SSS income down 41.6% to P2.67B

The Social Security System (SSS) posted a net income of P2.67 billion in 2001, down 41.57 percent from the P4.57 billion registered in 2000, despite an eight-percent hike in gross income to P46.06 billion.

SSS attributed its lower net earnings to a 15-percent increase in members’ benefits, with total payments amounting to P39.01 billion last year compared to only P33.89 billion in 2000.

Earnings from investments increased by 18.8 percent from P12.34 billion in 2000 to P14.66 billion last year despite the poor performance of the economy and the equities market.

Contributions of members also grew, but only by 3.56 percent or from P30.32 billion in 2000 to P31.40 billion last year.

"Payment of benefits is outstripping earnings and contributions," Corazon S. de la Paz, SSS president and chief executive officer, said in a press briefing yesterday.

De la Paz said they would be happy to achieve a single-digit growth in net earnings this year taking into consideration the weak economy, poor investment climate, problems of peace and order, and a relatively weak equities and properties market.

That can be achieved if they will be able to increase dramatically their collection contributions and improve their earnings from investments including disposal of foreclosed properties. Of the 24 million members, the pension fund only realizes consistent collection from a little over eight million.

It has still to realize some P300 million from foreclosed properties coming from bad loans. They are likewise looking at receivables of up to P28 billion from housing agencies such as the National Home Mortgage Finance Corp.

The bulk of their disbursements was the P17.69-billion paid to retirement claims, which was 23.38-percent higher over the previous year. Death benefits reached P12.96 billion or a nine-percent increase from the P11.89 billion released in 2000.

To increase reserves for benefit payments in the future, the SSS wants a rate hike in the contributions.

De la Paz admitted that it was an unpopular move but without one, "the fund would run out of reserves by 2015."

The government-run pension fund for the private sector has an investment portfolio worth roughly P158 billion. Loan to members account for over 50 percent of the portfolio while another 29-percent represent equity investments including the controversial Belle Resources Corp.

Another 16 percent is parked in government securities and the balance in property assets.

In the first semester last year, earnings were already P3.4 billion while investment income reached P7.57 billion. However, benefits issued to members amounted to P17 billion.

In 1999, SSS’s net income reached P13.4 billion and P14.98 billion the year before that.

In an earlier report, the pension fund released P643.18 million in commercial and development loans covering 27 projects from January to June this year.