MANILA, Philippines — President Rodrigo Duterte is eyeing a “win-win” solution on the proposed Social Security System (SSS) pension hike, which economic managers said could cut the agency’s fund life if not accompanied by higher contributions.
Presidential Communications Secretary Martin Andanar said he would meet with his economic team again to address the issue.
“The proposed 2,000 SSS pension hike is still being studied by the President upon the recommendation of his economic managers,” Andanar said in a statement.
“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 said Duterte does not want to use taxpayers’ money, especially those of non-SSS members, to solve the funding problem that may arise because of the pension increase.
A bill seeking to increase the SSS monthly pension by P2,000 was vetoed by then President Benigno Aquino III, who said the hike would drastically cut the life of the pension fund.
Aquino said the pension hike would benefit more than two million pensioners but would burden 30 million members. Critics have assailed Aquino for the veto, accusing him of being insensitive to the needs of senior citizens.
Duterte vowed to increase the pension of retired SSS members before he assumed the presidency.
Economic managers are worried though that the pension hike would increase the unfounded liabilities of SSS if not accompanied by higher contributions.
Budget Secretary Benjamin Diokno, Socioeconomic Planning Secretary Ernesto Pernia, and Finance Secretary Carlos Dominguez said an upward adjustment without a higher contribution rate could bloat SSS liabilities to P5.9 trillion from P3.5 trillion. They warned that the proposed hike could also cut the agency's fund life by 10 years.
The economic managers proposed that member contributions be increased to 17 percent from 11 percent.
Last week, Duterte said he is still looking for a workable compromise on the pension hike proposal.
“With the impasse at the SSS, we had a long debate but the economic managers are having their doubts and they want to talk about it again. I promise it will come your way before the year ends. I am very sorry but that is how it is. I do not own the money,” the president told state-run television station PTV-4.
“The problem here is that the government assured everybody that SSS will remain solvent at all times,” he added.
“I would really give in but the memo of Dominguez, Ben Diokno and Pernia – they had a very bleak assessment of what’s in store for us in the days ahead and the risk is not really that good.”