As the rise in expenses due to higher pension payouts outpaced the increase in its revenue, the net income of state-run Social Security System (SSS) fell 38 percent year-on-year to P8.6 billion in the first nine months.
The SSS’s latest statement of comprehensive income showed that from January to September, its total income hit P151.3 billion while expenses amounted to P142.7 billion.
Its net income as of end-September, however, was lower than last year’s P11.9 billion.
The SSS’s total income, including service and business income, gains and other non-operating income, rose 3.7 percent during the nine-month period from P145.9 billion a year ago.
The rise in total income was achieved despite a drop in its gains to P2 billion from P5.6 billion during the first nine months of last year.
However, total expenses as of September climbed at a faster pace of 6.3 percent from a year ago’s P134.3 billion.
End-September benefit payments rose to over P134 billion from last year’s P127.8 billion. These included retirees’ pension benefits, which were hiked by President Duterte by P1,000 a month last year.
Personnel services expenses inched up to P4.6 billion from P4.5 billion a year ago, even as maintenance and other operating expenses declined to P1.6 billion from P1.8 billion.
Financial expenses were also up to P62.1 million from a year ago’s P61.7 million.
Also, noncash expenses jumped to P2.4 billion at end-September from only P166.9 million last year.
The SSS initially wanted to jack up members’ contribution rate to 14 percent this year to compensate for the impact of the pension increase on its fund life.
Last year, the SSS disbursed an additional P33.5 billion following the President’s approval of an initial P1,000 increase in monthly pension.
The SSS’s fund life was already slashed by 10 years to 2032 from 2042 previously when the additional P1,000 a month was granted to pensioners.
SSS president and chief executive Emmanuel F. Dooc had warned that implementing the second tranche of the pension hike next year, as promised by Mr. Duterte, would further slash the fund life up to only 2026—which means the SSS will no longer have funds for payment of benefits in seven years’ time, unless its fund is replenished.
Under the SSS charter, the President can increase the contribution rate, but Mr. Duterte has not done so despite dwindling funds.
As such, the SSS was banking on Congress’ approval of the proposed amendments to its charter, which included granting the Social Security Commission power to hike contribution rates.—BEN O. DE VERA