the Government Service Insurance System;

WHEREAS, the Government Service Insurance System, recognizing this need, had prescribed an Agency Accounting System to effectively and efficiently account for all contributions provided under the Revised Government Service Insurance Act of 1977 (PD 1146), Philippine Medical Law (RA 6111), and the Employees' Compensation Law (PD 626) to fund the sickness income, medical care, disability, life insurance, old age, death, employees compensation and survivorship benefits granted to government employees under the said laws;

WHEREAS, the cooperation and assistance of all government agencies are needed in the implementation of the Agency Accounting System; aisa dc

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order and instruct:

SECTION 1. The Ministry of the Budget and the managing heads of all government-owned or -controlled corporations shall remit directly to the Government Service Insurance System quarterly in advance the government shares of the compulsory contributions due under Presidential Decree No. 1146, Republic Act No. 6111, and Presidential Decree No. 626, as amended, from the approved appropriations of all the bureaus, offices and agencies of the National Government and the government-owned or -controlled corporations. In case certain positions in the approved budget are not filled up or become vacant, the unearned contributions for the period covered by the advance payment shall be credited or applied to the next remittance of the agency concerned. The personal shares of the compulsory contributions shall be deducted by the agency from the salaries of its employees and shall be remitted to the System on or before the tenth (10th) day of the month following the month to which the said personal contributions apply. The remittance shall be supported by a Premium Remittance Advice prescribed by the System. acd

SECTION 2. The heads of local governments shall likewise remit directly to the GSIS their shares of compulsory contributions due under the laws mentioned in the preceding paragraph from their approved special budget subject to the same conditions stated in Section 1 hereof. The Ministry of Finance and the Ministry of Local Governments and Community Development are hereby enjoined to assist in the implementation of this provision affecting the local governments' compulsory contributions by prescribing the necessary rules and regulations applicable in the matter.

SECTION 3. The Ministry of the Budget, in accordance with existing budgetary policy, shall prescribe rules and regulations related to the remittance to the GSIS of the compulsory contributions with the end in view of ensuring that contributions made shall be in accordance with the number of government officials and employees actually covered by the System pursuant to the provisions of the above-cited laws.

SECTION 4. All agencies shall permit to the System all outstanding compulsory contributions payable under Presidential Decree No. 1146 and its antecedent laws, Republic Act No. 6111, and Presidential Decree No. 626, as amended, including personal and government shares, as appearing in their books of accounts as of a cut-off date to be determined by the System duly verified by the representatives of the Commission on Audit. cd i

SECTION 5. The System shall consider as fully paid all compulsory contributions of the agencies concerned, including personal and government shares, upon receipt of their remittance made under the preceding paragraph, subject to such rules and regulations as may be prescribed by the System.

SECTION 6. The System shall collect from the ministry or agency concerned any undeducted and/or unremitted compulsory contributions that may be found outstanding upon verification by the GSIS, with recourse by the said agencies to deduct from the employees' salaries their corresponding unpaid personal shares. This is, however, without prejudice to the application of appropriate remedies and penalties provided under existing laws and decrees for nondeduction, nonremittance, and/or misappropriation of the contributions/premiums due the System.

SECTION 7. The System shall issue the necessary circular to implement the provisions of this Letter of Instructions.

SECTION 8. This Letter of Instructions shall take effect immediately.

DONE in the City of Manila, this 13th day of January, 1981.