ONE bit of good news is that President Duterte is listening to his economic managers. Particularly in the case of the raise in SSS pensions. He is trying to find a sensible and effective way that the pensions can be raised without ruining the Social Security System for its future pensioners.
While it is quite true that the pensions need to be raised, they cannot be raised without providing for the future of the Social Security System and its future pensioners. This only means that funding must be provided for the Social Security System to absorb the added expense and continue its mission of providing the right pensions for its contributors in the long term.
Thus, the legislature did a shortcut insisting on raising pensions without providing the necessary safety net to keep the Social Security System viable. Another case of populist promises that have no underlying support to prevent them from collapsing at the end. Indeed, finally coming to a broken promise in the long term.
Admittedly, the Social Security System has not been all that efficient in collecting dues from employers in the past. Even if they suddenly were able to collect more or all that is due and they should, it could not endure the financial outlay that an across-the-board P2,000 increase would cause.
The point is that there is no free lunch. It has to be paid. Thus, it seems the only option is to raise the dues that contributors pay now to about 17 percent. This will cause a howl of populist outrage but it is the one way to pay the cost and the only way that the Social Security System can reach the future with intact service. Perhaps the win-win solution that the President is looking for lies in reducing the percentage for low salaries and raising it for higher salaries. Moreover, there is a tax reform bill being proposed that will lower income taxes for those with lower salaries. At least Social Security System members have regular jobs and monthly salaries which means they are better off than many of their countrymen. They also use public services and have social security benefits. Their contributions will be commensurate with their pensions and the services rendered in the long run. But if shortcuts are taken, there will be no long run.
Let us hope that the government’s communications office explains the above in simple terms to the general public and in particular to Social Security System members and pensioners. Nothing can be free without paying in some way—taxes, contributions, VAT, etc.—for a society to be viable and render the basic services, including pensions. A government that stands by this principle is a responsible and trustworthy one which will not gloss over what is necessary.
Maybe it is time for the government to stop the populist promises of free this and free that. It is hoped that the raises in salaries of soldiers and police and eventually teachers and government personnel are funded from sources that can manage them and not cause a budgetary deficit that will be the ruin of government operations and the general economy. I am sure the economic managers can manage the problem and let us hope the President and the Executive Department as well as the Legislature, which is crucial and needs to cooperate, will listen.
There are cautionary tales from all over the world on populist measures without safety nets, citizen discipline and demagogic directions. Please note present-day Venezuela.