Investment, Philheath, SSS Updates
DOF flags GSIS, SSS, PhilHealth accounting method
DOF flags GSIS, SSS, PhilHealth accounting method
The Department of Finance (DOF) has ordered three government social institutions (GSIs) to report their social benefit liabilities in full compliance with the Philippine Financial Reporting Standards (PFRS) 4. (SBLs).
Finance Secretary Carlos G. Dominguez III revealed in a press conference on Friday, Dec. 3, that the Social Security System (SSS), the Government Service Insurance System (GSIS), and the Philippine Health Insurance Corporation (PhilHealth) were not reporting their liabilities correctly. SBLs represent the GSIs’ net legal responsibility to pay their policyholders precise, guaranteed sums of money or benefits, which includes both actual claims and the needed reserve for future claims.
“This mandate is in line with the Duterte administration’s efforts to guarantee that GSI financial disclosures are transparent and based on facts,” said Dominguez, the Social Security Commission’s concurrent chairman.
PFRS 4 is the Philippines’ current and interim accounting standard for insurance companies. It was adapted from the International Financial Reporting Standards, or IFRS, which provides guidelines on how to properly account for insurance contracts’ financial transactions. Under PFRS 4, an insurance entity must set aside a reserve to satisfy its liabilities when it receives money from its members and enters into a contract with them to provide monetary obligations when specified events occur. As a result, the contributions/premiums/fees received by GSIs should be reported as both revenue and liabilities in their financial statements.
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