With our pensions eroded further by the recent devaluation of the peso by at least 10 percent relative to the American dollar, we pensioners of the Social Security System will have less food on our tables on Christmas Eve tomorrow.
But the optimists among us still anticipate receiving the much-delayed P2,000 pension increase early next year. In fact, they’re definitely certain they’d come before the end of President Digong Duterte’s term of office in 2022.
They’re sure that the new SSS officials would at least keep their initial promise to release the P1,000 first tranche early next year before the start on January 28 of the Chinese Year of the Red Fire Rooster.
At P1,000, the increase is 30.6 percent from the September pension average of P3,273. It is huge by SSS officials’ standards who find it enough basis in projecting the agency’s immediate bankruptcy.
But to pensioners, the P1,000 isn’t much considering that their pensions had only been increased sporadically. It would not be enough to cover for inflation in the years when their pensions were not adjusted.
Until now, SSS officials still worry about granting the Congress-approved P2,000 increase that President Benigno Aquino III vetoed after last year’s Christmas holidays.
Thus, his anointed presidential candidate had to carry last May the burden of this veto’s unpopularity while his opponents, including eventual winner Mayor Digong Duterte, favored its granting and even promised to release it immediately upon elected.
But really, could he have fared better had he agreed to its grant?
The pessimists among us are still betting that no increase would be given, even before Easter Sunday on April 16 or Labor Day on May 1.
Firstly, the American social security program—our default public pension model—would be reviewed and subjected to reforms by the incoming American president and his fellow Republicans who control both houses of Congress. Note that in the November election, they openly criticized their pension system and its reserves which are estimated to be depleted by 2035.
They are now expected to reduce pensions—except those of the needy—and increase contributions. Also, they might try again to privatize social security and repeal the Affordable Care or Obamacare Act.
Here in the Philippines, President Digong practically ignored big business when he kept out of his new SSS board all senior officers of the Employers Confederation of the Philippines, contrary to the long-standing tradition of tripartite representation in the board that the SSS charter mandates.
We thus expect employers to oppose more vigorously any SSS pension increase that would require or even hint of increasing contributions. Conveniently, they would use as analogy—albeit wrongly—the present uncertainties in America’s welfare programs.
In fact, we can emulate how Americans shore up their pension fund. As what they’d done, we could increase the maximum contribution base from P16,000 to P50,000 and raise the minimum qualifying age for retirement pensions to 65 years old. Anyway, we now have our age discrimination in employment law that should allow workers to work beyond 60 years old.
Secondly, after six months in office and being quiet, the president’s Three Economic Musketeers composed of the finance, budget and economic planning secretaries have bravely recommended jointly the increase in SSS contributions “to save the pension fund from bankruptcy amid a looming P2,000 pension hike.”
Their justifications are no longer new—“the proposed pension hike would unduly jack up the unfunded liabilities of the SSS from P3.5 trillion to P5.9 trillion…cut the actuarial life of the pension fund by 14 to 17 years” and bankrupt the SSS “with no funds for other members in the future.”
They have added that this bankruptcy would “adversely affect” the country’s credit rating, even disapproved any government subsidy since it would “benefit only 2.2 million pensioners” and “privately employed individuals” while the rest of taxpayers bear the fiscal burden.
And as if they were three truly wise men, they declared that “matching additional benefits with increase in contribution is the best action government can take from a fiscally sound and equitable standpoint.”
Then, acting as if they were also the SSS board, they recommended specifically to increase the contribution rate from “11 percent to 17 percent upon the implementation of the pension hike.”
They “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 1980.
Their final recommendation is to release the P1,000 increase only after Congress has approved the first package of their own economic proposal, the Comprehensive Tax Reform Program.
What has the controversial CTRP got to do with the P1,000 pension increase? This precondition makes the increase tentative again because that CTRP is uncertain of being passed by Congress.
Thus, with all these sweet but hardly inspiring statements, arguments and recommendations about the pension increase, we pessimists no longer expect any in the next six years.
We just have to make do with less and less food that our stagnant SSS pensions could bring to our tables.