David Cagahastian

January 14, 2015

President Aquino has vetoed the approved bill that proposed to give a P2,000 acr
oss-the-board increase on the monthly pensions of Social Security System (SSS) p
ensioners.
Mr. Aquino communicated the veto to the two houses of Congress in a letter dated
January 12, 2016.
The Congress-approved SSS bill would have increased the monthly SSS pensions of
some two million SSS pensioners by P2,000. The President only had until yesterda
y, Thursday, to communicate the veto, otherwise, the bill would have lapsed into
law.
The ball is now in the hands of the two houses of Congress to pass the bill by a
two-thirds vote of all the members of the House of Representatives, then by ano
ther two-thirds vote by all the members of the Senate.
In his veto message, Mr. Aquino said that the monthly P2,000 increase in monthly
SSS pensions would have threatened the very existence of the SSS Fund itself.
A two thousand peso across-the-board pension increase with a corresponding adjust
ment of the minimum monthly pension will result in substantial negative income f
or the Social Security System, Mr. Aquino said.
More specifically, the proposed pension increase of P2,000 per retiree, multiplie
d by the present number of more than two million pensioners, will result in a to
tal payout of P56 billion annually. Compared against annual investment income of
P30 billion to P40 billion, such total payment for pensioners will yield a defi
cit of P16 billion to P26 billion annually, he added.
Do-nothing scenario
Bayan Muna representative and senatorial candidate Neri Colmenares, who sponsore
d the bill in the House of Representative, however, said that the computations b
y the SSS on the deficit that the SSS Fund would incur if the proposed increase
is effected are based on a do-nothing scenario.
Colmenares said that in the congressional hearings that deliberated the proposed
increase in pensions, it was found that the collection efficiency of the SSS is
estimated at only 30 to 40 percent.
This means that although employers throughout the country almost always deduct t
he so-called SSS contributions from their employees, only 30 to 40 percent of th
ese deductions are actually remitted to the SSS.
Colmenares said that the SSS does not provide the public with these information,
and that if only the SSS would be able to improve its collection efficiency, th
e amount of contributions would already be enough to fund the long-delayed pensi
on increase.
Currently, the lowest pension given out by the SSS is only P1,200 which is given
to those who have contributed the equivalent of a decade in years of service; w
hile the lowest pension being received by those who have contributed the equival
ent of two decades in years of service is only P2,400.

Not a political decision

Despite the reported endorsement by Senate President and Liberal Party chairman
Franklin Drilon for the approved bill, Mr. Aquino vetoed the bill.
Admittedly, the bill is a populist measure that would have swayed votes into Mr.
Aquinos anointed successor and partymate Manuel Roxas III who continues to lag b
ehind in the presidential surveys.
But Budget Secretary Florencio Butch Abad, another Liberal Party stalwart, said th
e decision to veto the bill is a no-brainer, and that political considerations w
ere not even considered by the Presidents advisers in their inputs that led to th
e veto.
Political considerations does not even come into the picture because the very exi
stence of the SSS is being threatened, Abad said.
Abad added that the Department of Finance (DOF), the Department of Budget and Ma
nagement (DBM) and the SSS commissioners opposed the increase in SSS pensions be
cause it would be unfair for the 31 million Filipinos that are currently contrib
uting to the SSS Fund.
According to Abads computations, a P2,000 across-the-board increase in the SSS pe
nsions of 2 million SSS pensioners would require a 49 percent increase in total
contributions from each of the 31 million Filipinos currently contributing to th
e SSS.
Wont pass the buck
Presidential Communications Secretary Herminio Coloma Jr. said that Mr. Aquinos v
eto considered the well-being of not only the 2 million SSS pensioners but also
the 31 million SSS members who are still contributing.
Coloma said that the proposed increase would have halved the actuarial lifespan
of the SSS Fund from the current 26 years to only 13 years or up to 2029 only.
Mayroon nga siyang isang talumpati, sinabi niya I am not the person who will just
kick the can around. Hindi lang niya papayagan na kung merong problema ngayon ay
para bang sige-sige na lamang at kahit na maipasa na lang ito o lumawig pa itong
problemang ito sa susunod na administrasyon, walang-wala sa kaisipan ng Pangulo
yan dahil nasa isip ng Pangulo yung kapakanan ng mga mamamayan at yung pagiging ta
pat niya sa kanyang sinumpaang tungkulin, yung pagiging responsable ng gobyerno n
a gagawin yung tama at gagawin yung makatuwiran para sa kapakanan ng mga mamamayan
, Coloma said.