State-run Social Security System (SSS) is fully supportive of the “Build, Build, Build” program of President Rodrigo Duterte’s administration, which aims to maintain a 6 to 7 percent economic growth until 2022 through massive infrastructure projects.
Social Security Commission Chairman Amado Valdez said the state-run pension fund will support the programs under “DuterteNomics”, an economic strategy that aims to ensure economic inclusion of all Filipinos by dramatically raising funds, a large part of which through the proposed tax reform program.
“As the current administration plans to spend some P8.4 trillion on its unprecedented infrastructure program, SSS is expressing its support to this program. In fact, SSS is planning to invest in Public-Private-Partnership (PPP) programs such as road projects and tollways as it would generate a lifetime income for the pension fund,” Valdez said.
SSS President and Chief Executive Officer Emmanuel Dooc said SSS investments in PPP projects would be feasible once the proposal for the SS Charter Amendment pushes through in the upper chamber, bi-cam and hopefully signed by President Duterte.
“Under the proposed charter amendment dubbed as the Social Security Reform Act of 2017, powers and responsibilities of the SSC will be rationalized allowing it to widen its investment opportunities for better fund returns,” said Dooc.
Dooc added that the current 20-year old Social Security Act of 1997 limits the SSC’s power to invest its reserve fund in infrastructure projects, foreign currency-denominated investments, government financial institutions and corporations, housing, private securities, real estate, short- and medium-term member loans.
“Dutertenomics,” is Duterte’s economic strategy to dramatically raise funds–in large part through his proposed tax reform program–and spend big on infrastructure, human capital formation and social protection to sustain the growth momentum, attract investments and create jobs, achieve economic inclusion and transform the Philippines into an upper middle-income country by 2022, by which time poverty incidence will have been reduced to 14 percent.
Based on estimates done by the National Economic and Development Authority (NEDA), the “Build, Build, Build” program is expected to generate 106,824 additional jobs this year; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,964 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,021 jobs in 2022.
“Healthy economic performance will lead to better business for the employers that will eventually be translated to their employees, giving them space for savings such as social security protection that they may use in times of contingencies and retirement. More jobs will expand our membership, increase our contribution revenues and improve the ratio of our actively-paying members to the number of pensioners which will result in a more robust SSS,” Dooc added.
According to Finance Secretary Carlos G. Dominguez, the “Build, Build, Build” program will be funded by a combination of resources from its proposed Tax Reform for Acceleration and Inclusion Act (TRAIN), foreign development aid and commercial loans.
“The SSS supports the effort of the administration on tax reform program because it will result in a more efficient delivery of service to our people, including the pensioners,” Valdez said.
Dooc said the holistic passage of the tax reform package will benefit the low and middle income earners especially with the provision to adjust the long-overdue income tax brackets in the country.
“Based on the tax reform proposal of the Finance department, families receiving a combined monthly income of between P13,000 and P40,000 will have their take-home pay increased between P1,100 and 3,500 per month or P14,000 to P42,000 per year,” Dooc said.
“These savings may be used by families in investments to be used for times of contingencies like sickness, disability, retirement or even death, and we all know that SSS provides these benefits to our members who are religiously and responsibly paying their monthly contributions,” Dooc added.
In SSS, for every monthly minimum contribution of a member, which currently stands at P110, an average of P15 is expected to be his approximate benefit pay-out per P1 contribution.