PNoy defends 'heartless' veto on SSS pension hike

ABS-CBN News

Posted at Jan 15 2016 04:00 PM

MANILA - President Benigno Aquino III on Friday defended his move to veto the bill seeking P2,000 across-the-board increase for Social Security System (SSS) pensioners.

Aquino insisted that if he merely wanted public favor, he could have easily approved the proposed pension hike without regard to its expected effect of bankrupting the SSS by 2027.

"Pwede akong magpa-pogi, tulungan ang endorsement ko sa lahat. Tutal naman sa 2027, baka nakalimutan na ako. Hindi na ako masisi. Sisisihin na lang kung sinuman ang namamahala. Pero tama ba iyun na dadalhin ko ang taumbayan sa direksyon na magiging kapahamakan nila?" he said in a press conference in Malolos, Bulacan.

The Chief Executive reiterated that the bill will benefit two million pensioners and their dependents but disrupt the stability of the entire SSS benefit system and negatively affect 31 million other pensioners.

Aquino said that multiplying the proposed P2,000 pension increase by the current number of more than two million pensioners will result in an annual payout of P56 billion.

Given an annual investment income of 30 to 40 billion of SSS, the President said that the payout would lead to a deficit of 16 to 24 billion annually.

"Hindi biro iyung P26 million na deficit every year. Malamang na mag-increase dahil may automatic na P150,000 new pensioners every year," he added.

This would have led, he said, to SSS drawing from its Investment Reserve Fund (IRF) to support the pension increase, hence diminishing it and eventually reaching zero by the year 2027.

"Hindi capricho ito at ibabangkarote mo iyung SSS kapag pinasok mo ito (pension hike) nang 2017. Siguro maski sinumang mamahala ng gobyernong ito, importante na may commitment ang estado, in this case, ang SSS na agency ng gobyerno, na ibigay sa'yo ang benepisyong ipinangako sa'yo," Aquino said.

"Ngayon gagawa tayo ng mungkahi na matutugunan ang isang grupo at magso-sorry na lang doon sa lahat ng sasali sa sistema mula ng taong ito hanggang sa 2027, iyun ang huling babayaran. Tapos noon, bahala kayo o bahala na si Batman -- hindi naman yata tama iyun."

Aquino's decision to block the proposed bill earned him labels of being "heartless" and "insensitive" from militant groups and enraged SSS pensioners who mounted protests today.

Reacting to this, he said: "Paniwala ko, bilang ama ng bayan, hindi naman iyung tugunan mo lang iyung kailangan ngayon. Kailangang mong mapagplanuhan iyung darating na pangangailangan,"

"Heartless ako ngayon. Kung 2027 nagbangkarote iyan, iyung 30 million or more ang magsasabi naman careless ako at heartless at the same time, na pinabayaan ko sila," he added.

'UNFOUNDED FEAR'

Senatorial aspirant and Bayan Muna Rep. Neri Colmenares, however, said he wants to convince his colleagues at the House of Representatives to override the veto.

At least 217 representatives - 2/3 of the total number of members of the lower chamber - are needed to override the president's veto.

Colmenares has claimed that the fear of the government of the shortening of the fund life of the SSS is an unfounded one.

''Ang unahin dapat ng Malacañang ay ang pagpahaba ng buhay ng myembro at hindi ang pagpapahaba ng buhay ng pondo,'' he said.

''Ang issue talaga ngayon is this: Hindi talaga nakakabuhay ang pension ng SSS at dapat dagdagan iyan. Ang SSS, for a long period of time, has failed in its mandate to provide social security."

In the statement, Colmenares said the SSS' claim of the shortening of its fund life in case the bill gets passed was only a scare tactic.

''For SSS to claim that shortening its fund life to only 14 years or up to 2029 will lead to its bankruptcy is a scheme to scare those who do not understand the actuarial potential of a 14 year fund life. After all, SSS did not find the situation worrisome enough to initiate institutional reforms when it officially admitted to having a five year fund life in 2001."

''The unfunded liability argument, which SSS claims amounts to P1.19 trillion is a similar scare tactic. All government pension schemes have unfunded liabilities, many of which are larger than the Philippines per capita but none of them went bankrupt."

Colmenares also debunked the ''bankruptcy argument'' of the SSS, saying the government, under the RA 8282 has the obligation to appropriate funds should the SSS fail to replenish the projected P4 billion deficit resulting from the pension increase.

''There can never be a bankrupt pension system because government will always intervene if necessary. Even Vietnam subsidized its last 10% pension increase,'' he said.