MANILA, Philippines — The proposed Social Security System (SSS) pension hike, which economic managers claimed would result in financial woes for the pension fund, should not have reached the desk of President Rodrigo Duterte, Budget Secretary Benjamin Diokno said Tuesday.
Diokno said it was unfair for the SSS board to pass the problem to Duterte, who now has to strike a balance between fulfilling his promise to pensioners and the need to maintain the financial viability of the pension fund.
“To me, it’s unfair to give the problem to him. In fact, it’s unfair for Congress to have passed that law, which, as you know, President (Benigno) Aquino (III) vetoed,” Diokno said in a press briefing in Malacañan.
“It should not have reached the president’s desk. The Board of Trustees should have exercised leadership and say: ‘No, we cannot do it unless we do the following things,’” he added.
Diokno was referring to a joint memorandum from the SSS Board of Trustees expressing support for the pension hike.
A bill seeking to hike the SSS monthly pension by P2,000 was vetoed by Aquino because of its impact on the pension fund’s financial health. The former president said the measure would only benefit more than two million pensioners but would burden 30 million SSS members.
Before assuming office, Duterte promised to increase the pension of retired SSS members, saying this would provide social protection to retirees.
Last month, SSS Chair Amado Valdez said a joint resolution on the proposed pension increase may be signed by the president before the end of 2016.
Economic managers have expressed reservations about the proposal, saying it would bloat the liabilities of SSS and cut its actuarial life if not accompanied by higher contributions.
In a memorandum to Duterte, Diokno, Socioeconomic Planning Secretary Ernesto Pernia, and Finance Secretary Carlos Dominguez said a pension hike without an upward adjustment to the contribution rate could raise SSS liabilities to P5.9 trillion from P3.5 trillion. They said the proposed pension increase could also reduce the fund life of SSS by 10 years.
Economic managers suggested that the contributions of SSS members be raised to 17 percent from 11 percent.
When reminded that Duterte had promised the pension hike before he became president, Diokno said: “Well, I am not a politician, but… the candidate Duterte is different from President Duterte.”
“When you see that all over, even worldwide, candidate Trump versus President Trump. You have promised something but when you see the data, you will realize that it is not doable,” he added.
Diokno pointed out that historically, SSS was not touched by the government because it is a private pension fund. He said it would be unfair to taxpayers, especially non-SSS members, if their money is used to support a private fund.
“So if there’s any solution, I think they should find it within the system and what we are proposing is a salary — a contribution adjustment, a higher pay but we are not recommending it right now,” Diokno said.
Diokno noted that the president would have the final decision on the issue.
“I mean I’m just doing my job. If he decides otherwise, I have done my job, right?” the budget chief said.