MANILA, Philippines - The Social Security System (SSS) has some P325 billion in uncollected revenues which, if collected, would enable it to increase pension, the author of the vetoed bill on raising retirement pension by P2,000 said yesterday.
Bayan Muna Rep. Neri Colmenares turned the tables on SSS officials, who have defended President Aquino’s decision to reject the bill.
Aquino and supporters of his veto have likened the increase to a Ponzi scheme that would eventually lead to the collapse of the pension fund for private workers.
“They have failed to collect P325 billion in revenues. This is shown in a letter SSS president Emilio de Quiros Jr. presented to the House during the hearings on the pension increase bill,” Colmenares told reporters.
The Commission on Audit (COA) also cited another SSS oversight that may partly explain its lack of cash for higher pension.
A COA report said the SSS could have earned P198.118 million in additional income in 2014 had it rented out idle assets worth P17.956 billion that included over 100 condominium units.
SSS officials have also come under fire for their salaries and perks that reportedly amounted to P116 million for 34 executives in 2014.
Colmenares said that had SSS officials collected the amount or even a large part of it, the pension fund would have easily made the increase possible.
He said the system’s collection rate of 38 percent is also mentioned in SSS documents submitted during the hearings.
“We are not confused on our figures, as SSS officers claim. These numbers came from them,” he said.
He pointed out that when the House held hearings on the pension hike bill, SSS officials told congressmen that the measure would cost the pension fund P49 billion a year, and not P56 billion.
“They also informed us that they had P45 billion in earnings, or a deficit of P4 billion. This is the same testimony they gave Sen. Cynthia Villar,” Colmenares revealed.
“That is why she has been mentioning a P4-billion deficit, very much smaller than the figure of P16 billion to P26 billion they gave President Aquino,” he maintained.
He added SSS officials apparently had two sets of revenue and deficit data.
Instead of raking in funds, COA said the SSS is incurring fixed costs or expenses like condominium dues, electricity, repairs, maintenance and water.
State auditors said allowing the properties to remain idle is depriving the SSS of additional funds for social protection and for buttressing its financial standing.
Records show the idle properties of the agency include 102 condominium units in seven condominium buildings, 44,000 square meters of store and/or office spaces, 16 residential houses and 169 parking slots.
As reported by the Asset Management Department (AMD) of the SSS, state auditors said most of the properties are not generating any income.
The COA report said an audit team conducted an ocular inspection of some of the properties at the 15-story Pryce Tower condominium building in Davao City from March 9 to 14 last year.
Records show that the SSS owns 15 units in the building – three units on the 7th floor, seven units on the 10th floor, four units on the 14th floor and one unit on the 15th floor for a total floor area of 2,524.15 square meters. The units were acquired in 2000 through a stock-to-property swap.
State auditors said the units are suitable for office spaces and are fairly maintained and located in busy commercial areas, and for which the SSS could demand high rental rates.
Unfortunately, only one of the 15 office condominium units owned by the agency is being rented.
In 2014, the COA report said Pryce Tower commands a rental rate of P325 per square meter, which means that the 15 units with total floor area of 2,524.15 square meters owned by SSS could have earned at least 9.844 million annually had all the units been leased out.
State auditors said the SSS asset management arm should be required to develop sales and marketing strategies to earn rentals from the idle or unoccupied properties.
The earnings could be used as additional funds for expanding social security protection and benefits to members and beneficiaries of the SSS.
The audit team also urged the asset management department to consider the immediate sale of non-marketable properties to recover investments which could also be used to finance worthwhile projects for members.
In response, SSS officials told COA that the pension fund would pursue sales and marketing strategies including advertising and the posting online of properties available for sale or for lease.
The asset management office said it would communicate with the Housing and Urban Development Coordinating Council (HUDCC) for possible inclusion of SSS-owned condominium units in housing fairs.
“The disposal of some big ticket items through public bidding will be conducted by AMD. The disposal of residential/office condo units will be conducted through public bidding as well,” the SSS said.
Meanwhile, in the House minority news conference, Alliance of Concerned Teachers Rep. Antonio Tinio accused Aquino’s House allies of trying to amend the Constitution through legislation.
“Yesterday, during a hearing I attended, the economic affairs committee endorsed a bill opening the businesses of insurance, lending, financing and investment to 100-percent foreign ownership,” he said.
He argued the measure would run counter to the Constitution, which limits foreign ownership of certain sectors of the economy, including lending, financing and banking.
“What administration allies failed to do through Cha-cha (Charter change), they are now doing through legislation. This measure is being rushed, since senators are considering a counterpart bill,” Tinio said.
He said the economic affairs committee did not even hear the side of Filipino businessmen who would be adversely affected by the arrangement.
“We have a lot of Filipinos who are in the insurance, lending, financing and investment businesses. They will be forced to close shop once big foreign companies are allowed to compete with them,” he said.