The Social Security System (SSS) has trimmed P1 billion from its programmed expenses for 2017 as part of measures to improve financial performance.
From the original proposal of P13.22 billion, the Social Security Commission (SSC) board approved an allocation of P12.21 billion for operating expenses, which is 54 percent of the Charter’s limit or 5.7 percent of total revenue, the state-run pension fund for private sector workers said in a statement on Tuesday.
“SSS has seen improvement in its profitability as a result of cost-efficiency measures that greatly reduced expenditures from 2010 to 2016. With the P1-billion budget cut, we can maintain SSS expenses at levels that will help shore up the agency’s profits for 2017,” SSC Chairman Dean Amado Valdez said.
The pension fund is strictly adhering to its duties, particularly the prudent allocation of SSS funds for expenditures, SSS President and CEO Emmanuel Dooc, meanwhile, said.
“With close supervision by the SSC and Governance Commission for GOCCs, the pension fund is kept afloat amid the low-growth environment of the market through management activities that conscientiously comply with the discharge of our fiduciary responsibilities,” Dooc noted.
At an average ratio of 59 percent over the past seven years or 5.9 percent of total revenue, the cost of operations has remained below the Charter limits, he said.
Despite an annual average increase of 8 percent in volume of transactions, the SSS has run the cost of operations with a moderate increase of 6 percent a year in terms of opex. Taking out inflation, the rate of increase is effectively at 3 percent, according to the fund.
“This continued prudence was achieved amid branch expansion activities and system-wide upgrades that paved the way for growth in membership and collections across the region,” Dooc noted.
The pension fund intends to determine how low operating expenses could get without compromising its operation.
The latest data showed the SSS posted P10 billion in total expenses last year, comprising salaries, wages and bonuses of employees, as well as cost of maintenance, rent and other operating expenses.