Budget Secretary Benjamin Diokno provides updates on the 2017 budget during a press briefing in Malacanan on Tuesday, Jan. 3, 2017. (Toto Lozano/Presidential Photo)
DAVAO CITY, Philippines —- Budget Secretary Benjamin Diokno said the problem on deciding to raise the Social Security System pension of retirees should not be passed on to President Rodrigo Duterte.
“To me it’s unfair to give the problem to him. In fact, it’s unfair for Congress to pass that law which as you know (former Pres. Benigno Aquino III) vetoed. It should not have reached the president’s desk,” Diokno told reporters in a press briefing in Malacañang on Tuesday, Jan. 3.
Then President Aquino vetoed the P2,000 pension hike last year, saying the stability of the entire SSS benefit system “will be seriously compromised” in favor of some 2 million pensioners and their families.
In his veto message, Aquino said: “the P2,000 across-the-board pension increase with a corresponding adjustment of the minimum monthly pension will result in substantial negative income for the SSS. More specifically, the proposed pension increase of P2,000 per retiree, multiplied by the present number of more than two million pensioners, will result in a total payout of P56 billion annually.”
“Compared against annual investment income of P30 billion to P40 billion, such total payment for pensioners will yield a deficit of P16 billion – P26 billion annually,” he said.
Diokno said even during his time, former President Ferdinand Marcos did not touch the private pension fund.
“You contribute to that fund and when you retire you get benefits from that fund,” Diokno said.
On December last year, the House and the Senate approved a Joint Resolution for the release of the first tranche of the P1,000 pension increase. The SSS proposed that the second tranche be given at the latest on December 2019.
“But you know when you pass the buck, give it to the president, that to me is unfair for the president,” Diokno said.
He said Pres. Duterte could give back the resolution to the SSS Board of Trustees and ask them to come up with a solution.
“He can give it back and say look I appointed you there to solve the problem, come up with a solution. If I were the president I would do that. I appointed you there to come up with a solution, you manage a private fund,” he added.
‘SSS amenable to increase’
However, Bayan Muna Rep. Carlos Zarate in a telephone interview said
Social Security System Chairman Amado Valdez made representation in Congress and had several conferences with the lawmakers from the House of Congress and Senate before the Joint Resolution was signed.
He said the new leadership of the SSS expressed openness in increasing the pension unlike the previous administration.
In a telephone interview, Zarate said Valdez even “admitted the mistake of the previous administration.”
What they proposed was to give the P2,000 increase in two tranches, the first tranche will be given by December 2016.
“Meaning they made a study, there was a computation compared to the previous administration where it was an outright no,” he said.
Source of funds
Zarate said the SSS also proposed that the most that they can give is P500.
The option was to provide a P500 increase for all pensioners in four consecutive years, starting 2017 until the whole P2,000 increase is provided by 2020.
Zarate said they also opposed the proposal to raise the collection of additional premiums, adding that the SSS only has 40 percent collection efficiency.
“For every peso that they need to collect either charges, surcharges or penalties, or premiums from delinquent employers, they can only collect P0.40. Based on their own data that accumulates to P325 billion,” Zarate said.
Zarate said they urged the SSS to implement efficient collection of revenues first.
“Even only half of that P325 billion is big enough to cover the funds necessary for the pension,” he said.
Zarate also said they proposed that SSS disposed their non-performing assets.
He said they hope the SSS leadership will not fall into the “same trap.”
“Walay ma-bankrupt na pension fund. The government guarantees the fund,” he said.
Zarate added that sound fiscal management will enable the SSS to stretch the fund.
He also urged President Duterte to look at the issue as a need of the pensioners and not as a campaign promise.(davaotoday.com)
