It’s evident that the pension systems of our uniformed personnel and civil servants are legacies to us of our American colonizers from their almost half-century of rule of our country, which they acquired questionably from Spain for $20 million under the Treaty of Paris on Dec. 10, 1898.
But, as stated by General Antonio Luna, “people are not to be bought and sold like horses and houses.”
Thus, we went to war against the Americans from Feb. 4, 1899 until our defeat on July 2, 1902.
They eventually granted our independence on July 4, 1946 and it would be our Congress that would establish, eight years after, the Social Security System and its pension system for private sector workers.
In fact, it was only on Aug. 14, 1935 when the Americans established their own social security program to limit the “dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children.”
Our Commonwealth’s first president Manuel Quezon must have also wanted the same heavenly program for our countrymen, but for fear of its hellish financial cost, he didn’t initiate it.
After the Second World War, a bolder President Sergio Osmeña would declare that a similar scheme must be provided for “the Filipino, who works in the factory or who tills the soil.”
Accordingly, he recommended its establishment to Congress, which promptly passed a joint resolution creating the Social Security Commission “to undertake a comprehensive survey of the most progressive social security legislation created in all democratic countries.”
Of course, Congress referred only to the USA, Australia, New Zealand and European countries, but not to Japan even if it had also enacted its own national pension scheme during WWII.
After the grant by the Americans of our political independence, several social security bills were filed in Congress. President Manuel Roxas supported them strongly.
But the American Chamber of Commerce opposed these initiatives, and even declared that their enactment “might easily impose a presently unbearable burden on economic enterprise.”
Obviously, American businessmen wanted to show that we were still their dependents economically. Worse, they made it clear that while social security had been an effective welfare program for their countrymen, it was not suitable for us.
In truth, social security was bad for their business in the Philippines.
President Elpidio Quirino pursued the passage of a social security law, and even called a special session of Congress to accelerate it. But for real and make-believe reasons that employers raised—such as lack of actuarial studies—nothing much prospered.
All he got was another study commission to further refine the proposed legislation with technical assistance from Maurice Stack, the British chief actuary of the International Labor Office.
And soon after the election of President Ramon Magsaysay, Republic Act 1161 or the Social Security Act of 1954 was approved on June 18, 1954.
It could have established a universal pension scheme and unemployment insurance for all public and private sector workers but its implementation was opposed inexplicably by employer groups and labor unions.
Eventually, a compromise watered-down RA 1792 was approved on June 21, 1957 and, sadly, it no longer included unemployment insurance.
Seventy years after we’ve been granted political independence by the Americans, we still maintain the pension legacy features of the USA.
Remember the Japanese occupation of our country from May 8, 1942 to July 5, 1945? We, baby boomers and younger generations, never experienced it, and we sometimes wonder: had this relatively short-lived period lasted longer, could we have adopted more Japanese traits and culture including some features of their pension system?
It was only in 1942 when the Japanese enacted their national pension system, and it was to accommodate mainly the cost of war and encourage workers to raise their productivity.
But since then, they had amended substantially their pension system, and made its coverage universal in 1961.
Their national pension system now consists of a flat-rate benefit plus an earnings-related benefit, funded by 17.474 percent of salary that employees and employers share equally. The maximum monthly salary credit is equivalent to P285,672.50, which is fantastically high compared to the P16,000 of SSS.
Of course, the contributions of the Government Service Insurance System are higher than these rates.
Incidentally, our de facto national pension system now resembles the Japanese system. Aside from our salary credit-based pensions from SSS and other public pension funds, we also have now a P500 social pension for indigent senior citizens.
In contrast, however, one who receives a regular pension is no longer qualified to receive a social pension.
Like the Americans, the Japanese adjust annually their pensions automatically based on changes in the cost of living but they adjust their maximum salary credit on an ad hoc basis according to the increase in the national average wage.
President Digong Duterte and his Cabinet secretaries have been in Japan in the past three days, and we are sure that they had ingested enough sashimi, sushi and sake.
We just hope that they had also imbibed the two simple but pragmatic Japanese ways of adjusting annually social security pensions and contributions.
They could then apply them in reforming immediately our national pension system.
