The SSS has urged President Arroyo for permission to raise premium payments of members, citing as reasons decreases in revenue earnings and increases in operating costs.
The state-run pension fund for the private sector feared that it could go bankrupt within 10 years because of low contributions from its members.
SSS president Corazon de la Paz said they were seeking a yearly increase of one percent in members contributions for five years to keep the fund afloat.
"There is a good chance that the depletion of our reserves would occur well before 2015 from the way the economy has been performing, including the poor collection and investment results," De la Paz said.
The fund has been implementing some cost-cutting measures, re-channeling its capital by being more cautious in investments and trying to reduce by seven percentage points the number of non-paying members which currently comprise about 45 percent of its members, De la Paz revealed.
"Right now, we are playing safe. We are sticking to business loans. At the stock market, we cannot sell because we don’t want to register a loss," she told reporters.
The SSS has more than P152 billion in investments, 27 percent of which is locked in equities. The others are in government securities, housing loans, development loans and real estate.
The SSS suffered a hefty decrease of 70 percent in net income for the first semester of the year.
The agency revealed that its net income from January to June plunged to P1.012 billion compared to P3.4 billion for the same period last year, representing a loss of P1.388 billion.
Net income also dropped by 25 percent during the same comparable period, or from P7.657 billion to P5.785 billion. Despite the decline, the SSS claimed that the first half performance was a 21-percent improvement over the target earnings of P4.74 billion.
The negative income performance was principally attributed to continuing rise in expenditures and contraction in earnings.
For the first half of the year, the SSS posted total gross revenues of P22.37 billion, as against total gross expenditures of P21.36 billion.
Collections and premium contributions accounted for P16.61 billion, representing a growth of 5.9 percent from the P15.68 billion figure registered during the same period last year, but slightly below the targeted P16.92 billion.
Total net revenues for 2001 reached P2.148 billion, compared to the previous year’s P4.57 billion.
Benefits paid to SSS members amounted to P19.16 billion, indicating a 5.9-percent rise compared to P17.67 billion last year.
Belt-tightening measures enforced by the SSS resulted in a slight dip of 0.82 percent in operating expenses, or from P2.22 billion last year to P2.20 billion this year.
On the other hand, reserved funds virtually remained unchanged at P163.6 billion as of end June, compared to P162.2 billion by end-2001.
Overall investments also slightly dropped from P152.354 billion to P150.611 billion during the same semesters.
In the overall earnings department, equipment investments suffered the biggest decrease at 74 percent, or from P1.166 billion to P301.9 million.
Housing loans which generally account for almost half of the total earnings also fell to P2.033 billion from P3.163 billion–a drop of 36 percent mainly attributed to delinquent loan repayments being encountered by the National Home Mortgage and Finance Corp. which reported that its collectible accounts has reached the P39 billion mark.
Earnings from government securities also went down by seven percent, mainly due to lower interest rates.
Gains, however, were chalked up in other areas such as investments in members’ loans or business loans. – With AFP