PRESIDENT Benigno Aquino 3rd has vetoed a measure that would have granted two million pensioners of the Social Security System a P2,000 across-the-board increase.
In his veto message contained in a letter dated January 12, 2016 and addressed to Senate President Franklin Drilon and Speaker Feliciano Belmonte Jr., the president said he was returning the enrolled House Bill 5842 “without my signature” citing the measure’s “dire financial consequences” that may compromise the entire benefits system.
“While we recognize the objective of the bill to promote the well-being of the country’s private sector retirees, we cannot support the bill in its present form,” Aquino said.
The bill was transmitted for the president’s signature on December 15, 2015 with the hope that it would have been a Yuletide gift for the pensioners and their dependents.
“A P2,000 across-the-board pension increase with a corresponding adjustment of the minimum monthly pension will result in substantial negative income for the Social Security System. More specifically, the proposed pension increase of P2,000 per retiree, multiplied by the present number of more than two (2) million pensioners, will result in a total payout of P56.0 billion annually,” Aquino explained in his letter.
“Compared against annual investment income of P30 billion – P40 billion, such total payment for pensioners will yield a deficit of P16 billion – P26 billion annually,” he stressed.
Aquino warned that once passed, the measure will bleed the resources of the SSS, which “will be constrained to draw from and use its Investment Reserve Fund (IRF) to support the pension increase.”
“Consequently, the IRF will diminish over the years, eventually reaching zero by the year 2029,” the President emphasized.