Colmenares eyes reversal of PNoy veto of SSS pension hike

Dharel Placido, ABS-CBN News

Posted at Jan 14 2016 03:24 PM

MANILA – Senatorial aspirant and Bayan Muna Rep. Neri Colmenares on Thursday criticized President Benigno Aquino III for vetoing the proposed law seeking to increase the monthly pension of Social Security System (SSS) pensioners by P2,000.

''I'm really aghast at the insensitivity of Malacañang to the plight of the senior citizens,'' Colmenares, one of the authors of the SSS pension hike bill, told ANC.

''The decision of President Aquino to veto it is anti-poor, anti-senior citizen."

Colmenares said he will work on convincing 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.

''This is a reasonable demand of our senior citizens na sana makita ng mga colleagues natin…We are representatives of the Filipino people and the Filipino people demand that pensions should be increased,'' he said.

In his veto message to House Speaker Feliciano Belmonte and Senate President Franklin Drilon, Aquino cited the bill's negative effect on SSS income.

''The stability of the entire SSS benefit system, whose present membership comprises about 31 million individuals, will be seriously compromised in favor of two million pensioners and their dependents,'' Aquino said.

The bill also sought to adjust the minimum monthly pension of members who have contributed 10 credited years of service or CYS from P1,200 to P3,200; and P2,400 to P4,000 for those with at least 20 CYS.

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

Given the annual investment income of 30 to 40 billion of SSS, the President said that the payout would lead to a deficit of P16 to P24 billion annually.

He said this would have led to SSS drawing from its Investment Reserve Fund (IRF) to support the pension increase, hence diminishing it and "eventually reaching zero by the year 2029."

But Colmenares said increasing the SSS pension is much-needed because of inflation.

''Based on actual inflation figures, the value of P1,200/month in 1997 is worth P518.86 in 2014 since inflation has increased the 1997 prices by 231.28%. The pension of P2,400/month is now worth P1,037.72, way below the living wage of P5,333 a month for a single person,'' the lawmaker said in a statement.

''The original bill (HB 4365) by this Author in 2011 proposed P7,000/month minimum pension. The P2,000 increase, a compromise amount, is not actually enough to meet the needs of SSS pensioners but hopefully can start to increase the ability of pensioners to meet basic necessities."

'UNFOUNDED FEAR'

Colmenares added 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 ''bankrupt 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.