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Wednesday, November 29, 2023

Pension hike still up in air

PRESIDENT Rodrigo Duterte said Thursday he was still studying whether to approve the proposals to increase the pension of SSS members beginning January 2017 because of concerns over its effects on the pension system. 

“There’s a debate going on. [Budget Secretary Benjamin] Diokno and [Finance Secretary Sonny] Dominguez don’t want it because it will bankrupt the SSS,” Duterte said.

“I haven’t signed it. The two papers are there. I’ve been studying it,” he said referring to the proposals to increase the pension of SSS members. 

But Duterte said he expressed his support for the increase during the presidential campaign.

“The problem is I promised the people, so we have to go somewhere.”

The Social Security System 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.

Late last month, the Senate committee on government corporations and public enterprises agreed to come up with a joint resolution with the House of Representatives for the increase.

That will grant a P1,000 increase in the monthly pension in January and another P1,000 increase in 2022.

Duterte’s predecessor, Benigno Aquino III, vetoed a proposed measure from Congress increasing the pension of SSS members by P2,000, saying the SSS would not be able to handle the hike.

Dominguez, Diokno and National Economic and Development Authority Director-General Ernesto Pernia had earlier said that, without an accompanying “upward adjustment or restructuring of the [SSS] contribution rate,” the proposed pension hike would unduly jack up the unfunded liabilities of the SSS from P3.5 trillion to P5.9 trillion.

The three Cabinet secretaries have argued that since the government subsidy “only introduces undue fiscal burden to taxpayers,” then “the public must not be made to carry the burden of the increase which benefits only privately employed individuals.”

“We strongly recommend that any improvement in pension benefits be accompanied by an upward adjustment or restructuring of the contribution rate from employee members and their employers, as well as self-employed and voluntary members,” the officials said.

“We do not believe it is unfair to ask for this increase as pensions have increased 22 times while the contribution rate has only increased three times since the establishment of the rates in 1980.”

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