MANILA, Philippines - The Social Security System stands firm on its decision to raise members' contributions, saying it is the best option to keep the pension fund afloat.
On ANC's Headstart, SSS president Emilio de Quiros warned the pension fund could go bankrupt by 2039, if its funds run out.
He estimated the SSS needs to pay as much as P3.7 trillion worth of benefits, but its current funds could cover just 70% of that.
De Quiros noted another option is to cut benefits, but the SSS is not taking that route.
He said the last resort would be to get funds from the national budget to keep paying benefits.
"They will have to depend on government. Based on our charter, there is government guarantee that whatever reason SSS can't anymore pay retirement and all other benefits, government will have to fund it... It will depend on the budget. This means every year, the government will provide for it," De Quiros said.
Starting this month, SSS monthly contributions will increase by 0.6% to 11% from the previous 10.4%.
For employed SSS members, the employer will shoulder 7.37% of the contribution while the employee will pay the remaining 3.63-percent. Self-employed and voluntary members will shoulder the entire 11% monthly contribution rate.
De Quiros compared the SSS contribution rate with counterparts in India, Malaysia and Vietnam, saying it is much lower.
"We used to have 10.4%, which we are increasing to 11%...You will notice in India, it's 36.11%. Malaysia is doing 25.25%, and Vietnam is 28.50%," he said.
He also noted other countries are charging more than twice the rate at higher salary base.
The SSS fund has been plagued with controversies over hefty bonuses for its executives and allegations of mismanagement.
But De Quiros insisted SSS made wise investment bets, citing a decision not to invest in the US housing market, which spared it from the US global financial crisis in 2008.
But the SSS chief says investing abroad is now an option.
"No, we've never invested abroad. All of our investments are local, they're government securities, we trade in the equity market... We're not saying we will not (invest) in the future. That's something we are looking at to maximize our earnings," he said.
However, Bayan Muna Rep. Neri Colmenares said the SSS should address uncollected premiums first before raising contributions. - With ANC