Anybody whose mind is focused to a particular economic school of thought can have his own prejudice on what many would say about an inexact science. For President Duterte to align his government’s policy to his view would surely be met with mixed feelings. An example would be his decision to increase the social security pension for our retirees. This undoubtedly reflects his ideological sympathy for the economically marginalized—and the political disenfranchised.
The President’s approval of the P1,000-increase in the monthly pension for social security retirees marks a meaningful phase in his administration. He clarified that increase should not be financed by taxpayers’ money, but from the contributions of its members and from its various investments. The increase this January will be followed by a corresponding increase of 1.5 percent in May 2017, an increase in the monthly salary credit from P16,000 to P20,000. This, he said, is in fulfillment of the government’s social obligation to the Filipino people, especially the elderly and the poor who gave their best in service. Such is consistent with the reason the SSS was created for the country’s workers—for them to have something to lean on upon reaching their twilight years.
This populist thinking of the President, as we might say, seems to come out naturally; indeed the SSS should be directed to fulfill its original role. For instance, the oligarchy/elite has always had in mind of putting up big business which comes in the form of huge investment. This theory espoused by the financial looters of government fund is now being debunked much that big business has always ransacked government financial institutions to fund their private endeavors. As always, there is no way the government can do to object to their loan application, for often they come in the form of behest loans. After all, their projects are always stamped as one designed to benefit the people. Besides, there is really no way reject their business proposition for the fact that they present the collateral assets necessary to pay their loan in case of default.
The question now is this: Why are the oligarchy/elite allowed to put up their business using the funds contributed by the workers? The previous management made up of the thieving yellow hypocrites should be reminded that the funds of the SSS, GSIS or similar financial institutions are funds held in trust. Any investment or undertaking using the trust funds should always be for their benefit as entrustor, if ever loans are granted that should come as an exception to ensure the solvency of the system.
Trust funds, unlike government funds, are not tax payments. They represent the members’ forced savings and contributions. Even if we take it that private investment bowered from the system is for the good of the people like building a hospital for the retirees, a home for the aged or anything that would help alleviate the economically disenfranchised sector in society, the bottom line remains that trust funds were used to augment their private business.
Rather, they assume as owners even if the project was paid in whole or in part by the trust fund which is a form of swindling because the profit generated from that investment is taken by the borrowers who now style themselves as owners. The irony is that the members or trust fund owners who were swindled are made to pay for the services it renders much that any private venture is not one of gratis et amore. They hypocritically hold high the name of the people to justify their loan, but charge them as clients. The sad part of it is that profit goes directly to their pockets and the balance is paid only to comply with their loan obligation.
It is immaterial that a portion of the income will revert to the system to augment the pension fund or to improve its multi-faceted service. The important thing is they now assume as owners, and their share of the profit continues for as long as the business venture operates while the share of the system ends as soon as the loan is paid.
It truly takes an ideological mind like the President’s to understand how the system of trust funds works. Increasing the pension fund is good for the economy, contrary to the prognostications of the oligarchy/elite. It may be simplistic as many would think. When the poor, constituting a vast majority in our population, receive more money in the form of salary or pension, the first thing they do is spend their money to purchase consumer goods. They will not buy luxury items much that it is beyond the amount they received.
That surge in spending will undoubtedly increase money circulation. This in turn generates more production, a key to promoting employment. The government should focus on production to promote employment, and not the other way around, much that employment will never be possible if there is nothing to produce, and production admittedly requires capital.
The oligarchy/elite always argue against the idea of people having more money to spend. They fear it would trigger inflation. But in our case, the purchase of consumer goods is a never-ending cycle. In fact, demand will continue to increase because of population growth. What the oligarchy/elite fail to diagnose is that inflation is inevitable because the increase in money supply is not matched by increase in production, and the short supply is taken advantage of by the traders to jack up the price. The inflation we experience is a calibrated scheme to tighten money supply. That means only big business ventures becomes viable.
Since production is at a minimum and unemployment continues to soar, the economy that remains stagnant is made alive only by the usurious business of lending. Huge profit generated that is propped up by the unabated selling of government securities allowed the consolidation of wealth further into the hands of the oligarchy/elite. As a result lending has substituted production as a means of creating wealth which is essentially a monetarist policy of raking in more money out of money. It is this anti-poor policy that has created a wider and much deeper gap between the rich and the poor in our society. President Duterte is trying to rectify this.
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