Malacañang on Monday said President Rodrigo Duterte is working toward a “win-win” solution to lawmakers’ proposal to hike Social Security System (SSS) pensions by P2,000 a month, following opposition from his economic managers.
In a statement, Presidential Communications Secretary Martin Andanar said Duterte was yet to make up his mind on the issue.
“The President is looking for a win-win solution where he can give pensioners the increase they have been asking for while ensuring that SSS will remain solvent at all times,” Andanar said.
What is clear for now is that the President does not want taxpayers to subsidize the SSS, a position also held by his economic managers, he said.
“As the President said, he does not want to use taxpayers’ money, especially money of non-SSS members, should funding problem arise because of the increase. He will again confer and meet with his economic managers to solve the impasse,” he added.
A joint resolution on the P2,000 SSS pension hike is pending before the House of Representatives and the Senate.
If the increase is approved, the first tranche of P1,000 can be released by January 2017.
In a recent interview with ABS-CBN News, Duterte admitted that Budget Secretary Benjamin Diokno and Finance Secretary Carlos Dominguez 3rd were against the proposal because the SSS could go bankrupt.
“The end-game is that the government has guaranteed the solvency always of SSS so that if it runs short of money, government must go in. The problem is, you’ll also involve non-SSS members, because you’ll get the money from taxpayers,” Duterte said.
“The problem is that we promised the people, so we will just have to go somewhere in there,” he added.
Dominguez, Diokno, and Socioeconomic Planning Secretary Ernesto Pernia earlier said that without an “upward adjustment or restructuring of the contribution rate,” the unfunded liabilities of the SSS would increase from P3.5 trillion to P5.9 trillion if the proposed pension hike is approved.
They even claimed that the pension increase could “adversely affect the Republic’s credit rating.”
During the previous 16th Congress, a version of the proposed P2,000 SSS pension hike was passed but vetoed by then president Benigno Aquino 3rd, citing “dire financial consequences” for the SSS.
The SSS supported Aquino’s position, warning that a hike would shorten its fund’s actuarial life.
Senate Majority leader Vicente Sotto 3rd on Monday urged the economic managers of President Duterte to take a look at his “more acceptable” proposal on the planned SSS pension increase.
Sotto was referring to his Senate Bill (SB) 1068 which does away with the P2,000 across-the-board pension increase for all SSS pensioners. It seeks to adjust the minimum monthly pension to P2,000 from previous P1,200 for SSS members with at least 10 credited years of service, and maximum of P3,000 from the previous P2,400 for those with 20 credited years of service.
Sotto said the increases would be moderate as it was aimed at helping the lowest bracket of pensioners, but across-the-board increases could still be allowed in the future with enough SSS funds.
“Real pension increases are better than big future increases that cannot be funded,” Sotto told The Manila Times.
The Senate, before it went on a Christmas break, approved a resolution calling for an immediate increase of P1,000 in the monthly pension of all SSS pensioners.
Sen. Richard Gordon said the SSS must fulfill its promise because the reason the Senate agreed to a P1,000 initial pension increase was because senators were told the SSS won’t be able to afford the full amount of P2,000.
“They (SSS) must live up to the end of the bargain. They promised the P1,000. We amended the P2,000 to P1,000 because they said they can’t give the P2,000,” Gordon said in a phone interview.
He said the SSS board must also show its efficiency in collecting dues and maximizing assets to increase the pension fund’s actuarial life.
Gordon said the SSS, with its new board, should be more aggressive, such as by investing in public-private partnerships which are guaranteed by the government, instead of Treasury bills, which have a low yield.
“But I think we’re all looking at our previous experience with the SSS, which is abysmal. They have billions in non-performing assets, they have very well-paid executives but they’ve not done their job. Now they have a new board, I thought they will be aggressive,” said Gordon.
The senator said that if the President needs more time to study, “let us give him the study time he needs,” he added.