Dutertenomics: Sustaining the  Economic Gains
Manila Standard Job Openings

Truth and optimism

The sixth and last State-of-the-Nation Address of President Benigno S. Aquino III last Monday was supposed to be truthful and optimistic.

That was how the dutiful Secretary Sonny Coloma of the Presidential Communications Operations Office described it the day before it was delivered. Pretending that he had not seen its final copy, Secretary Coloma must have been jesting while pre-conditioning us into thinking so.

Still, my fellow retirees and I patiently watched it over television in the comfort of our homes, concerned all the time about the hundreds of militant protesters along Commonwealth Avenue who demonstrated their discontentment and displeasure with PNoy on that cold rainy day.

They never stopped chanting anti-PNoy slogans and kept denouncing the lies that they claimed PNoy was telling in his last SONA as they marched toward the Batasang Pambansa Complex. Expectedly, they were stopped by thousands of policemen who employed barbed wires, concrete barricades and water cannons. As in the previous five years, the protesters had to contend themselves eventually by burning effigies of PNoy.

In truth, we were only interested in hearing announcements about pension increases and left the rest of the SONA for scrutiny to the more serious social analysts.

But for two long hours, we heard nothing optimistic to inspire us.

Instead, PNoy jolted us by asking Congress for the “urgent passage of the Unified Uniformed Personnel Pension Reform Bill …so that we can finally set up a sustainable and just pension system for our uniformed services.”

He even bewildered us by citing the seldom discussed reason for its urgency –

“I cannot stress just how important the passage of this law is: at present, we already need trillions of pesos to fund the pensions of our servicemen. We need the authorization from Congress to address this very complicated situation.”

Dramatic and convincing as he has always been, he really sounded as if he urgently needed those trillions of pesos, and was serious about releasing them.

Did he really think that members of both chambers would still authorize a lame duck president like him with such a huge amount of money?

In fact, he did not speak the whole truth and should have informed us about the ramifications of these trillions of pesos for the sake of transparency and “Daang Matuwid.”

At status quo, the pension of servicemen is definitely just – its amount is equal to their last salary and adjusted whenever their counterparts in active service get salary increases. These pensions are sustainable since they are funded via the annual General Appropriations Act.

Unjust is the pension scheme of the Social Security System which awards an average of only P3,540 monthly retirement pension.

If PNoy did speak the truth – as some nonetheless believed – we pensioners could be in for a lot of trouble. We can start bidding goodbye to any hope that general revenues would be used to increase our social pensions of P500 and meager SSS pensions.

In fact, taxpayers now pay for the pensions of uniformed personnel through general taxes on a pay-as-you-go basis. PNoy must have been told and made to believe that the one and only better way to do this is to gradually accumulate or immediately raise those trillions of pesos years before they are needed under a fully funded scheme.

Why must we do this? Indeed, there are many justifications for a fully funded scheme, but one of the consequential responsibilities is investing them in safe and high-yielding assets. Difficult, but others consider this responsibility a profitable undertaking.

But it is risky.

Like the huge reserve funds of SSS, the Government Service Insurance System and PhilHealth that now total at least P1.5 trillion, the Uniformed Personnel Pension reserve funds could only be invested controversially. Lucky would we be if they would not suffer the same dismal financial fate of the controversial Retirement and Separation Benefits System of the military.

And how would we raise these trillions of pesos? Henceforth, the General Appropriations Act must set aside annually enough funds to pay the current pension obligations and build up those trillions of pesos of reserves.

In the process, other social and infrastructure projects of government would have to give way to this build up of reserve funds. Those projects would no longer be funded.

PNoy publicly expressed his gratitude to his bosom friends and loyal supporters who have faithfully served him personally at Malacanang Palace and at home. Thus, PNoy did speak the truth.

But we wanted to hear instead the true state of the nation in important issues.

We somehow recovered some of our senses when he declared that “our countrymen are confident in the stability of their future” that “even newly hired employees today can make regular payments on cars or condominium units.”

How we wished that he were speaking the truth and not only dreaming optimistically of a far remote future!

Granting it were true, these  newly hired employees would instantly turn their optimism into pessimism if and when they realize that an almost-worthless SSS pension awaits them at old age.

COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by The Standard. Comments are views by thestandard.ph readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of thestandard.ph. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with The Standard editorial standards, The Standard may not be held liable for any false information posted by readers in this comments section.