Whereas, Rule V, Section 1, par. (1) of the Amended Rules on Employees' Compensation provides that the rate of contribution to the GSIS-SIF, which is being administered by the GSIS, is equivalent to one percent of the basic salary but not to exceed P30 per month per employee;

    Whereas, this rate of contribution, pegged by the Commission on 1979 through Resolution No. 1451, has remained the same up to the present;

    Whereas, the incidence and levels of benefits for work-connected illnesses and injuries have increase such that since 1983, the total amount of benefits paid for workers' claims have exceeded the total amount of contributions collected by the GSIS-SIF. Consequently, the GSIS-SIF was unable to accumulate enough funds that could have generated investments earnings to pay part of benefit claims;

    Whereas, since 1984, the GSIS-SIF has experienced losses that depleted its surplus and, starting 1992, it was forced to resort to inter-fund borrowings from GSIS Optional Life Insurance Fund (OLIF) and General Insurance Fund (GIF) to pay all claims;

    Whereas, the insufficiency of contributions to pay all EC claims is aggravated by the failure of the Department of Budget and Management (DBM) and other agencies to pay all their arranges in EC contributions to the GSIS for the period 1992 to the present;

    Whereas, as of December 31, 2001, the GSIS-SIF has a total inter-fund borrowing of P3.2billion and negative surplus of P2.6 billion;

    Whereas, to restore the actuarial solvency of the GSIS-SIF to increase EC benefits to the level enjoyed by private sector workers, and to pay all inter-fund borrowings, the GSIS upon instruction of the Commission, conducted an actuarial study proposing an increase in the maximum amount of contribution from P30 per month per employee to p100 per month per employee effective Calendar Year 2003;

    Whereas, the commission had advised the DBM, as early as 2000, of the financial status of the GSIS-SIF, and of the need to collect all arrearages in contributions immediately and to increase the rate of contribution;

    Whereas, the GSIS has stopped inter-fund borrowings in order to preserve the financial status viability of its OLIF and GIF. Consequently, not all EC claims can be paid because of the insufficiency of contributions collected;

    Now, therefore, be it resolved, to amend Rule V, Section 1, paragraph 1 of the Amended Rules on employees' Compensation by increasing the maximum amount of contribution to the GSIS-SIIF fro P30 to 1% of the basic salary or P100 per month per employee whichever is lower effective Calendar Year 2003, subject to review at anytime, thereafter;

    Resolved furhter, to urge the DBM and other government agencies to immediately remit to the GSIS-SIF all arrearages in EC contributions;

    Resolved finally, to exhaust all means within its power to ensure that the increase in the EC contributions to a maximum of P100 per month per employees is duly included in the General Appropriation Bill and the respective budgets for other government agencies, and for this purpose, provide the DBM and other government agencies a copy of this Resolution for them to undertake the necessary actions to implement this Resolution;

    Approved, in Quezon City, 11 April, 2002