SSS officials got P127M in benefits from Philex

Four officials of the Social Security System (SSS) received more than P127 million in in the exercise of stock options, per diem, and allowances as board members of a mining company from 2007 to 2010, the Senate finance committee said Tuesday. Outgoing SSS chairman Thelmo Cunanan received a total of P83.1 million from Philex Mining Corp., former SSS head Romulo Neri P17.2 million, former SSS chief Corazon dela Paz-Bernardo P20.7 million, and SSS commissioner Sergio Ortiz-Luis Jr. P6.3 million. Senator Franklin Drilon, committee chair, said at the hearing on excessive paychecks of executives of government-owned and –controlled corporations (GOCCs). Cunanan gained P66.6 million in the exercise of stock options as a director of in Philex Mining by virtue of the shareholdings of SSS in the firm, Drilon said, citing company records. For exercising their stock options as directors of SSS, Neri made P11.9 million, Dela Paz P9.7 million, and Luis P4.6 million, Drilon said. As representatives of the pension fund in listed corporations, SSS commissioners get to exercise rights to stock options. This means that whatever money they earn from the private sector, by virtue of the shareholdings of the pension fund in those companies, should be remitted to the SSS, according to Drilon. "It is very obvious that there was abuse on the part of the commissioners of the SSS when they took it upon themselves to be entitled to these gargantuan sums," the senator said. Cunanan was not available for comment because he is currently being confined at the Medical City Hospital in Pasig due to respiratory problems. But Neri said that there was no clear provision in the law that would compel them to remit what they gained from exercising stock options. "It's all legal. I have consulted a lot of lawyers," he told reporters in an interview after the hearing. Republic Act 7656 requires GOCCs to declare and remit at least 50 percent of annual net earnings, including cash and stock or property dividends, to the national government. But pension funds like SSS are exempt from the rule. Apart from Philex, SSS – the pension fund for private sector employees - also owns substantial shares in Union Bank, Energy Development Corp., Globe Telecom Inc., and Ayala Corp. Thus, the pension fund’s top executives also sit on the board of those companies. Criminal liability? Drilon said that criminal liability could possibly arise from the failure of the SSS officials to exercise "extraordinary diligence" required of managers of SSS, which also functions as a trust fund for employees who contribute a portion of their salaries to the system. "These funds do not belong to the government. The SSS was put up in order to manage these trust funds which belong not to the government but to the workers," he said. The failure of those executives to remit their bonuses, which come from the profit of private companies where the trust fund has shares, might amount to malversation of public funds under the Revised Penal Code (RPC). But since the RPC does not have clear provisions on bonuses received by GOCC officials, Drilon said that they are considering imposing penal sanctions on violations of the law that they plan to craft. "In other words, if you received compensation beyond what is authorized and you failed to turn this over to the agency where you belong, there can be some criminal liability," he said. Earlier in the day, Subic Bay Metropolitan Authority Administrator Armand Arreza denied that he received P26.9 million for his work in the state firm in 2009 alone. —VS, GMANews.TV