Makabayan: Charter prohibits funding SSS pension hike from premium

By: Marc Jayson Cayabyab - Reporter / @MJcayabyabINQ

INQUIRER.net / 04:15 PM January 11, 2017
The Makabayan bloc in Congress warned against the possible legal issues on the approval by President
Rodrigo Duterte of the P1,000 pension hike for the members of the Social Security System (SSS).
In a press conference on Wednesday, Bayan Muna Rep. Carlos Zarate expressed gratitude to the president
for approving the pension hike, but warned against the legalities of the move to fund the hike by increasing the
contribution as well.
Malacaang on Tuesday announced the approval of the P1,000 increase in the state pension fund starting
this month, but there will also be a corresponding 1.5-percent contribution rate hike in May 2017 and an increase in
monthly salary credit to P20,000 based from P16,000.
This would put the contribution rate from the current 11 percent to 12.5 percent, which could go up to 17
percent over the next six years.
Zarate said this legal issue will have to be addressed by reading the fine print of the approved pension hike.
Gusto natin makita ang fine print ng resolution na nilagdaan ng SSS Board. Malinaw naman talaga sa
charter ng SSS, nakasaad dun.. na pag mayroong pagtaas ng pension, dapat hindi kukunin sa pagtaas ng premium,
Zarate said.
(We want to see the fine print of the resolution signed by the SSS Board. Its clear in the SSS charter that in
cases of increase in pension, this should not be funded from increase in premium.)
According to Section 4 of the Social Security Act, any increase in benefits shall not require any increase in
the rate of contribution.
Zarate warned against the pending contribution hike in May to finance the pension hike, saying that the SSS
should focus instead on instituting reforms, such as improving the collection of revenue and expanding its
membership base.
Zarate said the prohibition in the charter on funding the pension hike from the increase in contribution would
pose a legal problem that could go all the way to the Supreme Court.
Thats a legal question kaya gusto natin makita ang fine print. Malinaw na nakasaad sa batas na hindi
pwedeng ganun ang proseso, Zarate said.
(Thats a legal question thats why we want to see the fine print. Its clear in the law that that process is not
allowed.)
Zarate said the grant of the pension hike is the result of the collective struggle of the people. He warned that
it is not the time to increase the contribution
Hindi tayo natutuwa na kailangang magdagdag ng kontribusyon.. Kami sa Makabayan, naniniwala na hindi
panahon ng dagdag kontribusyon ngayon, Zarate said.
(We are not pleased with the need to increase the contribution. We in the Makabayan bloc believe that it is
not the time to increase the contribution.)
SSS chair Amado Valdez had said the second P1,000 increase would take effect in 2022 or even as early as
2019 subject to conditionalities.
Dutertes economic managers earlier opposed the hike as it would cut the actuarial life of the pension fund
by 14 to 17 years.
But Malacaang said with the P1,000 increase, the fund life will continue until 2040 by May 2017 or by the
time the contribution rate and increase in monthly salary credit shall have been implemented.
Duterte made it his campaign promise to push for a pension hike for retirees and senior citizens.
During the 16th Congress or before the end of his term, former president Benigno Aquino III vetoed the
approved bill increasing the pension by P2,000 because the proposal would bankrupt the state pension fund.
Aquino then said the P2,000 across-the-board pension hike for all 2.1 million pensioners would cost
the SSS some P56 billion even though it only earns an annual investment income of P30 billion.
The proposed law would have increased the monthly pension by P2,000 across-the-boardto P3,200 from
P1,200 for those with 10 credited years of service, and to P4,000 from P2,400 for those with 20 years. CDG
Read
more: http://newsinfo.inquirer.net/861455/makabayan-charter-prohibits-funding-sss-pension-hike-frompremium#ixzz4WHhlLfF2
Why We Need Social Security
It has radically reduced poverty in old age. And it protects the middle class against ination and the ups and downs of
the market.
By Paul Starr
For nearly three-quarters of a century, Americans have taken Social Security for granted. Now we had better
learn how it works, what it has done, and what the true facts are regarding its future -- or else we are going to lose it.
Supercially, Social Security resembles traditional employer pensions: Americans pay into the system during
their working years and receive a monthly pension during retirement. But the differences are fundamental. Social
Security benets are based on a balancing of two principles: equity and adequacy. Equity means that what you put in
is related to what you get out; in other words, workers with higher wages, who pay more into the system, receive

higher benets later on. But under the principle of adequacy, the Social Security benet formula overlooks years of
low earnings (for example, when a worker may have been disabled or unemployed), and it replaces a higher
proportion of earnings for the poor than for the rich. Thats why its our most successful anti-poverty program. In
addition, Social Security benets are indexed against ination and protected from the ups and downs of the economy
and nancial markets. Thats why the program provides security for the middle class.
Privatization would do away with the idea of guaranteeing a minimally adequate income for the elderly who
have worked all their lives. From their own earnings, low-wage workers would be unlikely to generate enough funds in
an individual account to maintain a decent standard of living in retirement. Even middle-class workers would be at
greater risk of poverty in old age. Its intrinsic to nancial markets that they yield unequal returns; many of those
who did badly with their individual accounts wouldnt have enough from other sources to live on. And markets
uctuate: Some generations would retire during one of the long downturns that periodically hit the markets, when their
investments would be convertible only into paltry annuities. Those who lived into their 80s or 90s would be especially
likely to outlast their individual accounts, or, if they had bought annuities at retirement, see those annuities severely
eroded by ination.
The elderly used to be an age group with an especially high rate of poverty. One of the signal achievements
of Social Security, hardly noticed today, is that poverty has fallen dramatically among Americans over age 65 to just
10 percent, lower than the 12-percent rate for the population as a whole. For millions of the elderly who would
otherwise be poor, Social Security is the single biggest source of income, the nancial bedrock of their lives.
Indirectly, their working-age children are beneciaries of the program because the elderly no longer have to move in
with them. People under age 65 also benet from two other elements of Social Security that often get forgotten:
benets during long-term disability and survivor benets for dependents if a worker dies before retirement. These are
also important anti-poverty programs that dont carry the stigma of welfare.
Social Security was never expected to be the sole source of retirement income for the middle class, who
ideally also have employment-based retirement plans and personal savings. But if one thinks of these various
sources of income as making up a portfolio of retirement assets, Social Securitys distinct value is even clearer.
While other assets typically erode or become exhausted with advanced age, Social Security pensions keep their
value because they have an annual cost-of-living adjustment. Moreover, as many employers convert from pension
plans with a dened benet to 401(k) and other plans with uncertain payouts, workers are already bearing more risk
for retirement. In that context, Social Security provides a valuable hedge against the nancial markets.
But whats wrong with voluntary and partial privatization -- giving people the option of holding back 3
percent or 4 percent of their Social Security contributions to deposit in individual accounts? Although we havent yet
seen the details of the Bush plan, these proposals typically come with sharp reductions in future benets for younger
workers who opt to remain in the system. These are really proposals to cut Social Security in which the individualaccount option is an eye-catching decoy. Voluntary in appearance, these proposals would make Social Security such
a bad deal that theyd trigger a run on the system: Workers, especially those with higher earnings, would likely not
only opt for private accounts but demand that the entire program become optional.
Social Security works because it is a compact that extends across income groups. If the afuent leave the
system, it would become a welfare program, shorn of the political clout that comes from universal participation. The
result would be a self-reinforcing cycle of decline.
Social Security also works because it has been a rolling compact across generations. For decades, the
basis of the program was entirely pay-as-you-go -- the taxes paid by workers went to pay for current retirees. When
those workers retired, they depended on the next generation to support Social Security. Then, in 1983, Congress
raised payroll taxes above the level needed for immediate benets in order to accumulate savings for the baby-boom
generations retirement.
These funds have been invested in Treasury bonds -- that is, the federal government itself has borrowed
from the trust funds. Though opponents of the program question this practice, its no different from individuals
investing in Treasury bonds. Ever since the founding of the republic, the federal government has paid off its debts; it
must fulll these obligations to the elderly no less than its debts to bondholders in Japan. But what this highlights is
that future Social Security beneciaries, like previous ones, ultimately depend on the next generation of workers to
pay taxes and keep the system going for themselves and their children.
Republicans opposed Social Security when it was introduced, Barry Goldwater suggested making it
voluntary in 1964, and ever since the 1980s, conservative think tanks have sponsored proposals to shift from Social
Security to individual retirement accounts. The opponents biggest resource in this effort has been public skepticism
about government. When a 1981 opinion survey asked how much money out of $100 in Social Security taxes went to
administration, the median answer was $52, though the real gure that year was $1.30. Today, Social Security
continues to deliver benets with overhead at a fraction of what private accounts would cost, but few people
understand that in this case the government enjoys a huge edge in efciency.
President Bush and others have also sought to fan distrust in Social Security by contrasting a grim picture of
the systems future solvency with bright prospects for individual investment accounts. Their game here involves
using two sets of assumptions: The Social Security projections invoked by Republicans assume a 1.7-percent future
growth rate for the economy; the investment returns look back to a 7-percent historical growth rate for the stock

market. But if the economy grows at 1.7 percent, the stock market cant grow at 7 percent. And if economy grows
as smartly as is being assumed for private accounts, there will be no crisis in Social Security.
The ultimate consideration is this: Social Security protects people against a variety of risks to ensure them a
basic oor of income in old age and to enable many people who have struggled all their lives to look forward to a
decent standard of comfort and dignity when they retire. It would be a crime to take that away from them.
Paul Starr is co-editor of The American Prospect.
Copyright 2005 by The American Prospect, Inc. Preferred Citation: Paul Starr, "Why We Need Social Security",
The American Prospect, February, 2005.
https://www.princeton.edu/~starr/articles/articles05/Starr-SocSec-2-05.htm
Voters reject PNoy veto of SSS bill
posted February 14, 2016 at 12:01 am by Joyce Pangco Panares
Majority of Filipinos want the government to increase the monthly pension of senior citizens despite claims
from the government that the move could leave the Social Security System bankrupt, the recent The Standard Poll
showed.
At least 58 percent of voters backed the measure passed by Congress seeking a P2,000 increase in SSS
pension, which was eventually vetoed by President Benigno Aquino III.
Opposition to Aquinos veto was highest in the National Capital Region, where 68 percent of the survey
respondents said the pension increase should have pushed through. Only 21 percent of Metro Manila-based voters
said they disagree with the pension hike for a net agreement of +35.
Across other geographic areas, the same sentiment was posted by majority of respondents in North/Central
Luzon (61 percent), South Luzon/Bicol (55 percent), Visayas (61 percent), and Mindanao (52 percent).
Majority of respondents from both urban (62 percent) and rural (56 percent) areas were also against the veto
of the SSS pension increase measure, which members of the House of Representatives deliberately did not override
before going on recess last week.
The survey, conducted by resident pollster Junie Laylo from Jan. 27 to Feb. 4 had 3,000 respondentsall of
whom are registered voters with biometrics and who said they are sure to vote in next years electionsfrom 79
provinces across the country and the 17 cities in the NCR. It has a margin of error of +/- 1.8 percent nationwide.
Aquino earlier defended his decision to veto the measure that would have benefited 2.1 million senior pensioners,
saying the government must exercise prudence.
So we implement a proposal that benefits only one group, and just say sorry to all the others? And after
that, what do we say: come what may or lets leave it up to Batman? Thats not right, he said.
The Presidents veto irked several labor groups, who accused him of being heartless and callous.
Vetoing the P2,000 increase in SSS pension shows how inconsiderate and heartless the administration is,
said Julius Cainglet, assistant vice president of the Federation of Free Workers. They bark about the Philippines
unprecedented growth and yet, they cannot put their money where their mouth is.
The militant Bagong Alyansang Makabayan said Aquino has no compassion for the retirees from the private
sector.
Some officials had salaries and bonuses that amounted to P4 to P5 million each for that year. Such is the
irony of daang matuwid. The public must express its unequivocal rejection of this regime, through mass protests and
through the ballot in May, said Bayan secretary-general Renato Reyes.
http://thestandard.com.ph/news/-main-stories/top-stories/199277/voters-reject-pnoy-veto-of-sss-bill.html
THE SSS IN THE PHILIPPINES
Posted by The Society of Honor on January 26, 2016 215 Comments
By Bill in Oz
________________________
I want to start with a couple of definitions. Knowing what we are talking about is very important.
The SSS (Social Security System) in the Philippines is not a welfare program. It is an insurance system. And like
every other type of insurance program, the beneficiarys contributions to the insurance policy determine the benefits.
If a beneficiary pays a lot in contributions s/he will get a lot. If s/he has contributed very little, then s/he will get very
little. If s/he contributed less than the minimum number of contributions s/he will get bugger all. Stating that another
way: those who have given, shall receive; those who have not given, get zip.
This is very different to a national welfare based social security program which pays all citizens (and
permanent residents) on the basis of their need, not on the basis of what they have contributed. For example, the
Australian Social Security system is a welfare based system. All money paid comes from taxes and none from
contributions by members. Any Australian citizen, if unemployed, can seek to be paid unemployment benefits. (This
is commonly called the dole. Persons who attempt to avoid getting a job and live on the dole are colloquially called
Dole bludgers. It is no complement!) The application will be assessed on the basis of need. Similarly, a person
retiring at 65 can apply for a retirement pension. And the application will be assessed on the basis of need. However
if s/he is stinking rich s/he will get nothing. If middling s/he will get middling. And if s/he is in desperate need s/he will

get the maximum available. The same process applies for sickness, maternity benefits or unemployment benefits or
disability benefits.
In Australia there is also a government regulated joint employee/employer contributory retirement program.
We call it Superannuation or Super. However, all the funds are managed by private corporations. And all
employees have (by law) the right to nominate the superannuation fund of their own choice. Superannuation fund
companies thus compete with each other for membership by employees. Some superannuation funds are industry
funds established by trade unions with trade union members on the boards. Finally, Superannuation funds are a
huge source of investment money in Australia.
In recent years, the Aquino governmental has started to create a Philippine welfare program. This is the
Pantawid Pamilyang Pilipino Program (also known as the Conditional Cash Transfer program). This attempts to
offer some minimal care of the very old and very poor by providing 500 pesos a month to the indigent elderly and
unmarried mothers. As well as the 500 pesos, these individuals have automatic PhilHealth coverage. However the
Pantawid Pamilyang Pilipino Program is a program instituted by the current President under his executive powers. It
is not part of the regular Phillipines budget. Thus the next President could just decide to end this welfare program.
I mention all these things so all involved in the discussion are able to compare and contrast the various ways
that an insurance based system and a welfare based system differ. The comparison helps with evaluations. It also
helps avoid confusion.
******
The SSS was first proposed by President Roxas in 1947. But he died before he could initiate any legislation.
President Quirino then introduced legislation in the early 1950s. It came into effect in 1958. My guess is that it was
modeled on the USA insurance based social security system of the time.
Who is Covered
The SSS insurance system in the Philippines is not universal for the Philippine workforce. It does not cover
government employees and military personnel. They have their own separate systems.
SSS only effectively covers permanent private-sector employees and their families. A permanent worker is defined
as a worker who has worked continuously in a company for more than 6 months. For such employees, coverage is
compulsory by law. Also, in order to gain access to the retirement benefits offered by SSS, a member has to have
made monthly contributions for at least 120 months.
There are a large number of workers who are not covered. Almost all casuals, temporary workers and subcontractors are not members as the law is not enforced for such workers. So almost none are. Peasant farmers and
their families are not covered. The multitude of small informal family based businesses like sari sari stores are also
not covered. As a result, only a small percentage of Filipino workers are covered by the SSS at any one time. One
estimate puts the coverage at just 15% of the workforce.
Another problem is that there also are a large number of members who are no longer active members and
who no longer make any contributions. Women who have left the workforce because of being mothers form a high
percentage of these not active members. Others former members have left the Philippines to get work in other
countries such as Hong Kong, South Korea, Singapore, Malaysia, the UK, the USA, and Middle Eastern countries.
Mary Grace commented that there are more than thirty million SSS Members. Two million have retired.
Eighteen million are not actively paying members. Only 12 million are active paying members.
What is covered?
The SSS offers members the following benefits: retirement pensions; sickness benefits; maternity benefits,
disability benefits and work injury benefits. It does not offer any benefits if a member becomes unemployed. If person
is injured, disabled or gets pregnant while unemployed, they are also not covered. An aged person retiring who was a
member before becoming unemployed can claim a retirement pension. However, the amount will depend on the
value of contributions made while employed. And there is no indexation of payments to retired persons to negate the
impact of inflation.
How is the SSS funded?
The SSS is not funded by taxes or by the Philippines government even though it is a government statutory
authority regulated by law passed by the House and Senate. By law, the SSS is funded by contributions from
employers and employees.
Each month, 3.3% of employees gross monthly earnings is supposed to be deducted by employers and
then forwarded to the SSS. But there is a cap at 15,000 pesos earned per month. So the maximum compulsory
contribution per person is 499.50 pesos. Employers also contribute an amount equal to 7.07% of an employees
gross monthly earnings.
Impact of Inflation?
I remember staying in a 2 star hotel for a night in Baguio in 1974. It cost 20 pesos. I stayed in a similar type
of hotel last December. The cost per night was 1,350 pesos. The inflation rate is now quite low in the Philippines and
the BSPs monetary policy is now to ensure a low and stable inflation rate conducive with balanced & sustainable
economic growth. But there was significant high inflation over the past 40 years. For example, inflation hit 62.80 % in
1984 when Marcos was in control as the dictator. Poor economic policies during his dictatorship created economic
chaos and high inflation.

Many of the 2,000,000 SSS retired pensioners started their working lives about 40 years ago. Wages &
salaries and the cost of living were so much, much much lower then. And these people paid contributions to the SS in
those times set according to the then current wage & salary levels. I wonder how many of them only paid the required
120 monthly payments in the expectation that this would guarantee their livelihood when retired ?
There has been some minor adjustment upwards by SSS for retired pensioners. Mary Grace mentions a
relative whos monthly pension went up from 1,200 pesos to 1,500 pesos. But SSS has not indexed the contributions
made by members to account for the hyper Marcos-created inflation rate of the 1980s, or the high inflation of the
1990s, or the period 2007-9. This means that older members have been treated unfairly compared to members who
joined in more recent times when inflation was much lower.
More importantly, this inflation was caused by the Filipino government of the time. Grossly irresponsible
actions & policies by the Marcos dictatorship caused the high inflation of 1983-5. There is thus a strong equity
argument that older SSS members should be compensated by the Philippine government for the impact that high
inflation has had on the value of the SSS Insurance scheme policy. I wonder if the Philippine government has ever
acknowledged this culpability.
A study done of SSS in 2009 discussed this issue briefly:
There is also a need to further improve the protection provided to pensioners. At present, pensions are adjusted in
an ad hoc manner over time. The value of pensions may be better protected from erosion due to inflation if pensions
are adjusted in a systematic manner through inflation indexation. (Pp16, Reforming Social Protection Policy:
Responding to the Global Financial Crisis and Beyond)
However nothing has changed since that paper was published.
Consequences
There are some serious consequences for Philippine society from the way this worker Insurance system is
structured:
1. There is no unemployment benefit for anyone in the workforce, whether permanent, casual,
temporary or contract. This is a major defect.
2. Casuals, temporary workers and sub contractors have no coverage at all under the Philippines
SSS. If casual employees are injured or disabled at work, they are not covered. Women who get
pregnant are not covered. And there is no welfare system to provide for such people. The only
option available is to rely on help from family. This is a major defect.
3. When casuals, temporary workers, or trainees get old, there is no real pension available for them.
They may get a little from Aquinos Pantawid Pamilyang Pilipino Program (CCT). They, again, have
to rely on help for everything from family. This is a major defect.
4. When peasant farmers and their families are injured or become disabled there is no coverage apart
from what is granted under Aquinos Pantawid Pamilyang Pilipino Program (CCT).
5. Because there is a significant extra employment cost for employers with permanent employees,
there is a big incentive for employers to avoid hiring permanent employees. Instead there is an
incentive to hire endos (casuals), temporaries or trainees for 5 months and then let them go with
the more skilled or valued ones being rehired after a break. This causes churn in the workforce,
with constant anxiety. I suggest it also causes loss of job skills. In recent years, permanent
employees as a percentage of the workforce has been falling.
6. The Cap on contributions to SSS at 15,000 pesos has perverse consequences. Hypothetically, it
helps permanent workers now by limiting what they are compelled to pay. But is this reality? I
suggest it is not. The cap prevents individual workers from providing for their own futures by
making extra SSS payments. (This is a feature of Superannuation in Australia where such extra
contributions can also be tax deductible). More importantly, the cap functions as a get out of jail
card for employers. They do not have to pay the 7.7% to SSS for permanent employees above the
15,000 peso cap. This reduces labor costs for employers and saves them money.
7. In these situations, the threat of poverty is all pervading. Anyone with a permanent job is reluctant
to leave it unless a better position is being offered. This is true even if the job entails long, unpaid
extra hours, or if the employer is abusive. The same is true for workers in casual positions. As
Giancarlo commented recently, I suspect that most lower income working families are really living
hand to mouth and not that interested in the long term. The NOW pervades everything.
******
The origin of this blog post was the decision by President Aquino on the 14th of January, 2016, to veto a
Congressional bill ordering the SSS to pay the lowest pensioners an additional 2,000 pesos a month. This decision
generated a lot of comments and also a lot of information. Aquinos reason for his veto was that Congress had not
passed the complementary bill authorizing the SSS to increase the contributions made by active members and
employers. Such a bill was passed in the House of Representatives. But was not passed in the senate. He said that,
without such supporting legislation, the SSS would in the long term be forced into bankruptcy.
Many commentators (including myself) suggested that the Senate was being irresponsible in blocking the
supporting legislation. I still think this.

However, I also now see that the current impoverished condition of SSS pensioners living on 1,200 or 1,500
pesos a month is not just because of the SSS. It is also a consequence of the catastrophic loss in value of
contributions made before and during the period of hyper inflation during the Marcos regime in the 1980s and also, to
a lessor extent, the high inflation during the 1990s and during Gloria Arroyos presidency from 2007 to 2009.
Government actions and policies caused this loss in value of members compulsory contributions. Maybe the
government should now recognize this and make amends by allocating funds to compensate for the loss in value.
https://joeam.com/2016/01/26/the-sss-in-the-philippines/
SSS premium hike opposed, called illegal
January 12, 2017
BY JP LOPEZ AND WENDELL VIGILIA
LAWMAKERS and labor groups yesterday opposed the increase in monthly contributions of Social Security
System (SSS) members to finance the pension hike of retirees, with senators saying that the move is contrary to law.
President Duterte approved a P1,000 pension hike for SSS members beginning next month but there will be
a 1.5 percent increase in the contribution of members starting May.
Social Security System President Amado Valdez said the 1.5 percent increase in the contribution of
members would go to the investment reserve fund of the agency and would not be used to fund the pension hike.
Valdez said it is the proceeds of the investment fund that is used to finance the pensions.
All this increase in the contribution is for the investment reserve para mapalaki natin doon because, actually
nanggagaling iyung pension at saka other benefit from the proceeds of our investment in the current collection, he
said.
He, however, admitted that indirectly the increased contribution would eventually go to the pension hike
since it will augment the investment fund.
Senate President pro tempore Franklin Drilon said the SSS Law prohibits SSS from raising benefits that
would require an increase in contribution.
While the executives decision to finally grant the long-awaited increase in the pension of SSS retirees is
commendable, it should not be used to justify an increase in the premium payment, Drilon said.
He said the SSS can only implement an increase in the benefits of its members, subject to the approval of
the President, if such increase is based on the actuarial soundness of the reserve fund and as such shall not
require any increase in the rate contribution.
Drilon said while the adjustment in the rate of contribution will take effect by May 2017, it is clear that such
action is carried out in order to fund the pension increase.
Sen. Paolo Benigno Aquino IV said senators and employers were surprised by Malacaangs move. He said
he supported the move to raise the SSS pensions.
Aquino said what is needed is to increase the efficiency in the collection of contributions, instead of raising
the premiums.
Sen. Francis Escudero said the SSS should explain the increase in premium and back it up with actuarial
studies.
But Sens. Juan Edgardo Angara and Joel Villanueva said the increase is SSS premium is justifiable.
Angara, chairman of the Senate ways and means committee, said the agencys funds would be depleted if
the increase in SSS pension has no accompanying measure to recover the expected cash outlay.
Villanueva claimed Angaras position is actually the sentiment of the Senate.
Someone has to pay for the additional benefits. We are happy that our retirees will receive the additional
pension and hopefully, the SSS management will be able to effectively manage the fund and improve their collection
and that the increase in premium will be sufficient to make the fund sustainable, he said.
Sen. Richard Gordon, chairman of the committee on government corporations, hailed the decision to
increase the SSS pension and vowed to provide legislative support to ensure the stability of the fund agency.
Left-leaning congressmen from the Makabayan bloc led by Bayan Muna party-list Rep. Carlos Zarate said
the Presidents decision to approve the P1,000 pension hike for SSS pensioners cannot be undertaken at the
expense of contributors.
Pwede nilang (Palace) sabihin na hindi magkasabay (ang increases). January (ang) increase (sa pension),
May (naman) yung contribution hike, he said. That is certainly a legal question kaya nais nating makita yung fine
print ng (SSS) board resolution, Zarate said.
He said Bayan Muna will continue to help the SSS board in finding ways to lengthen its fund life without
increasing SSS contributions.
Zarate said the issue may lead to a legal question before the Supreme Court and that is why we will have to
thoroughly study because the law clearly states that is not the process.
Ako Bicol party-list Rep. Alfredo Garbin, a member of the House minority bloc, said: The challenge now is
for the SSS to have an efficient and effective collection of its members contributions instead of raising its premium
which a big burden on the part of its members and employers.
Magdalo party-list Rep. Gary Alejan said Duterte is delivering a campaign promise at the expense of other
people.

Anakpawis party-list Rep. Ariel Casilao urged members to oppose the increase in their contributions and
instead demand significant reforms in the institution such as improving its collection rate and coverage, getting rid of
huge salaries and bonuses of executives and risky investments to the private sector.
Partido Manggagawa chairman Renato Magtubo said there are other ways for the SSS to generate
additional income to provide increase in pension.
Kilusang Mayo Uno chairman Elmer Labog said government should also consider subsidizing the SSS fund
to ensure that the pension hike is sustainable. With Gerard Naval and Jocelyn Montemayor
http://www.malaya.com.ph/business-news/news/sss-premium-hike-opposed-called-illegal
Malacaang seeks win-win solution to SSS pension hike
Published January 3, 2017, 12:09 AM
by Genalyn D. Kabiling
President Duterte is looking for a win-win solution to resolve the impasse over the proposed pension
increase for Social Security System (SSS) members.
The President intends to meet his economic managers soon to study the matter and balance the interests of
the pensioners and the state pension agency, according to Presidential Communications Secretary Martin Andanar.
The proposed 2,000 SSS pension hike is still being studied by the President upon the recommendation of
his economic managers, Andanar said.
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, he added.
Andanar explained that the President does not want to use taxpayers money, especially money of non-SSS
members, should funding problem arises as a result of the pension increase.
He will again confer and meet with his economic managers to solve the impasse, he added.
President Duterte earlier hit the brakes on the proposed SSS pension hike due to concerns raised by some
Cabinet members that it might bloat the agencys liabilities and lead to its bankruptcy. Budget Secretary Benjamin
Diokno, Finance Secretary Carlos Dominguez and Socioeconomic planning Secretary Ernesto Pernia are reportedly
opposed to the SSS pension increase proposal.
Duterte said he would still study the proposal to increase the SSS pension in two tranches starting this
month.
I promised that it would come your way before the year ends. Im very sorry but thats how it is. I do not own
the money. And hindi naman Ang problema kasi dito is government assures everybody that SSS will remain
solvent for all times, he said in recent interview with state-owned Peoples Television network.
The risk is not really that good but anyway, well meet againIll try to give you the honest explanation
maybe in the month of January, he said.
Upon learning of the Presidents latest position, some lawmakers called on Duterte to fulfill his promise to
approve the increase in the monthly SSS pension of retirees.
The SSS pension hike is one of the campaign promises of Duterte when he ran for president in the last
presidential elections.
His predecessor, then President Aquino, blocked the proposed SSS pension increase, drawing criticisms for
being heartless. At the time, Aquino argued that the pension agency may become bankrupt in a few years if the huge
pension hike benefiting 2 million SSS pensioners is approved.
At the House of Representatives, Assistant Majority Leader Sherwin Tugna of CIBAC Party-list suggested a
P1,000 pension hike in hopes of hurdling the impasse on the proposed across-the-board increase.
I believe that a middle ground will be a hike of around P1,000, Tugna said. This way, there will enough
fund to sustain the future pension of would be qualified SSS contributors and stakeholders.
The House leader was obviously alluding to worries of Malacaang that implementing the pension hike which
would benefit around two million members would cause the bankruptcy or the government-run pension agency.
Meanwhile, Senator Richard Gordon called on the SSS not to renege on its promise to grant the P1,000
monthly pension hike for its members it has promised to give starting this year.
Gordon, chair of the Senate committee on government corporations and public enterprises, said SSS pensioners
must have their increase.
They (SSS) must live up to the end of the bargain. They promised the P1,000, said Gordon when sought
for comment on President Rodrigo Dutertes plan to defer the implementation of the SS pension increase.
We owe our private pensioners support and thats in the Constitution, he said.
Before going on recess last December, the Senate passed a resolution pushing the SSS to immediately
grant half of the P2,000 proposed increase in SSS pension.
It was Gordons committee that approved the SSS pension hike bill but the measure has yet to be approved
by the Chamber. (With reports from Ellson A. Quismorio and Hannah L. Torregoza)
http://news.mb.com.ph/2017/01/03/malacanang-seeks-win-win-solution-to-sss-pension-hike/

Diokno on SSS hike: 'Candidate Duterte different from Pres Duterte'

Budget Secretary Benjamin Diokno also calls out the SSS Board of Trustees for 'passing the buck' to President
Rodrigo Duterte on the proposed pension hike
By Rappler.com
Published Tue, Jan 3, 2017 3:20 PM
MANILA, Philippines In explaining the anticipated decision of President Rodrigo Duterte on the proposed
Social Security System (SSS) pension hike, Budget Secretary Benjamin Diokno urged the public to differentiate the
Chief Executive from the candidate who made promises during the campaign.
Diokno made the statement at a Palace news briefing on Tuesday, January 3, in response to questions
about the status of the pension hike proposal, which is awaiting Duterte's decision.
When told that SSS pensioners and their supporters are up in arms over the anticipated decision of the
President to renege on his campaign promise, Diokno said: "Iba 'yung candidate Duterte sa President Duterte. And
you see that all over, even worldwide. Iba 'yung candidate Trump versus president Trump
May napapangako ka na, 'pag nakita ko ang datos, hindi pala puwede."
(Candidate Duterte is different from President Duterte. And you see that all over, evern worldwide.
Candidate Trump is different from president Trump. You promised something that, when you see the data, it's not
doable.)
Diokno explained that this was where he was coming from in recommending that the President reject the
proposal. The budget chief, Finance Secretary Carlos Dominguez III, and Socioeconomic Planning Secretary Ernesto
Pernia had submitted their position paper to the Chief Executive opposing the proposal.
Duterte, who vowed to grant the pension hike during the campaign, had said that he would depend on the
recommendation of his economic managers on the proposal.
'Don't burden taxpayers'
In explaining his opposition to a pension hike without the necessary corresponding measures, Diokno said
that "historically, it has not been done," not even during the Marcos regime.
Dont use the taxpayers' money to support a retirement fund. Why should you use taxpayers' money,
knowing that some dont have money?It is unfair to call on everybody to increase the pension of a few, he said.
He pointed out that the SSS is a private pension fund. Millions, he said, are not even SSS members and
don't have jobs but pay value-added tax (VAT).
He pointed out farmers and fisherfolk, who are hard to tax, comprise a third of the Philippine workforce.
There are also unpaid family workers or relatives who work for free or do not receive a regular salary in small family
businesses.
"Under the law, under statistics you are employed. So there there are a lot of misnomers. Its hard to collect,
Diokno said.
SSS should solve its own problem
Diokno blamed the SSS Board of Trustees and Congress for the dilemma "burdening" the President.
"To me it's unfair to give the problem to him. In fact, its unfair for Congress to have passed that law which
President Aquino vetoed. It should not have reached the President's desk. The Board of Trustees should exercise
leadership and say, 'No we cannot do it unless we do a number of things,'" he said.
Congress passed the SSS pension hike bill but President Benigno Aquino III vetoed the bill, citing the same
reasons pinpointed by Duterte's economic managers.
"When you pass the buck, you give it to the President, that to me is unfair to the President....He could give it
back to the SSS board of trustees to come up with a solution....He appointed you there, you come up with a solution,"
Diokno said.
The budget chief said prior to any pension fund hike, there should be an adjustment in the contribution of
SSS members. This can only be done, he added, after the administration completes its tax reform program which will
put "more money" in taxpayers' pockets.
This way, he said, the SSS members will be "in a position to contribute in small amounts towards the
pension."
They (SSS board) could increase the collection efficiency and I understand that some corporations are
heavily indebted to SSS, maybe they could call on them, Diokno suggested.
He did express some sympathy for the SSS board, noting that lower interest rates have hit pension funds
bottomline in recent years.
Ten years ago they were around 10%, now its 3-4%. So they have to be prudent with their investments, he
said.
Duterte's economic managers estimated that without restructuring 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.
At the time Aquino vetoed the bill, the SSS fund life was expected to last until 2042. Chris Schnabel/Rappler.com
http://www.rappler.com/business/157262-sss-pension-hike-diokno-duterte