BUDGET Secretary Benjamin Diokno admitted Tuesday that some of the promises candidate Rodrigo Duterte made cannot be kept, now that he is President.
Speaking at a Palace briefing, Diokno said it was unfair to hold the President to his campaign promise to raise pension funds by P2,000 a month amid concerns over the viability of the Social Security System.
“Candidate Duterte is different from President Duterte. And you see that all over, even worldwide. Candidate Trump is different from President Trump. You promised something that, when you see the data, it’s not doable,” Diokno said.
“You know, when you pass the buck and give it to the President, that to me is unfair for the President,” he said.
Promising an “honest explanation” of the situation, Duterte in a Dec. 29 interview said he might have to break his campaign promise to give a P2,000-a-month, across-the-board increase in SSS pensions.
“I am preempting it because I’m getting a lot of calls about what happened. Is there or is there not anything to expect in the days ahead? I’ll try to give you the honest explanation maybe in the month of January,” Duterte told state broadcaster PTV4.
“I promised that it would come your way before the year ends. I’m very sorry, but that’s how it is. I do not own the money,” he added.
Duterte also echoed the assessment of his economic managers that the SSS would go bankrupt if the pension rates were raised.
“I would really give if only there are no problems… 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,” said Duterte, citing Finance Secretary Carlos Dominguez III, Budget Secretary Benjamin Diokno, and Socioeconomic Planning Secretary Ernesto Pernia.
The SSS is set to implement a staggered P2,000 across-the-board increase in its monthly payments to member-pensioners now numbering 2.2 million. The first tranche of P1,000 will be given starting in January 2017, and another P1,000 in January 2019.
The country’s top economic managers, however, warned that the proposed hike will raise the unfunded liabilities of SSS from P3.5 trillion to P5.9 trillion, as well as shorten the agency’s fund life to 2032 from the current 2042.
In October 2016, the SSS proposed six options on how to implement the proposed P2,000 across-the-board increase in the monthly pension of retirees without depleting the coffers of the pension fund for private sector employees.
To effect the pension increase, former Bayan Muna party-list Rep. Neri Colmenares, one of the proponents of the SSS pension hike bill in the previous Congress, called for the government to subsidize the pension funds, to lengthen the viability of the funds up to 2040.
But Diokno said it was unfair to use taxpayer’s money to subsidize the P2,000 pension increase for SSS members, adding that government subsidy is not the answer to the issue of how the pension funds can be sustained.
“You contribute to that fund, okay and when you retire, you get benefits from that fund, okay. So given that perspective, I don’t think it is fair to say use the taxpayers’ money to subsidize the benefits of the pension members, the SSS members, right?” he said.
“Our principle is that, the pension fund must survive on its own, you don’t need taxpayers’ money to subsidize it,” he said, arguing that the SSS is a pension fund for the private sector and not a government pension fund.
The budget chief also lambasted SSS executives for placing Duterte on a spot where he had to decide whether to approve the pension hikes, and consider prudent options such as imposing higher SSS member contributions and intensifying debt collection efficiency.
“That proposal should have not reached the President’s table. 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,” Diokno said.
“He can give it [SSS memorandum] back and say, ‘Look, I appointed you there to solve the problem, okay. Come up with a solution,’” he added. “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, [former] President [Benigno] Aquino [III] vetoed.”
Diokno added that higher SSS contributions should be effected only after the government has carried out its tax reform program.
“Because of the tax reforms, you’ve got more money in your pockets, and therefore you are now in a position to contribute a small amount for the pension of those who are already receiving pensions. That’s our solution,” he said.
Diokno also encouraged the SSS to increase its collection efficiency to improve its financial standing.
“I understand some corporations have been indebted to SSS. Maybe they could call on them,” he said.
In contrast to Diokno’s view, House Speaker Pantaleon Alvarez said the President would do his best to keep his campaign promise to raise pensions.
“I believe the President will deliver what he has promised. We in Congress are working hard to support and realize his reform agenda for our people,” Alvarez said.
Isabela Rep. Rodolfo Albano III, majority leader for the House contingent’s Commission on Appointments, shared Alvarez’s view.
Albano said the grant of P2,000 SSS pension hike wa a matter of timing.
“It all depends on the availability of funds. The promise does not have to be instant. It could be progressive, it takes time,” Albano said.
Nevertheless, he said the delay in the granting of the pension hike does not mean the Duterte administration is neglecting what it promised.
On the other hand, Eastern Samar Rep. Ben Evardone agreed with Diokno.
“Definitely, there are campaign promises that are unrealistic in the national and local levels. There are many factors that will determine if the plans and programs laid out during the campaign can be funded or not given the limitations of resources,” Evardone said.
Kabayan party-list Rep. Harry Roque said he would file a bill to infuse more capital if necessary into the SSS so that pensions may be increased.
Senate President Aquilino Pimentel III supported the President’s decision to delay the payment of the P2,000 increase, saying the government must be cautious about spending money.
He urged the public to give the President more time to study the matter.
Senator Juan Edgardo Angara said he had already warned about the impact of the pension hikes on the lifespan of the fund.
“We may be mortgaging the next generation’s future with a hike that doesn’t take this into account. Any hike has to be forward looking as well,” he said.
Senate Majority Leader Vicente Sotto III played down the suggestion that the SSS would go bankrupt.
“They are capable of giving it, but the SSS just doesn’t want to, so it is passing it to the President to delay it,” he said.
Senator Richard Gordon said SSS officials should not renege on their agreement to give a P1,000 increase to all SSS pensioners.
He also said the board must show their efficiency to collect dues and also maximize their assets so they can increase the fund’s life.