SSS’ estimates inconsistent, thus can’t be all true
This is a rejoinder to the letter of SSS’ Marissu Bugante (“Flawed calculation of SSS income and expenditure,” Opinion, 2/15/16), itself her reply to my letter “‘SSS to go bankrupt’: Ghost of paranoia” (Talk of the Town, 1/24/16).
I made no calculation, let alone “flawed calculation of SSS income and expenditure.” I simply inferred from reported SSS data.
I quote from an article in The Philippine Star’s Jan. 16 issue, “SSS had a comprehensive income of P46 billion in 2014, putting the deficit arising from the pension hike… at only P10 billion. The income is computed by deducting the total amount of benefits payout and operating expenses from membership collection and investment revenue.
“In 2014, SSS expenditures totaled P110.712 billion—P102.598 billion for benefits payout and P8.113 billion for operating expenses.
“Revenues amounted to P155.180 billion representing P120.650 billion from membership collections and P34.530 billion from investment revenue. The government-owned and controlled corporation had reserve funds of P418.316 billion in 2014.”
Misrepresenting this report as mine and distorting its content, Bugante states: “…He simply deducted the SSS’ comprehensive income in 2014 from the total amount of pension payments…” Gosh, I didn’t deduct, let alone deduct income from payments (conventionally it’s the reverse)! This she attributes to me. Unethical!
The fact is, it was the SSS that fed the “flawed calculation” to Malacañang, isn’t it so?
Bugante claims the deficit is P26 billion—P2 billion more than the upper limit of their first estimate (P24 billion). Their second estimate is P10 billion. In October 2015, the SSS was reported to have told the Senate that the P2,000-increase “would result in a projected annual deficit of P4 billion and would shorten the SSS’ actuarial fund life by 13 years, from 2042 to 2029.” (“No ‘papogi’ in SSS pension increase,” Opinion, 1/26/16). As the latter estimate was presumably made under oath, then the other estimates must be damned lies.
If the 2014 reserve (P418.316 billion) is divided by P4 billion, the quotient is 104.58 billion—meaning, with the pension hike, the SSS would theoretically die 104.58 years from 2016. So, other things being equal, where’s the “flaw”? Now, what’s the point of paranoia? John Maynard Keynes aptly said: “In the long run we’re dead.”
Bugante says my computations “completely overlooked market trends, membership growth and other projections which would provide for a proper equation for calculating the deficit.” So, what’s SSS’ unflawed equation after considering “market trends” and “membership growth”? That should be transparent—to demonstrate as well that its or its officials’ integrity isn’t flawed, despite their inconsistent estimates which cannot be all true.
Bugante further declares: “[T]he amount of collectibles would still not be enough to offset the amount of benefit payouts as more members begin to retire, and receive pensions, too, every year. Based on the 2014 Commission on Audit report, the SSS’ collection delinquency was only P13.6 billion.” False!
The 2014 collectible (P13.6 billion) is enough to offset the Malacañang-announced deficit of P10 billion—indeed, enough to cover the aforesaid P4-billion deficit. SSS’ two other, much bigger, deficits estimates appear self-serving.
True, more members retire annually, but many more register annually—as shown by the fact that, since 2009, the annual percentage growth rate of SSS contributions revenue has always been greater than the corresponding growth rate in benefits payment. For example, the 2013-2014 transition shows that contributions revenue increased by 17.1 percent as opposed to only 12.3 percent of the benefits payment (2014 SSS Annual Report).
That the SSS can’t go bankrupt isn’t my logic; it’s statutory guaranty. SSS executives are obliged to ensure SSS viability; but it’s their greater legal/moral obligation to ensure the nonpoverty of pensioners, minimally. This is SSS raison d’etre—not existence per se. It’s awfully legally/ morally wrong to let bankruptcy-resistant SSS simply, comfortably exist—at the expense of aging and ailing pensioners.
—EDUARDO R. ALICIAS JR., [email protected]
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