Outgoing president Benigno “PNoy” Aquino III vetoed on the PhP 2,000 Social Security System (SSS) pension hike for senior citizens and their dependents. This has transpired many negative criticisms where some even say that the president has no compassion for the poor. However, the government released information telling the reasons why PNoy vetoed on the said claim.
According to gov.ph, the PhP 2,000 SSS pension hike will require an approximate of PhP 56 billion fund annually. They emphasized that this is expected to grow with the increase of pensioners annually.
The main reason for the veto is that SSS will not have enough fund to support this, presenting a computation that SSS may need to file for bankruptcy after 11 years.
SSS earns from the annual contribution of its members and from its investments. For every PhP 1 of contribution, it returns PhP 6 to PhP 15 to the member upon retirement.
The post further details that in order to prevent the bankruptcy of SSS, the following should be done:
- Implement a 4.8% increase in member’s contribution, which will lead to about 44% increase to all active SSS members
- Reduce government fund on other programs and projects or transfer taxes to SSS
- Sell SSS assets
The government emphasized, “Nakatutok tayo hindi sa pagpapapogi, kundi sa kinabukasan ng pamilyang Pilipino.” (Rough translation: We’re focused not on making ourselves look good but on the future of Filipino families.)
At present, there are over 2.15 million pensioners. The government said that if they increase the benefits today, the 33 million active members of SSS might not benefit from SSS in future.
Do you agree with this? Or are there other means that SSS can grow its fund to support the pension hike? Share your thoughts with us.
The govt’s computation claiming that it returns P6 tp P15 for every P1 contribution is downright wrong. It is not as if members’ premiums are totalled and then multiplied by 5 to 15 then the product is given to pensioners. SSS is also making money by raking in the premiums of people who die prior to retirement age; in which case the SSS pays only the burial fee and a measly sum for surviving dependents of the deceased until they themselves reach legal age or die. Life expectancy rate in the Philippines is 63; and all should remember that when doing the math. This is not to say that the proposed P2,000 pension hike is correct, but the president should not have outrightly vetoed the bill. He should have given at least something to pensioners to cover inflation costs.
Makes sense. We should not be myopic about things like this and always look at their long-term effects.