Duterte approves P1,000-SSS pension hike this year

President Rodrigo Duterte has approved a P1,000-increase in the Social Security System (SSS) pension this year, half of the increase proposed by legislators.Presidential Spokesperson Ernesto Abella delivered the President's decision in a televised broadcast on Tuesday, January 10.

"The President approved a P1,000-pension hike this month with a corresponding 1.5% contribution rate hike in May 2017, and an increase in monthly salary credit to P20,000 from P16,000," Abella said.

Duterte finalized his decision during the Cabinet meeting on Monday, January 9, when the SSS pension hike was discussed.

SSS Chairman Amado Valdez said the initial P1,000-pension hike to be implemented this January will be followed by another P1,000-hike in 2022 or even earlier, in compliance with the congressional resolution.

"The first P1,000 [will be implemented] this January. We projected the next P1,000 in 2022 but if we are able to implement and get favorable results, maybe it won't take until 2022, maybe by 2019 we can already comply with the next P1,000," he said during the press conference. 

The SSS has enough funds to support the pension hike this month, said SSS President Emmanuel Dooc.

"This will take effect this month, if I'm not mistaken, but maybe due to some system requirement because we need a recomputation, we need to prepare a table, there may be a slight delay," said Dooc.

Higher contributions

The pension hike, however, will mean an increase in contributions of SSS members to 12.5% beginning May, from the current 11%.

"We will increase it [to] 12.5% as proposed by the commission. We want to implement it by May this year," said Dooc.

The additional total contribution will range from P15 to P740, said Abella, still reading Duterte's statement.

A Congress resolution on a P2,000-pension hike was presented to Duterte for his approval. His economic managers – Finance Secretary Carlos Dominguez III, Budget Secretary Benjamin Diokno, and Socioeconomic Planning Secretary Ernesto Pernia – submitted a position paper to the President opposing the hike as it would bankrupt the fund.

Duterte indicated in his string of media interviews on December 29, 2016, that he would not approve the proposed P2,000-pension hike, following the recommendation of his economic managers. He told PTV4 then that he would personally explain his decision to the public in January.

Duterte was not at the press conference on Tuesday and let Abella read his statement instead. According to Abella, Duterte could not make it to the press conference due to "overlapping meetings with certain dignitaries." (READ: Why raising pensions isn't that simple)

Last week, Diokno seemed to prepare pensioners for disappointment as he explained in a news conference that the President was not bound by some of the promises that he made during the campaign, such as support for the P2,000-pension hike, if it would have more detrimental effects than benefits. (READ: Diokno on SSS hike: 'Candidate Duterte different from Pres Duterte')

'Prudent' decision

Valdez thanked Duterte, his economic managers, and Congress for the decision, which required a balancing of views.

"We want to thank profusely our President for his sense of caring for our pensioners...We also want to thank the economic managers for their prudence in reminding us we have to ensure the sustainability of the fund. In doing so, the lifespan of the fund will even pass the threshold of 2042 and perhaps beyond," said Valdez.

Reforms Duterte wants implemented for a full pension increase include stopping the granting of large allowances and honorarium to top SSS executives, according to Agriculture Secretary Manny Piñol, who was at the Cabinet meeting.

He also wants charges filed against employers who don’t remit the SSS contributions of their employees.

"You will find, in the following days, cases filed against erring employers. There will be some contempt charges against employers who do not respond to the summons of the court," said Valdez.

During the 2016 campaign period, Duterte promised to approve the SSS pension hike if elected president. He made the promise around the time former president Benigno Aquino III rejected the hike, citing the same reason Duterte's economic advisers gave: that the move would lead to a financial crisis for the SSS and would burden taxpayers.

"President Duterte said he will not renege on his commitment but added that he also has to listen to the advice of the economic managers of the government to ensure the viability and survival of the SSS," said Piñol. – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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