The bilateral social security agreement between the Philippines and Germany, ratified by President Benigno Aquino III and approved by the Senate, will benefit, according to De Quiros, some 55,821 Filipinos in Germany, of whom 45,647 are permanent and 10,174 temporary residents. Although many countries have multilateral totalization agreements (especially among members of the European Union), U.S. agreements are required by law to be only bilateral. Therefore, if a worker earns 6 or more QCs and has additional working time in each of the two countries with which the United States has a totalization agreement, only the coverage periods of one country or another can be combined with the QCs to entitle these workers. The agreements also contain provisions preventing SSAs from taking into account periods of foreign coverage that were earned prior to the creation of the U.S. Social Security Program in 1937 or that overlap with coverage periods already credited by U.S. law. Totalization agreements are popular with U.S. companies because they exempt employers from paying a dual social security tax. According to a regular study of net tax savings by the Office of International Programs of the Social Security Administration (SSA), U.S. companies and their employees save about $1.5 billion a year in foreign social taxes based on these agreements. These tax savings help make U.S. operations more profitable around the world, while improving the competitiveness of U.S.
trade. The totalization agreements also excuse foreign workers temporarily sent to the United States for payment of U.S. Social Security taxes. The result is annual savings of approximately $500 million for the foreign workers involved and their employers. These tax savings make the United States a more attractive destination for foreign capital, thereby encouraging foreign direct investment. Aquino not only supported equal treatment in the workplace, but said the bilateral agreement „will also improve the handling of claims and prevent double coverage. This will therefore benefit both Filipino and German nationals,“ he added after talks with German Chancellor Angela Merkel in Berlin. All of these agreements are based on the concept of shared responsibility. Responsibility-sharing agreements are reciprocal. Under each agreement, partner countries make concessions to their social security qualification rules so that those covered by the agreement have access to payments that they may not be eligible for.