President Rodrigo Duterte has approved a hike of P1,000 for the pension of some two million retired Social Security System members this month, with another P1,000 hike in the future.
The move comes along with an increase of 1.5 percent in premiums of active members by May, which will increase the contribution rate from 11 percent to 12.5 percent to be shared by employer and employee. The maximum monthly salary credit will also increase to P20,000 from the current P16,000.
Presidential Spokesperson Ernesto Abella announced the development in Malacañang on Tuesday. Duterte, who was supposed to lead the press conference, did not show up.
"He seeks to fulfill a social contract with the Filipino people, especially the elderly and the poor who gave the best years of their lives in service; while exercising fiscal responsibility to ensure the economic sustainability and protect the gains made by those who have prudently invested in the nation's future," Abella said.
SSS President and Chief Executive Officer Emmanuel Dooc also said that the pension increase will take effect this month but recomputations and other systems requirement will cause a "slight delay" until February.
Even with the P1,000 increase, Abella said the SSS fund life will continue until 2040 once the increase in the contribution rate is implemented. He said that the pension hike will be covered by current contributions and the SSS investment reserve fund, and not government funds.
"The President is not amenable to using taxpayers' money to fund pension increase since SSS is a private fund," he said.
Duterte's economic managers had earlier opposed a proposal to increase the pension to P2,000, with the President saying he was looking for a win-win solution.
During the campaign, Duterte had promised the increase. His predecessor Benigno Aquino III had vetoed a law mandating a P2,000 pension increase.
Increase to 17 percent
According to SSS Chairman Amado Valdez, the contribution rate could be increased annually until it reaches the target of 17 percent from the current rate over six years.
"But as I said, madadagdagan next year. But the point is, we will always look into our efficiency. Pagagandahin natin iyong investment income. Down the line, baka hindi mo na kailangan mag-increase na additionally," he said.
"So it will just be the stop-gap measure to ensure the sustainability because we want the base line no less than 25 years sana that the pension will stay," he added, noting that the ideal fund life should be up to 75 years.
On top of this, he added that the SSS is also looking into internal reforms to improve their earnings.
Valdez also said that Duterte approved another P1,000 pension hike in 2022. But if its internal reforms will bear fruit, the increase can be introduced as early as 2019.
Arrest for delinquent employers
Dooc said they are looking into how the employers and the employees divide the contribution.
Valdez said Duterte has ordered them to go after employers who do not remit their members' contribution.
"Kung minsan kasi hindi mo na alam kasi from the beginning hindi na sila nagre-register. Pero ima-match namin because we want to share it with the BIR [Bureau of Internal Revenue] eh," he said.
Delinquent employers could end up in jail.
"Bibigyan ka ng summons ng court to appear. If you don't appear, contempt. Arrest. Bench warrant ang tawag doon," he said.
"Talagang huhulihin. Iyong sinasabi naman ni Pangulo na iyong pera na ginastos mo, kinaltas mo, hindi mo ni-remit, estafa iyon. Kaso iyon. Makukulong ka doon," he added. —JST, GMA News