Last Friday, President Benigno Aquino III vetoed the House Bill No. 5842 or an act mandating a two thousand pesos (P2,000) across-the-board increase in the monthly pension. The proposed House Bill seeks to amend Section 12 of Republic Act No. 1661 or the Social Security System Act of 1997.
The bill was easily passed in both houses because the deliberation was already coincided with the ongoing electoral season and to win votes from millions of pensions who could benefit from the increase of monthly pension. The president decided to veto the bill because of fragile financial capacity of SSS in the long-term. He justified his veto by saying that it is the responsibility of the government to ensure that all its obligations to 31 million SSS members could be met. Of course, pensioners were not amazed of the president’s decision because they had expected that he will leave a sentimental legacy to them before he leaves office and help his presidential candidate, Mar Roxas, to win the presidential derby over other 4 presidential candidates.
Well, there are around 2.15 million pensioners awaiting for 2,000 pesos increase in monthly pension and SSS has annual investment income of 30 to 40 billion pesos and if you multiply 2,000 pesos monthly pension increase by 2.15 million pensioners who are expected to receive the increase, the SSS has to pay them 4.3 billion pesos per month. If you multiply 4.3 billion pesos by 13 months (including 13th month pay), SSS will pay pensioners with 55.9 billion pesos this year alone and that’s way beyond the annual investment income of estimated maximum of 40 billion pesos. By using simple mathematics, the SSS has to drastically increase the monthly contribution by more than 100% from its members to support 2,000 pesos monthly pension increase and I don’t think members will support drastic monthly contribution increase. The bill will really hurt both working members and pensions in the long-run and lawmakers should stop pandering to certain voting groups in exchange for votes this coming election. Don’t make SSS a piggy bank by certain populist politicians.