January 21, 2021
Opening Statement of SSS PCEO Aurora C. Ignacio
Hearing of the Committee on Government Enterprises and Privatization
Honorable Members of the House of Representatives:
Fellow workers in Government; and
Distinguished Guests:
Mabuting araw po sa ating lahat!
We thank Chairperson Eric Olivarez for giving us this opportunity to share our thoughts and position on several HOR Bills proposing to defer and/or altogether stop the implementation of the increase in member-contribution to the Social Security System authorized under Republic Act No. 11199 otherwise known as the Social Security Act of 2018.
We are respectfully submitting to the Committee our institutional comments to these bills, in writing, together with the most relevant data and information that support them.
At the outset, however, we would like to state that the provisions of the bills tend to weaken, rather than strengthen the SSS, especially in these difficult times.
The SSS, therefore, respectfully expresses its opposition to the proposals because of their expected adverse financial impact to the financial health of the SSS, and eventually, on the benefits of pensioners, members and their beneficiaries.
As the Honorable Committee may know, the SSS has implemented various Bayanihan measures as its institutional response to the Covid-19 emergency. These included the extension on contribution payment deadline, advance pension, Covid-19 calamity loan, unemployment insurance benefit and moratorium on loan payments. These have posed considerable strain on our liquidity, with the financial outflows outpacing the inflows.
Postponing or stopping the implementation of the increase in member contribution will further exacerbate our already dire financial position. Our studies show these actions will lead to the following:
A projected loss of P41.37-B in Y2021 contributions, increasing annually, in the event of suspension of implementation of contribution increase;
A projected deficit of P14.90-B in Y2021 (inflow vs. outflow); and
Increasing unfunded liability that are already running in trillions of pesos.
We submit that the additional peso contributions are relatively small, ranging from P15 to P100 for employed members, from P30 to P200 for self-employed and voluntary members and from P80 to P200 for OFW members.
Pre-determined contribution schedule is a long overdue reform which will serve to offset the financial impact of improved and expanded benefits that the SSS has provided since 2017. Apart from the emergency Covid pandemic responses, these are the additionalP1,000 monthly benefit allowance, expanded maternity benefit and unemployment insurance benefit, with no corresponding additional funding.
We earnestly request Your Honors’ support for our continuing effort to vitalize and shore up the capacities of the SSS and set aside the proposals to defer or stop the increase in our members’ contribution.
Conclusion
When put together, the small scheduled increase in contributions would be equivalent to around 41 billion pesos of benefits and loans to 3.3 million beneficiaries. This amount should continue to enable the SSS to grant even more benefits and loans for the greater good of the SSS membership, both present and future.
At this time of the CoViD-19 pandemic, when members and pensioners have clamored for heightened benefits, including allowable loans, we would expect that proposed measures should clearly strengthen the SSS, not weaken it financially. Stopping the collection of this considerable amount would clearly weaken our institution established to provide social protection.
As administrators of the SSS Fund, we take very seriously the obligations reposed upon us by the SSS Charter.
We therefore urge everyone to join us as we continue to take a long hard look at our fiduciary duty to shore up the capacities of the SSS, and continue to effectively secure our members in times of unwanted shock situations and contingencies in their lives, through a responsive lifeline they themselves created and maintain through their hard-earned contributions.
Maraming Salamat at magandang umaga/hapon.