MANILA, Philippines – In explaining the anticipated decision of President Rodrigo Duterte on the proposed Social Security System (SSS) pension hike, Budget Secretary Benjamin Diokno urged the public to differentiate the Chief Executive from the candidate who made promises during the campaign.
Diokno made the statement at a Palace news briefing on Tuesday, January 3, in response to questions about the status of the pension hike proposal, which is awaiting Duterte’s decision.
When told that SSS pensioners and their supporters are up in arms over the anticipated decision of the President to renege on his campaign promise, Diokno said: “Iba ‘yung candidate Duterte sa President Duterte. And you see that all over, even worldwide. Iba ‘yung candidate Trump versus president Trump
May napapangako ka na, ‘pag nakita ko ang datos, hindi pala puwede.”
(Candidate Duterte is different from President Duterte. And you see that all over, evern worldwide. Candidate Trump is different from president Trump. You promised something that, when you see the data, it’s not doable.)
Diokno explained that this was where he was coming from in recommending that the President reject the proposal. The budget chief, Finance Secretary Carlos Dominguez III, and Socioeconomic Planning Secretary Ernesto Pernia had submitted their position paper to the Chief Executive opposing the proposal.
Duterte, who vowed to grant the pension hike during the campaign, had said that he would depend on the recommendation of his economic managers on the proposal.
‘Don’t burden taxpayers’
In explaining his opposition to a pension hike without the necessary corresponding measures, Diokno said that “historically, it has not been done,” not even during the Marcos regime.
“Don’t use the taxpayers’ money to support a retirement fund. Why should you use taxpayers’ money, knowing that some don’t have money?…It is unfair to call on everybody to increase the pension of a few,” he said.
He pointed out that the SSS is a private pension fund. Millions, he said, are not even SSS members and don’t have jobs but pay value-added tax (VAT).
He pointed out farmers and fisherfolk, who are hard to tax, comprise a third of the Philippine workforce. There are also “unpaid family workers” or relatives who work for free or do not receive a regular salary in small family businesses.
“Under the law, under statistics you are employed. So there there are a lot of misnomers. Its hard to collect,” Diokno said.
SSS should solve its own problem
Diokno blamed the SSS Board of Trustees and Congress for the dilemma “burdening” the President.
“To me it’s unfair to give the problem to him. In fact, its unfair for Congress to have passed that law which President Aquino vetoed. It should not have reached the President’s desk. The Board of Trustees should exercise leadership and say, ‘No we cannot do it unless we do a number of things,'” he said.
Congress passed the SSS pension hike bill but President Benigno Aquino III vetoed the bill, citing the same reasons pinpointed by Duterte’s economic managers.
“When you pass the buck, you give it to the President, that to me is unfair to the President….He could give it back to the SSS board of trustees to come up with a solution….He appointed you there, you come up with a solution,” Diokno said.
The budget chief said prior to any pension fund hike, there should be an adjustment in the contribution of SSS members. This can only be done, he added, after the administration completes its tax reform program which will put “more money” in taxpayers’ pockets.
This way, he said, the SSS members will be “in a position to contribute in small amounts towards the pension.”
“They (SSS board) could increase the collection efficiency and I understand that some corporations are heavily indebted to SSS, maybe they could call on them,” Diokno suggested.
He did express some sympathy for the SSS board, noting that lower interest rates have hit pension fund’s bottomline in recent years.
“Ten years ago they were around 10%, now its 3-4%. So they have to be prudent with their investments,” he said.
Duterte’s economic managers estimated that without restructuring the contribution rate, the unfunded liabilities of the SSS would increase from P3.5 trillion to P5.9 trillion if the proposed pension hike is approved.
At the time Aquino vetoed the bill, the SSS fund life was expected to last until 2042. – Chris Schnabel/Rappler.com