SSS’ 9-month income drops on pandemic spending

The net income of the Social Security System (SSS) dropped 34 percent year-on-year to P18.8 billion during the first nine months of 2021 due to the faster increase in expenses, especially of benefits to members and pensioners, than revenues.

The state-run pension fund’s latest but unaudited condensed statement of comprehensive income showed its end-September bottom line smaller by over a third than P28.6 billion a year ago.

However, these preliminary financial statements were not yet compliant with the Philippine Financial Reporting Standards (PFRS) 4 accounting method, which Finance Secretary Carlos Dominguez III had ordered the SSS, the Government Service Insurance System and Philippine Health Insurance Corp. to use in order to provide a “more accurate” financial situation of the government’s social institutions.

As the Inquirer earlier reported, the SSS’s audited financial statements showed a net loss of P427.3 billion in 2020, due as current and future claims were included as liabilities in its expenses. Dominguez had assured that despite this accounting adjustment, the three government social institutions can continuously disburse benefits to members and pensioners as cash flow and funding remained unaffected.

Excluding policy reserves, the SSS’s total expenses jumped 18 percent to P185.9 billion from January to September, compared to P157.8 billion a year ago.End-September benefit payments, which accounted for the bulk of expenditures, climbed to P173.1 billion from P141.7 billion last year.

Outlays for personnel services, maintenance and other operating expenses, and financial expenses also increased year-on-year, even the SSS slashed nine-month noncash expenses to P6.8 billion from a year ago’s P10.4 billion.

The SSS’s end-September total income, while higher than expenses at P204.6 billion, grew by nearly a tenth—a slower pace than expenditure growth—from last year’s P186.2 billion.

Service and business income, mainly from members’ contributions, increased to P197.3 billion from P175.6 billion a year ago, as SSS officials had said the return to economic growth so far this year from last year’s recession resulted in the resumption of millions of jobs shed at the height of stringent COVID-19 lockdowns.

Gains from investments inched up to P6.9 billion from P6.4 billion last year, while other nonoperating income fell to only P376.6 million from P4.2 billion during the first nine months of 2020. INQ