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When President Benigno Aquino III in January, 2016, vetoed the P2,000 pension hike of Social Security System (SSS) retirees because of its “dire financial consequences,” then presidential candidate Rodrigo Duterte joined in castigating his action which, it seemed, showed how callous the administration was, that it would refuse what Congress had already approved – an increase in the pensions of old retired workers some of whom were getting as little as P2,500 a month.
“I beg the President, yung 2029 fear that the SSS would go bankrupt – you can correct it along the way,” Duterte said. He was referring to fears aired by then President Aquino and SSS officials at that time that the additional P2,000 pension would shorten the SSS fund life to 2029, instead of the current 2042.
The pension bill was refiled in the new 17th Congress, with now President Duterte assuring his support. The SSS itself proposed a two-step delivery of the P2,000 pension increase – an initial P1,000 in 2017, followed in 2022 by the other P1,000. In between the two installments, the SSS said it would generate additional revenue through improved collections and new investments.
Then in an interview on New Year’s Eve, President Duterte said his economic managers – specifically Finance Secretary Carlos Dominguez III, Budget Secretary Benjamin Diokno, and Socioeconomic Planning Secretary Ernesto Pernia – had a “bleak assessment of what’s in store for us in the days ahead” and the risks of SSS going bankrupt if the pension rates are raised.
The SSS itself has already made an intensive study of its own problem and come up with a compromise proposal – P1,000 pension increase now and P1,000 about four years hence. In those four years, the SSS expects to generate additional income to maintain its financial stability. The administration’s economic managers, who are concerned with the total, overall financial health of the country, cannot possibly know better than SSS officials when it comes to its own finances.
President Duterte said he and his economic managers are set to meet again and find a solution so that SSS retirees will not be entirely disappointed. We suggest that the President give greater weight to the views of SSS officials who are right on top of the SSS pension problem, over those of national economic managers concerned with the wider problems of national revenue generation, budgeting, and expenditure.
There is also the very simple and basic matter of a promise and assurance made in the presidential election campaign of 2016. The presidential veto of the SSS pension hike was seen as a callous response to an effort to help old retirees and may have contributed to the tremendous vote for change that swept away the old order and brought in the new.