Aquino calls for hike in SSS contribution

Manila, Philippines --- President Benigno S. Aquino III, on the eve of Labor Day, said now is the right time to amend the Social Security System (SSS) Pension Scheme as he urged SSS members to make a "little sacrifice" by making an additional 0.6 percent SSS contribution that will in turn increase their SSS benefits by 7 percent.

In a pre-labor day dialogue with 18 labor groups in Malacañang yesterday, Aquino said the current 10.4 percent contribution rate for SSS members is way below international standards, which is 14.1 percent.

"Ang mga ganitong reporma sa pamamahala ay ginagawa natin upang mapanatiling matatag ang ating mga institusyon, at masiguro ang pangmatagalang pakinabang nito sa mamamayan [We are doing these reforms in governance to ensure that the institution remains strong and also ensure that it would continue to benefit the people in the long run]," Aquino said.

The President noted that there have been about 21 across-the-board pension increases but contribution rates have only been increased twice since 1980.

"Samakatuwid, hugot tayo nang hugot ng sobra-sobrang pera, subalit wala namang inilalagay sa bulsa. Bangkarote po ang bagsak natin, at iyan na nga mismo ang problema ng SSS [We have been pulling out too much funds but we are not giving sufficient funds in return. Bankruptcy is the current problem of SSS]," Aquino said.

"Hindi pa nababangkarote, pero tinatayang P1.1 trillion ang unfunded liability ng SSS nitong 2011. Kapag wala tayong ginawa, inaasahang tataas ito ng walong porsyento kada taon [SSS is not yet bankrupt but the SSS has an estimated unfunded liability of P1.1-trillion in 2011. If we won't do anything, we expect its unfunded liability to increase to 8 percent per year]," he said.

The President said the 0.6 percent additional SSS contribution would only require a bit of sacrifice as compared to the 7 percent in additional benefits, noting that about P141 billion will immediately be slashed from the unfunded liability of the SSS if the 0.6 percent additional contribution is implemented.

The President also said that as part of the SSS reform agenda, monthly salary credit would be raised from P15,000 to P16,000. In effect, he said, benefits will increase to 7 percent.

"If you're making P10,000 a month-[it] translates to P30 on the part of the worker, P30 on the part of his employer, which will increase his benefits by 7 percent," he said.

Aquino, meanwhile, said he cannot certify the Security of Tenure Bill as urgent even as labor groups pressed for the certification of the bill, noting that he can only certify as urgent bills concerning public calamity or emergency.

He also said there are some measures in the bill that need to be "tweaked" to ensure that the competitiveness of Filipino workers and availability of job opportunities will not be affected by the passage of the bill.

The President also said proposed tax exemptions would just be an "administrative nightmare," adding that a wage hike is determined by the wage boards and not by the Palace.

Meanwhile, progressive labor groups belittled Aquino's pre-Labor Day announcement which focused on expanding the non-wage benefits instead of granting workers their much-awaited wage hike.

Kilusang Mayo Uno (KMU) chairperson Elmer Labog said in statement Aquino's pronouncements will have minimal or no impact to minimum wage earners since it would be coursed through government agencies.

"Aquino again refused to give workers a significant wage hike, something that they can immediately feel as a much-needed relief," Labog said.

"Aquino's promises will not be immediately felt by the country's workers. The funds that he promised to the country's workers will flow through government agencies and are subject to reduction, corruption and redirection," he added.

Partido Manggagawa (PM) official Renato Magtubo decried the additional non-wage benefits as mere "scraps."

"Workers are not children that can be pacified with candy. The Constitution mandated a living wage for workers, but the State keeps minimum wages at starvation levels," Magtubo said

During his breakfast meeting with labor groups yesterday, Aquino announced the additional budget for the government's housing projects, conditional cash-transfer program, health benefits, and labor inspectors.

However, he was not keen on the issue of an immediate increase in the minimum wage, adjustment in income tax exception of workers and illegalizing contractual employment, which he said could have lasting negative effects on the country's economy and employment rate.

"The dialogue today between Aquino and the country's labor sector shows once again that engaging this government in dialogue is futile. It shows that his government treats these dialogues only as propaganda stunts," Labog said.

Relatedly, with the ever increasing prices of basic goods and services, Senate President Pro Tempore Jinggoy Ejercito-Estrada said regional wage boards should grant salary petitions of workers daily.

Estrada, who chairs the Senate Committee on Labor, Employment and Human Resource Development, noted that the current P456 minimum daily wage is no longer enough for a worker to pay the increasing power and water rates as well as health, transport, and education costs.

But a salary adjustment would send a strong message to the world that the nation's economic gains are starting to trickle down.

"This would be one of the brightest spots in our economy-that our daily wage earners can keep pace with the rising cost of living," Estrada said. (With reports from Samuel Medenilla and Hannah L. Torregoza)