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Duterte defies economic execs, okays SSS pension hike

President Duterte, going against the advice of his economic managers, approved yesterday a P1,000 increase in the Social Security System (SSS) monthly pension for immediate implementation.
In a memorandum last month, Finance Secretary Carlos Dominguez, Budget Secretary Benjamin Diokno and Socioeconomic Planning Secretary Ernesto Pernia urged Duterte not to implement the first phase of the SSS pension increase that already obtained  the approval from Congress without a counterpart plan to raise collections of the state pension fund.
The economic officials warned the fund would run out by 2032 if Mr Duterte approves the pension, which, however, was among his campaign promises.
In a joint press conference with SSS executives, Presidential spokesman Ernesto Abella said the President chose to fulfill the “social contract” he has with the people over his supposed “fiscal responsibility,” saying that Mr. Duterte is “President of an entire nation and not just a particular social class”.
The pension hike, however comes with a slight increase of 1.5 percent in the monthly collection of employees currently enrolled in the SSS.
“The President has approved a P1,000 pension increase this month, with a corresponding 1.5 percent contribution rate hike in May 2017 and an increase in monthly salary credit to 20,000 based from 16,000,” Abella said.
“President Duterte seeks to fullfill a social contract with the Filipino people especially the elderly and the poor, to give them their best lives in service. Whileexercising fiscal responsibility, to ensure the economic sustainability and protect those who invested in the nations future,” he added.

  No subsidy for pension hike
Abella allayed fears of the SSS fund being depleted saying its life is good until 2042, adding that the President is confident that it will be eventually recovered through measures raised during a Cabinet meeting last Monday night.
“The President is not amenable to using taxpayers’ money to fund the  pension increase since the SSS is a private pension fund. Its total assets are P487 billion as of October 2016 and its fund life is until 2042. Even with the thousand peso increase, the fund life will continue until 2040 by May 2017 when the contribution rate and increase in monthly salary credit is implemented,” Abella said.
“By May 2017, a 1.5 contribution rate increase will be implemented or 12.5 percent from the current 11 percent contribution rate. In peso value, the additional total contribution will range from P15 to P740 equally shared by employer and employee,” he explained.
Abella also noted that the President is going to hunt down employers who do not remit employees contributions.
“To ensure sustainability, SSS is setting in place, one: legal action plans to reduce contribution delinquency. For example, intensify legal  collection and referred delinquent and non-compliant employers,” he said.
Anticipating a potential backlash when it comes to fiscal concerns, SSS President Emmanuel Dooc said increasing SSS contributions was inevitable.
“We need to increase the contribution so we can  afford to pay for the across-the-board pension increase. We will be increasing the contribution rate by 1.5 percent every year. This is calibrated,” Dooc said, noting that all SSS members are covered by the contribution rate hike.
“We know the impact if we implement the increase at the same time... We need to come up with a formula to calculate the right benefits for members,” he added.
Moreover, the SSS President says that the pension increase will be felt by beneficiaries by February, not this month, due to some technical and system matters.
“We can effect the payment of additional pension increase by February. But don’t be concerned with the fund for the pension hike. We have already set that aside,” Dooc said.
First filed in the 16th congress by militant lawmakers, the SSS pension hike originally amounts to P2,000 with the first tranche at P1,000.
Nonetheless, former University of East Law Dean and SSS chairman Amado Valdez said that the second tranche (or the other half of the proposed P2,000 pension increase) is likely to be given by 2022 or even at an earlier year if the SSS is able to “collect contributions effectively”.
“We’re committed that this is not just the first ameliorative move but a start of a series. Our objective for another P1,000 increase is until 2022. It may even come by 2019, who knows,” Valdez said.
“The SSS is confident that we can shore up the actuarial life of the fund. We should create that self-reliance because an institution like the SSS is a dependent institution,” he stressed.
Counterpart measures needed
Duterte instructed the SSS to incorporate the proposal of the economic managers to ensure the sustainability of the pension fund by implementing an additional 1.5 percent contribution rate and lifting the maximum monthly salary credit (MSC) to P20,000 from the current P16,000 by May 2017.
Duterte said that “SSS should be seen as long-term savings and not an expense,” adding that actively-paying members enjoy six types of benefits and loan privileges.
The President added that legal enforcement of the SSS Law will be strengthened through the issuance of Executive Orders to ensure social protection of workers.
Valdez thanked the President on his decision to grant the pension hike. He also acknowledged the assistance of economic managers and lawmakers who showed concern for SSS pensioners and members.
“This shows that the President truly cares for our elderly who have been waiting for the outcome of the proposed P2,000 increase,” he said.
“At the same time, his decision to implement the pension increase with a corresponding contribution hike and increasing the MSC limits supports the continuing reforms in SSS to consider the welfare of the greater population of over 30 million members, who look forward to their own SSS pensions at the time of their retirement,” he added.
Once implemented, the combination of additional contributions and increasing the MSC ceiling would put the SSS lifespan at 2040 as of 2017.
Valdez concurred with the Chief Executive’s pronouncement that the taxpayer’s money should not be used to fund the SSS pension hike. “He is being responsible when he said the government should not subsidize the pension hike because SSS is a private pension fund by nature and it is unfair for taxpayers to shoulder increases in SSS benefits.”
“We will make sure that compensation is performance-based. If all the targets we have set have been accomplished, then I think it is just fair to give incentives for good performance. This is, after all, is a practice in all government offices and private corporations,” said Valdez.
Solons laud Duterte
Assistant Majority Leaders Bernadette Herrera-Dy (Bagong Henerasyon) and Sherwin Tugna (Cibac), expressed gratitude to Duterte’s decision to increase the monthly pension of retirees.
The two solons pledged to back moves by the SSS to raise enough money to finance the increase.
“All we have to do now is to help the SSS raise the much-needed fund to implement the pension hike, “ said Herrera-Dy.
Tugna said the P1,000 increase represents the “middle-ground” in the controversy.  He had previously backed a P1,000 monthly increase when government financial managers declared that the P2,000 hike may be out reach.
Former Bayan Muna Rep. Neri Colmenares, one of the authors originally filed and approved in the 16th Congress only to be vetoed by former President Benigno “Noynoy” Aquino, joined lawmakers in praising Duterte for making good his campaign promise to approve a P2,000 increase in retirement pension.
“This means a lot to our senior citizens. It means that the work that everyone did since we filed the bill in 2011 has not been in vain,” said Colmenares.
However, the former party-list reprerentative said only half of the work has been done as the SSS will have to increase its collection and investment revenue to implement the pension hike.
Another author of the original bill, former Kabataan Rep. Terry Ridon, also expressed his gratitude to Duterte.
Ridon is now chair of the Presidential commission on Urban Poor (PCUP).
Ridon said that approving the pension hike was a social justice measure aimed squarely at providing immediate economic relief to millions of pensioners beset with mounting medical and monthly bills.
“More than an fulfilling an election promise, we believe the President has approved the pension hike because government wants to take care of our pensioners until the end of their days,” said Ridon.
Ridon said the President was swept to power on the strength of his support for the pension hike, and his clear concern for the day-to-day problems of our people.
“There is no clearer proof of his commitment to the public than this.”
Ridon also said that the approval proves to the nation that the Duterte government puts the ordinary Filipino at the center of government concerns.
Several lawmakers proposed that government should grant P500 monthly subsidy to SSS retirees and other senior citizens in the country, stressing that this represents a possible solution to the fund shortage that SSS has feared in case it implements a P2,000 pension hike.
Reps. Jericho Nograles (PBA), Rodel Batocabe (Ako Bicol) and Carlos Uybarreta (1Care) expressed their willingness to author a bill that would allocate P20 billion to fund a social subsidy program guaranteeing P500 monthly allowance for all senior citizens in the country.
The three lawmakers said the bill aims to unload the SSS of the heavy financial burden it faces over the popular legislative proposal that seeks to grant P2,000 hike in monthly pension for all retirees int he private sector.
Under the proposals of the three congressmen, government will shoulder P500 from the proposed pension increase, leaving the SSS only P1,500 to raise monthly for each pensioners.      

Charlie V. Manalo

1 comment

  • Mohammed

    Absolutely Dorina. Vigilance should be our watch word in the digital age. Imagine 24.5million online fraud last year alone, which is frightening. We should not be caught up at all. Many thanks for visiting our site.s All the best to you always.

    Mohammed Tuesday, 18 April 2017 14:59 Comment Link

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