Streetwise

I waited to hear the views of a friend, a former SSS top executive who sought a meeting with Rep. Neri Colmenares, original sponsor of the bill that seeks to raise the Social Security System (SSS) monthly pension for more than 2 million retirees by P2000. I wanted to balance out my thinking on the issue even though I had read and heard almost all there was to hear on both sides of the argument.

I wanted to give this person the benefit of the doubt since I know him to be an upright person, hardworking, a top professional in the private sector before being recruited into government service, and having come from humble beginnings. Unfortunately the more he expounded on the basic position of current SSS executives, on which basis Pres. BS Aquino vetoed the bill, the more I became unconvinced of the merit, nay soundness, of the presidential veto.

While acknowledging that the SSS fund is a social fund meant to serve the needs of its members, the former official tried to convince us that people expected too much from the fund, that the contributions were way too small while the services it was giving out were costing a lot. Ergo the basic solution is to increase the members’ contributions. In the meantime, there could be no increases in benefits that would only shorten the life of the fund.

He acknowledged, however that increasing contributions is easier said than done. The convincing would have to come in the form of more efficient and substantial services.

Now when one considers that the SSS was listed recently by the Civil Service Commission as one of the top three government agencies that they received complaints about in terms of services, doesn’t the SSS indeed have a lot of convincing to do?

Wouldn’t a reasonable increase in pensions serve as a strong signal that the agency was willing to work hard to be able to give members a decent pension when they retire?

When asked about plugging the leaks in the system like the billions of contributions collected but unremitted by employers, the former official lamented how difficult it is to do this, that SSS lacks personnel and resources.

So how can SSS convince its members that they need to give more when what they are already contributing is not collected properly by SSS. (Or as one struggling entrepreneur counter-lamented, it takes SSS forever to officially tally contributions in their data base from the time the payments are deposited in receiving banks. In the meantime their employees cannot take out any loans and vent their ire on their employers!)

About the touted sterling performance of the SSS in terms of fund management under the stewardship of SSS President De Quiros, my friend intimated that there were SSS properties that were not sold during earlier administrations in order to have higher returns with the property boom in certain areas of Metro Manila. This certainly didn’t seem to take such a financial genius to figure out; that it was quite a matter of waiting for a better price.

In the meantime, .isn’t it unconscionable for SSS executives to give themselves such fat bonuses on the ground that they made the fund grow through their supposedly astute handling of SSS investible funds when they refuse to let the ordinary members share in some of that purported growth. On this point my friend couldn’t help but nod in agreement.

Rep. Colmenares came quite prepared for the one-on-one discussion bringing with him documents that the SSS had submitted to congressional hearings. He had the facts and figures at his finger tips. He questioned the sudden jump in the projected fund deficit to 16-26 billion pesos when SSS officials had stated under oath in congressional hearings this would amount to only 4 billion pesos.

Congress had passed Colmenares’ bill unanimously having taken into account the 4 billion deficit and the ways by which the SSS could cover this by introducing needed reforms within the next five years, including improvement in collections and lessening administrative inefficiencies and costs. And if, despite all these internal reform measures the deficit remained, government is mandated to shore up the fund by means of a direct subsidy.

Indeed, if government can subsidize a dole-out program such as the Conditional Cash Transfer worth 62 billion pesos, why can’t it provide a safety net for working people who are doing their share not only in contributing to the economy but to their own social security fund .

It has also been pointed out by various quarters that with the Aquino administration’s boast of a 268 billion peso reduction in the government’s budget deficit, it has more than enough leeway to back up the P56B for the pension hike plus the alleged projected P16-26B SSS deficit.

How convenient — or deceptive as the case may be — for SSS executives to belatedly come up with such a humongous figure of 16-26 billion pesos in fund deficit that would purportedly run the SSS fund to the ground in 13 years.

This report apparently stunned and scared Pres. Aquino — during the four years the bill was being deliberated apparently he took no notice of it and its supposed dire implications — into action. He obviously took the SSS executives’ word hook, line and sinker, enough for him to issue the politically unpalatable veto

Thereupon the entire Malacanang propaganda machinery was made to work overtime to spread the scare to the rest of the public, most especially to SSS non-pensioners who the Aquino administration wants to dupe into believing that there will be nothing left for them when it is their turn to retire.

Big business honchos, top-caliber professionals in the financial sector and neoliberal academics and pundits who think government subsidy is anathema to the “free market” have swallowed the bankruptcy scare hook, line and sinker too. One wonders why they have chosen to suspend their usual sharp analytical abilities in this instance.

The reason is not hard to fathom. They regard the SSS not as a social fund but as a huge capital fund that one necessarily subjects to actuarial studies regarding its projected life.
Thus the point is reduced to how to ensure that more comes in than what goes out.

Yes, even as hundreds of billions of the SSS fund are a plump source of income for a train of fund managers, stock brokers, investment bankers, accounting firms and the like.

In the final analysis, the two sides to this issue amounts to a class divide. The less in life can’t understand the reason for the presidential veto. Those who can nonchalantly spend 2000 pesos and more on dinner-for-two at a fancy restaurant can’t appreciate the clamor for a pension increase in their lifetime.

Published in Business World
1 February 2016