Ways to survive the pension backlash | Inquirer Opinion
At Large

Ways to survive the pension backlash

I happen to live with a retiree and Social Security System pensioner who had been looking forward to the proposed P2,000 increase in the monthly pension, cheering up with every news tidbit about the imminent passage of the draft law. So I’m certain he felt more than a little let down by the news that P-Noy had vetoed the draft law.

Among the explanations offered by the President in the wake of the largely angry reactions of seniors to his veto was that, if he had signed the bill into law, it would have meant leaving the pension fund “bankrupt” before its time, and endangering the pensions and current privileges enjoyed by more than 30 million active SSS members.


Since I’m still a few years away from retirement, I’m among those who could have been affected by the prospects of the SSS going bankrupt. But my son and his wife, as well as all our younger working-age relatives, and maybe even our infant grandson, would face a bleaker future without a retirement authority looking after their welfare.

So while I can understand the hubby’s disappointment—P2,000, while not a princely amount, would still have provided a comfortable cushion, if only to answer for his meds—I can also understand the administration’s position.


Many suggestions have been advanced to make up for the loss of the P2,000 additional pension, especially since the P-Noy administration and the candidates running under the ruling Liberal Party face a brewing voters’ revolt and backlash.

Among these: cutting by half (to P1,000) the proposed additional pension for retirees which supposedly would not even need a law or executive decree but only a board resolution; providing additional services for senior SSS members, such as health coverage; and perhaps increasing the premiums of present SSS members to make up for the shortfall.

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Observers have also said that SSS policies, collections and performance need improvement, especially since board members have enjoyed millions of pesos in bonuses. Apparently, some believe the money could have been better spent—or better deserved?—by the retirees.

Others have also volunteered that SSS collections could be better enforced, with many employers seeking ways to dodge their obligations, with some even refusing outright to send in their counterpart contributions or even to remit the employees’ contributions. This is much to the shock and consternation of members who discover, upon their retirement, that there is no record at all of their contributions and thus no pension is forthcoming.

Actually, the government has been remiss in collecting not just SSS contributions but even taxes, which are the lifeblood of any government wishing to serve the people. Just recently, a reader sent in a piece about her travails—and those of the many “unwashed”—enduring heat, long lines and confusion even if they were at the Taguig City Hall to do their duty and pay the proper taxes. Couldn’t local and national authorities take a more proactive stance in tax collections, or at least make it easier or more convenient for taxpayers to do their duty?

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Perhaps other government bodies could learn lessons from the collection of the so-called “sin taxes,” which took effect with the passage in 2012 of Republic Act No. 10351, or the Sin Tax Reform Law. The government has allegedly been enjoying “robust” collections from taxes on tobacco and alcoholic products, despite reports of firms seeking to dodge their payments, and of the proliferation of allegedly untaxed cigarettes.

Just last November, revenues from sin taxes jumped to P16.3 billion, an increase of almost 40 percent. Of this amount, P12.58 billion was collected from cigarette manufacturers.

And in the face of fears that the higher tax rates would dampen the sales of cigarettes and liquor, and affect in turn the survival of manufacturing firms, the output of such firms has in fact continued to rise, although the Bureau of Internal Revenue, said the report, “does not want to attribute it [to] higher consumption.”

You may remember that one of the justifications for the sin taxes was that the expected higher prices would lead to fewer Filipinos smoking or drinking, and thus reducing the “health burden” attributed to these products. So what does this say about Filipinos’ “health seeking behavior”? Or the willpower of Filipino men—since it’s the male of the species in these parts who comprise the vast majority of smokers and liquor drinkers?

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Also part of the increase in sin tax income must be the BIR’s determination to tax sin products correctly and enforce the proper collection of these taxes.

For example, a World Bank study has found that already, nine out of every 10 cigarette packs sold in the Philippines carry the mandatory tax stamps. World Bank data posted on the website of the Department of Finance show that “over 90 percent of the cigarette packs in retail outlets adhered to the Internal Revenue Stamps Integrated System (Irsis) on tobacco products.”

In a news report published earlier in this paper, the brands Boss, LA and Plaza were said to have achieved 100-percent compliance while 10 other brands—Camel, Champion, Fortune, Hope, Mark, Marlboro, Mighty, More, Philip Morris and Winston—had stamps on over 90 percent of their cigarette packs.

Reacting to reports that some cigarette packs that are being sold do not bear the proper stamps, BIR Commissioner Kim Henares said: “The small percentage of cigarettes in the market may not necessarily be illegal, in the sense that local manufacturers or importers had not paid the correct excise taxes.” A possible explanation could be that these may be old stocks of unstamped cigarettes that were still being sold, she said.

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TAGS: pension, pension increase, Social Security System
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