Worth in dollars

The drafters of the Social Security Law cannot be faulted for not having laid down a comprehensive national policy to guide the Social Security System. This they did when they declared into Republic Act No. 1161 on June 18, 1954 that -

“It is …the policy of the Republic of the Philippines to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of unemployment, disability, sickness, old age and death.”

Subsequently, this national policy declaration was improved to clearly define that what we must have is “a sound and viable tax-exempt social security system.”

But if we think that this policy was permanent or would last long, we are mistaken.

It was amended and diluted even before SSS could open up on September 1, 1957 to collect its first peso of contribution. Republic Act 1792 that was passed on June 21, 1957 deleted unemployment among these hazards.

Eventually, though, maternity was added, leaving out unemployment and family allowance as the only unimplemented among the nine internationally recognized social security programs.

The 1957 amendments also provided explicitly that “to carry out the purposes of this Act, the Social Security System …is hereby created.”

But SSS never became the sole institution in charge of the country’s social security program.

As it turned out, SSS evolved into limiting its coverage to those working in the private sector while the Government Service Insurance System - established 20 years earlier - continued to take care of those in the public sector.

Yet, the original 1954 legislation meant SSS to expand its scope of coverage by providing that “any individual in the employ of the Government, or of any of its political subdivisions, branches, or instrumentalities, including corporations owned or controlled by the Government, as well as any individual employed by a private entity not subject to compulsory membership under this Act may join the System … Any other individual may likewise join the System.” 

At the least, SSS could have been the exclusive administrator of all nine branches of social security for those working in the private sector.

But as things turned out, SSS ended up as implementor only of maternity, disability, sickness, old age and death, preferring to focus in lending loans to members.

SSS administers the workmen’s compensation program but its policy-making and oversight functions are being done by the Employees’ Compensation Commission with the labor secretary as chairman. The medical care program—first administered by SSS for the private sector—has become completely independent and is now administered by PhilHealth under its own board chaired by the health secretary.

A de facto family allowance program for poor families is now being implemented by the welfare department under a conditional cash transfer program. With no legislative mandate, it is funded annually by Congress on an ad hoc basis.

Has SSS failed to carry out its full legal mandate?

We note that the Social Security Law does not specify that SSS shall be the only institution that will implement the nation’s social security programs.

Neither does it mandate that GSIS would be absorbed eventually by SSS.

Unmindful of this legal mandate, SSS developed during the time of Administrator Renato Valencia statements of vision and mission which still guide SSS to this day.

These statements, unfortunately, tended to set aside the statutory declaration of policy. Instead, they committed SSS into becoming “a viable social security institution providing universal and equitable social protection through world-class service.”

What these statements want SSS to become is a difficult balancing act.

To be equitable, SSS must continue to collect P110 of contributions monthly from poor members. For it to be viable, it must pay out a monthly pension of P1,200 only.

This would guarantee maybe that its reserves would last for a hundred years, but it would definitely make SSS a useless social security institution.

Is SSS able to deliver world-class service?

Maybe, SSS is delivering fast and efficient service by employing the latest in technology and processes that are certified as international operating standards. Its offices are decentralized and located inside shopping malls, and perhaps they are easily accessible.

But at retirement, the amount of pension is the one that really matters. There is little joy receiving meager pensions via the banking system’s automated tellering machines if they could only buy basic necessities such as rice and fish that last only for a few days.

Can they buy pensioners a kilo of NFA rice daily for a month? That minimum pension of P1,200 can’t. 

It is thus time that SSS dropped its delusion of providing world-class social security service because millions of Filipinos know what it is. Having worked across the world from Asia, Europe, Arabia and America, they know that SSS is miles away from achieving it.

Even if they contributed only a few pesos, they can easily convert at today’s prevailing exchange rate the average SSS retirement pension of P3,540 to $76.71 and belittle it.

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