DOF: SSS pension hike actually antipoor
Pushing through with proposals to hike the Social Security System’s (SSS) pension benefits sans raising members’ contributions and slapping a two-year ban on farm land conversion would “undermine” the economic growth momentum that the country is currently enjoying, a ranking Department of Finance official said Friday.
Finance Assistant Secretary Paola Alvarez came to the defense of the economic managers who are opposing the Department of Agrarian Reform’s proposal to impose a moratorium on converting agriculture land into other uses. Alvarez, who is also the daughter of House Speaker and PDP-Laban Party stalwart Pantaleon Alvarez, also warned the SSS could go bankrupt if Congress insisted on the P2,000 pension hike.
“To pander to short-term populist initiatives will be a disservice to [President Duterte] and the overwhelming majority who have given him the electoral mandate to effect real change on his watch,” said Alvarez, who is also DOF spokesperson.
Unpopular at first glance, she said the policy recommendations of the economic managers led by Finance Secretary Carlos Dominguez III would eventually allow everyone to benefit via more jobs and higher incomes.
“The big picture is that the Duterte brand of social reforms is anchored on sustaining high growth and enabling all sectors across all regions to benefit from it,” Alvarez added.
She said the country needed to invest in infrastructure, human capital and social protection, at least to a level equivalent to a 3-percent budget deficit, in order to generate funds for pro-poor projects, she said.
“The government certainly cannot do so if the President’s economic team were to support populist proposals willy-nilly just to earn political ‘pogi’ points for the Duterte administration—oblivious to their disastrous impact on revenue generation for the social reform agenda on high and inclusive growth,” she added.
In the case of the proposed SSS pension hike, Alvarez said it would be unwise to use taxpayers’ money to keep the pension fund afloat and divert money that could otherwise be used to fund pro-poor and pro-growth programs.
“It would actually be antipoor if the economic managers were to suggest to the President for all taxpayers, including wage earners and other low-income workers, to pay for the pension hike of some two million private employee-pensioners,” Alvarez pointed out.
For the economic managers, Mr. Duterte should only give his go-signal to a pension hike if there was a corresponding increase in members’ and employers’ contributions.
Specifically, the heads of the DOF, the Department of Budget and Management (DBM) as well as the National Economic and Development Authority (Neda) pitched an increase in members’ contributions to 17 percent in four tranches of 1.5 percentage points each until 2020 from 11 percent at present.
