By Chemrock

Of all the economic planning that the government undertakes, policy decisions regarding SSS payout hike are actually the easiest. The simple reason being they are based on actuarial sciences. The actuary works on certain assumptions like life expectancy, demographics, interest rate, inflation rate, when a person retires, etc etc. Re-calibrate anyway we want, the outcomes are empirical, in other words, statistically proven.

Actuarial accounting is very complicated as it goes into computation of future liabilities worked in present day values, stuff like like that. I shall discuss it here in simple lay language.


SSS in a nutshell:

The SSS is simply your savings computed in a manner that if you contribute ‘x’ pesos per month, you will receive ‘y’ pesos monthly after you retire, till death. The ‘y’ that you receive is dependent on 3 things —

(a) The ‘x’ that you put in. It should be apparent that you cannot expect other members to contribute to your ‘x’. You want more when you retire, pay up more ‘x’ when you are working. After retirement, if the retirees are lucky enough and the government increases their ‘y’, you are actually taking the extra ‘y’ from other members’ ‘x’.

(b) Earnings from your ‘x’. All members’ contributions go into an Investment Reserve Fund (IRF). This is managed by SSS and income from this fund is used to pay the operating cost of SSS (including the huge compensation SSS board members pay themselves) and interest to members. Your ‘x’ earns interest which is capitalized and goes into the IRF.  Because the investment earnings are volatile, SSS has to work on some fixed factor, that is why they have a guaranteed interest rate that your ‘x’ earns.

(c) How long you live. When a member retires, his/her monthly ‘y’ comes from the funds in the IRF. Based on the ‘x’ and the guaranteed rate, the actuary computes that by the time the retiree dies, the total ‘x’ plus interest LESS total ‘y’ = 0. So all SSS members are actually taking back all their savings (plus interest), that’s all there is to it.

For the math to work out, the actuary has to know how long a member can live. This is of course impossible, so they base it on historical averages. The life expectancy in the Philippines is 69 for males and 75 for females. I don’t know what numbers the SSS actuary uses but it should be close to 69/75. If a retiree lives shorter than the expected age, the balance of unpaid ‘x’ + interest goes to beneficiaries. If a retiree lives longer than 69/75 years, then SSS loses because they need to pay out more ‘y’ than what was contributed. Statistically the SSS can compute such situations and ensures sufficient IRF to meet these excess liabilities.


Status of SSS:

I could not download the SSS annual report, so I’ll just look at figures that Pnoy used in 2015.

a. Active contributors — 31,000,000,000 +
b. Retirees receiving monthly payouts — 2,000,000 +
c. Total additional payout per year if every recipient gets a 2,000 peso hike — 56b pesos per year.
d. Annual investment income from the IRF — 30b to 40b pesos (assumed gross)
e. Shortfall expected — 16b to 26b each year.
f. Fund expected to last till — about 2029.

The actuarial model relies on various assumptions as explained above. It’s a balancing act. You cannot expect everything to remain intact if one factor alone is changed. If the payout hike is allowed, the expected shortfall (e) means SSS will be taking out more than putting into the IRF which will deplete the funds gradually, this is what we have been told.

The annual investment income (d) is used to pay operating expenses,  other deductions like transfers to reserves, other contingencies, or some adjustment account and most importantly, the interest to members funds which are then capitalized into the IRF. If my interpretation of the figures are correct, there is really very little left in NET investment income. So I don’t really understand what (e) is, except maybe using it as just a simplistic way to explain things to folks.


Actuarial Life of the fund :

I’m also not sure what (f) is although media and everyone mentions SSS will be bankrupt by 2029. The data was computed in 2015 and they said the fund will be bankrupted in 14 years. I assume the 14 years is derived from an actuarial computation and it can only refer to the Actuarial Life of the fund. This ’14 years’ can be interpreted in 2 ways :

1. To borrow an accounting term, on a realization basis, if the fund were to stop now, and every member collects their monthly ‘y’ as if they were all retired, the cash will all be gone in 14 years time.

2. If we want the fund to be sustainable, to continue on, then what this actuarial life of 14 years means is that, if the retirement age is 60, pensioners can receive monthly payouts up to age 74 only.

Either way, members are short-changed in (1) and (2) above. To have a better perspective, since the fund started in 1935 all the way to 1980s, the Actuarial Life was to perpetuity. After 4 increases in premiums against 22 increases in payouts over the years, the Actuarial Life has decreased to 31 years presently.  The lowest was during Estrada’s admin when it slipped to 16 years — a real-life illustration that populism and irresponsibility in governance are often companions.

What if we just listen to the proponents of the bill to hike the 2,000 peso payout and continue with the fund and pay retirees till death, that is, disregard what the experts tell us. Will the fund go bankrupt in 2029? The answer is an emphatic NO. Am I contradicting myself? Absolutely not. I will even go further to say this — even if we were to increase the payout hike astronomically such as to cause the actuarial life to drop to 1 year, the fund will not go bankrupt next year. This is simple math, but needs some explaining.

The SSS manages an extremely huge fund. I googled and found a number US$8b in 2006. I have no idea what it is today but it has to be huge. New collections and members’ interest earnings add to the fund whilst payouts to retirees reduce the funds. Should the 2,000 peso hike be effected, the huge pool of funds is sufficient to meet these payments. As SSS is paying the 2m retirees, the 31m will still be putting money in. Come 2029 there will still be a substantial pool of funds. But this pool of funds will no longer be sufficient to pay other members who will retire in due time. The fund is not sustainable because it has been using Peter’s money to pay Paul. There won’t be enough left to pay all the Peter’s who retire in due time. Yes, it is a Ponzi scheme, but as to when it will collapse, not even the SSS will know. Not 2029, but collapse it will.

With a life expectancy of 69/75, having an actuarial life of 14 years seems recklessly risky. What is the optimum, or some standards that actuaries adopt? I don’t know.


Why those in favor of SSS payout hike were wrong:

The arguments against Pnoy were :

1. Increase contributions – Increase SSS rates so the IRF will grow.
This goes against the core of a retirement fund. Your ‘x’ is meant for your own ‘y’. You cannot get your ‘y’ from another member’s ‘x’.  If contributing members pay more ‘x’, they expect their own retirement plans will increase their ‘y’ accordingly. If the SSS retirement plans do not measure up to private insurers’ plans, SSS may collapse due to membership desertion to competitive insurers. There cannot be 31 million suckers.

2. Improve collections – Go after workers who are not contributing to SSS
Whilst it is true that improved collection will go towards increasing the IRF, the increased funds cannot be used to foot the increased payout to 2 million+ retirees. It is wrong for the same reason in (1) above – a contributor’s ‘x’ is for his own future ‘y’. Any payment arrangement that relies on the contributions of new members to pay old members is a pyramid or ponzi scheme, which is illegal. Ordinary Filipinos may not see through this, but it’s amazing that a lawman in Congress proposed this.

3. Govt funding – the govt can simply top up the difference
Many have suggested that the shortfall (f) can simply be funded out of the govt budget, in other words, tax-payers will foot the bill.  I believe it is not just (f) but the full 56b pesos that need to be covered. It is lost on proponents that this is unacceptable as it will mean socializing a cost in an inequitable manner. SSS members are employees in private enterprises, public employees are covered by their own pension funds. Why should everyone pay for a special segment of retirees?

Do proponents actually know what they are talking about? The govt top up will not only be for the 2 million plus retirees, but eventually the 31 million when they retire. Try computing the contingent social cost involved.

4. SSS can overcome shortfall
Angry proponents point out the fact that there have been increases in payouts so many times in the past and SSS had resisted and pointed to a bankruptcy deadline, but they have managed and there is no bankruptcy. The misunderstanding here, I think, is that actuarial life has not been explained properly. The 22 increases in payouts in the past have caused the actuarial life to plummet to the current 31 years. Do we want to bring it down to the dangerous level of 14 years?

5. Increases in collections from (1) and (2) and actuarial life
(1) and (2) as mentioned above are not acceptable. The collections will go to increase the IRF. When the premium goes up, of course the benefits are adjusted. So there will be no change in the actuarial life. The possibility for improvements in the actuarial life will be if the premium increase is onerous, that is, not accompanied by adjustment in the benefits. Would you contribute to such a scheme?


Is Aquino anti-poor, heartless? :

14 Jan 2016 Pnoy vetoed the bill for SSS payout hike and probably incurred the wrath of more than half the population of Filipinos. The SSS payout hike is one of those situations where even the best of intentions need to be restrained in light of known unacceptable outcomes. This was the reason Pnoy vetoed the proposal by Congress. It shows the real strength of a President who rightly prioritized national interest above personal and party interests. In his last few months in office, he could have passed the bill and vacated office with more blessings from his countrymen. Instead, he made a stand knowing full well the damage it will cause his party mates in the coming election.

Against the trend of populists lambasting Pnoy, two persons stood up to support the president’s veto knowing full well that by doing so, they had the most to lose in the coming elections. Mar Roxs and Leni Robredo showed the whole nation what it means to put national interest above self interest.


Hall of shame:

The payout hike was an election promise by Duterte, but he has recently been convinced by Secretaries Dominguez, Pernia and Diokno to reluctantly change his mind. This is good, it shows the president can be persuaded if the arguments are convincing.  In the face of cold data, President Duterte has made the same strong stand as Pnoy in rejecting the SSS payhike. I will therefore not consign the president to the Hall of Shame.

sss-shamersMany proponents of the payout hike care less whether SSS will be in jeopardy or whether retirees get any additional money.  It is simply politics and the unsavory ones will just use whatever ammunition they can. To them we ask, what now? President Duterte has made a tough and right decision, what say you now? Silence means sycophancy. To those who push personal interest over national, there should be a place reserved for them.

Here are some of the game-players:

Senator Cayetano

“For the sake of our struggling people, I will do everything in my power to counter this veto. It is an uphill battle but a fight that must be waged nonetheless. We owe it to the people especially the vulnerable such as the elderly, the sick and the unemployed who are at the bottom barrel. Sobra-sobra na ang hirap nila,” .
Philstar…15 Jan 2016

Sen. Ferdinand “Bongbong” Marcos Jr.
“….  the next president should implement a P1,000 minimum increase in pension of all Social Security Security (SSS) retirees in the first month of his or her presidency.”
Tribune.net.ph….28 Mar 2016

Rep. Fernando Hicap of Anakpawis
“…. The veto on the SSS pension hike is symptomatic of Aquino’s anti-people governance. He ruled against the interest and welfare of the workers, farmers, urban poor, government employees, calamity victims, youth-students, even sending government forces to their deaths. Now, he is heartlessly spoiling the pension hike for the elderly section of our population,”
Manilastandard.net….2 Feb 2016

Rep Martin Romualdez
“We can weather the storm and win an uphill battle especially if our cause is about championing people’s interests as a show of malasakit to their welfare. All we need is to show a strong political will with our sincere desire to serve public interest,”
Journal.com.ph…22 Jan 2016

Senator Chiz Escudero
“There is no better time than now to have the SSS pension hike bill enacted into law, and I urge my colleagues in the Senate and members of the House of Representatives to do the right thing and vote to override the President’s ill-advised veto of this bill,”
Enquirer….14 Jan 2016

Senator Grace Poe
“I dare SSS to provide concrete alternatives because I think it has sufficient funds to increase the members’ benefits.
Inquirer.net….14 Jan 2016

Senator Cynthia Villa
“We don’t believe (that the SSS cannot afford the hike) that that’s why we are saddened. In behalf of our pensioners, they can expect that we will try again next Congress to pass this into law…It remains my position that the additional P2,000 can be given without putting the stability of the SSS fund in jeopardy,”
Inquirer.net….14 Jan 2016.

Rep Neri Colmenares
“Walang puso ba talaga si Pres.Aquino? This is patently anti-pensioner, anti-poor and anti-worker! The P2,000 hike is very reasonable and is badly needed by pensioners and their dependents,” said Colmenares, one of the authors of the proposed pension increase.
Politics.com.ph….5 Jan 2016

57 Reps of 16th Congress
This bunch tried an underhand act to hijack a Congress session Feb 2016 to override Pnoy’s veto of the SSS hike. They created a circus by bringing in a group of old folks to heckle the proceedings.
1. Rep. Ronaldo B. Zamora (San Juan, Lone District)
2. Rep. Thelma Z. Almario (Davao Oriental, 2nd District)
3. Rep. Roman T. Romulo (Pasig, Lone District)
4. Rep. Silvestre H. Bello III (1BAP)
5. Rep. Jose L. Atienza Jr. (Buhay)
6. Rep. Ana Cristina Siquian Go (Isabela, 2nd District)
7. Rep. Samuel D. Pagdilao (ACT-CIS)
8. Rep. Martin Romualdez (Leyte,1st District)
9. Rep. Evelina G. Escudero (Sorsogon, 1st District)
10. Rep. Juan Johnny R. Revilla (OFW)
11. Rep. Irwin C. Tieng (Buhay)
12. Rep. Nicanor M. Briones (Agap)
13. Rep. Luzviminda C. Ilagan (Gabriela)
14. Rep. Carlos Isagani T. Zarate (Bayan Muna)
15. Rep. Antonio L. Tinio (ACT Teachers)
16. Rep. Terry L. Ridon (Kabataan)
17. Rep. Fernando L. Hicap (Anakpawis)
18. Rep. Emmi de Jesus (Gabriela)
19. Rep. Neri Colmenares (Bayan Muna)
20. Rep. Jonathan dela Cruz (ABAKADA)
21. Rep. Enrique T. Garcia Jr. (Bataan, 2nd District)
22. Rep. Sherwin Gatchalian (Valenzuela City, 1st District)
23. Rep. Angelina L. Tan (Quezon, 4th District)
24. Rep. Napoleon S. Dy (Isabela, 3rd District)
25. Rep. Mark M. Enverga (Quezon, 1st District)
26. Rep. Florencio T. Flores Jr. (Bukidnon, 2nd District)
27. Rep. Isidro S. Rodriguez (Rizal, 2nd District)
28. Rep. Rose Marie J. Arenas (Pangasinan, 3rd District)
29. Rep. Mercedes C. Cagas (Davao del Sur, 1st District)
30. Rep. Aleta C. Suarez (Quezon, 3rd District)
31. Rep. Leah S. Paquiz (ANG NARS)
32. Rep. Bellaflor J. Angara-Castillo (Aurora, Lone District)
33. Rep. Victor J. Yu (Zamboanga Del Sur, 1st District)
34. Rep. Lilia Macrohon-Nuno (Zamboanga City, 2nd District)
35. Rep. Mar-Len Abigail S. Binay (Makati City, 2nd District)
36. Rep. Susan A. Yap (Tarlac, 2nd District)37. Rep. Gus S. Tambunting (Paranaque City, 2nd District)
38. Rep. Giorgidi B. Aggabao (Isabela, 4th District)
39. Rep. Pryde Henry A. Teves (Negros Oriental 3rd District)
40. Rep. Harlin C. Abayon (Northern Samar, 1st District)|
41. Rep. Jeffrey D. Khonghun (Zambales, 1st District)
42. Rep. Joseph Stephen S. Paduano (ABANG LINGKOD)
43. Rep. Amado S. Bagatsing (Manila, 5th District)
44. Rep. Diosdado Macapagal Arroyo (Camarines Sur, 2nd District)
45. Rep. Rodolfo G. Biazon (Muntinlupa, Lone District)
46. Rep. Arnel U. Ty (LPGMA)
47. Rep. Agapito H. Guanlao (Butil)
48. Rep. Edgardo R. Masongsong (1-CARE)
49. Rep. Rogelio Neil Pepito Roque (Bukidnon, 4th District)
50. Rep. Celso L. Lobregat (Zamboanga City, 1st District)
51. Rep. Noel L. Villanueva (Tarlac, 3rd District)
52. Rep. Aurora E. Cerilles (Zamboanga Del Sur, 2nd District)
53. Rep. Jose T. Panganiban Jr. (ANAC-IP)
54. Rep. Pedro B. Acharon Jr. (South Cotabato, 1st District)
55. Rep. Ferdinand L. Hernandez (South Cotabato, 2nd District)
56. Rep. Manuel M. Iway (Negros Oriental, 1st District)
57. Rep. George P. Arnaiz (Negros Oriental, 2nd District)
ABS-CBN….4 Feb 2016

CBCP  Bishop Broderick Pabillo
“…. this action of PNoy only shows his lack of empathy for ordinary Filipinos. By vetoing the bill for increase of pension of SSS members, PNoy has clearly shown that his program of ‘inclusive growth’ is mere rhetoric. Do we vote those who will continue this anti-poor policy?”
Wheninmanila.com…16 Jan 2016

Blessed Association of Retired Persons (BARP)
…. marched with militant groups on January 28 down Session Road to the SSS regional office calling on congress and senateto override President Benigno Aquino III’s veto of the additional Php2,000 to SSS pension as part of nationally coordinated action of pensioners.
Nordis.net….31 Jan 2016

Feel free to submit your own nomination.

133 Responses to “HALL OF SHAME – SSS PAYOUT HIKE”
  1. andrewlim8 says:


    And that is why they throw facts, numbers, reason, logic out the window. For populists, heartlessness is the main thing, while all they can offer is mindlessness. 🙂

    In the US, the hillbilly who lost his job to automation and industry transfer to low wage countries voted in Trump, never mind if he does not follow through on his campaign promises, starts a world war, destroys the economy, profits personally from his position, turns intelligence findings into matters of faith.

    In this country, the populist supporter does not care if the house burns down.

    • Monching says:

      I did not vote for Trump but fair is fair. He has not been in office yet so where did the “does not follow through with his campaign promises” come from. Has he really destroyed the economy, already?

  2. karlgarcia says:

    I could no longer say “chem, you rock”, because you changed your name to chemrock.

  3. karlgarcia says:

    Last year we were discussing endo, as one of the reasons for the collection shortfall.
    The 31 million active members mean 31 million below retirement age, but how many have permanent jobs?

    • sonny says:

      Neph, this is just saying on the fly: Maybe we can use the baseline stats compiled by i7sharp on barangays, municipalities, cities, provinces, regions. This is with certain provisos on links from him.

      • i7sharp says:


        Please feel free to use any stuff I have posted anywhere related to the barangays, etc.
        I am more than willing to help get the latest data for you – time permitting.
        Please let me know which kind of data interests you most.


        • sonny says:

          At your convenience, i7sharp:
          total population of all 145 cities of the Philippines
          total income of all 145 cities
          total population of all non-city towns
          total income of all non-city towns

          Thank you.

          • i7sharp says:


            In the Mulanay site, there is a link,
            – NSCB (data)
            that takes you to data I compiled, just over six years ago, for the province of Quezon.
            I think I did this for all 81 provinces.
            This is closest to what I have done and I believe you need – though income figures are not included.
            I am puzzled why I had time to do all that and am not sure when I can again do something similar.

            In the meantime, why not visit
            and check what they have avbl
            and fill up this form?:

            Please let me know how and when I can help farther.


            • i7sharp,

              Just to piggy-back on your barangay as diversification idea (along with this small batch manufacturing idea gaining popularity over here),

              Are there statistics on which barangays have OFWs, if so, do they break it down by work or profession, ie. servants, cooks, to engineers and nurses? Can they also track contractual type work (outside work, but without citizenship) vs. those who actually immigrated and became citizens of adopted countries?

              I remember talking to few Navy Master Chiefs who joined the US Navy in the Philippines, talking about how many of them essentially came from the same towns or regions; if I’m not mistaken OFWs are also recruited similarly from the same towns, etc.

              To continue with this small batch manufacturing idea, why not track all these Filipinos who’ve lived outside the Philippines (whether contractually or permanently), say if you have a bunch of Filipinos from this town all went to Israel, maybe they can manufacture Israeli specific products, or Israeli specific services, ie. hotels/restaurants, etc.

              Encourage barangay councils to reserve seats as advisors or officials, to those living and working in foreign countries. Reach out to folks like sonny and jp, Ireneo, etc. use Skype have them contribute to decisions in the barangay,

              Do you know of any barangays doing this right now, i7sharp, who are actively leveraging their neighbors living outside the Philippines, whether temporally or as citizens of other countries? Not just squeezing them for their cash, but actively incorporating their input, lessons learned from the countries and cultures they lived in.

              Each barangay has to play their instrument as virtuosos , if many of them are ex-US Navy retired, then maybe they can reach out to US military working there, visiting forces, etc. etc. the barangays focus on their specialties, while the national gov’t plays the orchestra, thats all the ASEAN stuff, int’l trade, etc.

              But each barangay must be self-sustaining , none of this palm oil crap, or precious metal mining, too dependent on fads, wherein the product becomes unpopular everything comes apart. Focus on the strengths of the barangay and its people.

              For example, you guys have really good blacksmiths over there, perfect for custom, artisanal , personal manufacturing stuff for the int’l market.

              • i7sharp says:


                Thank you for your excellent input.

                I would like to embed a picture of artisans in my hometown (from of old) but I still have not figured out how to. Can you give me some pointers?

                Meanwhile, please (I am not doing this deliberately knowing what you feel so far about the links I share) try to visit this Mondragon, Northern Samar site
                and this simple RP-Spain site,
                where you can see link that reads
                – Jobs (POEA)
                It does not quite answer your question about OFWs but I think it helps.
                In the site, I noticed just now that about ten years ago I posted something about OFWs in Spain.

                You probably will not notice it right away but I think I have found a kind of connection between the Mondragons of the two countries.


  4. Vicara says:

    If only Duterte and his social media/PR machine would make use of his still-substantial popularity to explain the astute reasoning by prudent Cabinet ministers like Dominguez and Pernia. This is an opportunity to educate Filipinos on fiscal policy; raising citizens’ awareness on sound economic practices could be one of the positive, lasting legacies of this administration.

    The problem is that Duterte became president by relying on a PR machine, allegedly funded by the Marcoses and GMA, that remains fixated on conspiracy plots and the demonizing of Leni. International political technologists with well-oiled communication machines are hired primarily to coldly secure victories and perpetuate power for any client in any country. They focus only on the immediate zero-sum game–usually an election win. That’s how they earn their huge paychecks. Combine this with the ningas-cogon political culture of the Philippines, and you have nothing but empty political braying and maneuvering. Until the next election, that is, for which there will be new client-candidates to serve and new social media technologies to deploy.

    I’ve long seen Duterte as a man driven by his demons, projecting his dark psychodrama onto an entire nation. But buried in all that is the small, persistent flame of the desire to do good. (Otherwise, what would be the point of the pyschodrama? This is what made the catechism of his childhood era so exciting.) But one can’t rely on hired PR guns to bring any selfless do-gooding to the fore. They helped him win by creating a clever social media a simulacrum of Duterte that was authentic enough to last through the first year of his administration; but they have no clue as to how to govern, or to how to support him in governing well, particularly with long-term goals that would require prudence, frugality and clear thinking on the part of both government and the citizenry.

    If anything, 2016 has proven that anyone or his dog can win an election, anywhere in the world.

    Now comes the hard part.

    • Aida says:

      Hall of shame, very appropriate title,

    • karlgarcia says:

      Candidate Duterte is Different from President Duterte.😳

      • But both are strikingly similar to Mr. USA. 🙂 Meryl Streep, at the Golden Globe Awards last night, uttered these memorable words which ties in to the “entitled as role models, teachers and change agents” thread from yesterday:

        “And this instinct to humiliate, when it’s modeled by someone in the public platform, by someone powerful, it filters down into everybody’s life, because it kinda gives permission for other people to do the same thing. Disrespect invites disrespect, violence incites violence. And when the powerful use their position to bully others we all lose. ”

        • i7sharp says:


          What do you think of this?:

          Meryl Streep’s anti-Trump rant leads to Golden Globes most …
          BizPac Review-18 hours ago

          Just moments after her rant, Conservative commentator and radio host Larry Elder refuted Streep with the facts on Trump’s alleged “mocking,” …

          But, back to the home country …
          I can think of Trump being interested in barangays.
          Do you think Meryl Streep would be?


          • Ahhhhh…. Are you a fan of Larry Elder? He often rants about “Hollywood Liberal Bias.” I read his rebuttal and did not buy it. LCPL espouses the same libertarian with a small “l” view so you might want to discuss this further with him.

            • i7sharp says:

              Which part of Larry’s rebuttal did you not buy?

            • I’m a Ron Paul libertarian, Juana. I ‘ve seen Larry Elder on FOX News, and I’ve listened to his radio show, but I’m not a big fan of him, personally he reminds of a conservative Travis Smiley… not quite the philosophical juggernaut, pales in comparison to the likes of Ron Paul.

              As such I completely disagree with his defense of Trump.

              Hell yeah Trump was making fun of https://en.wikipedia.org/wiki/Serge_F._Kovaleski , a bad move on Trump’s part I’m sure; but Streep (I love her as an actress and I actually watched her speech when I saw the Golden Globes last night, beautiful speech by the way) and Hollywood in general are wrong also in further victimizing Kovaleski, this guy’s a seasoned investigative reporter, not some Shriners’ kid… he’s a big boy and I’m sure he’s already at work trying to oust Trump, and such is politics.

              But make no mistake Trump is an ahole… same as Putin, same as DU30. Traditionally, politicians and thought leaders felt they had to hide the fact that they’re aholes, to coochy-koo the public i suppose. You don’t rise to that level as a nice guy, or a moral one at that… yeah, sure there’s folks like Gandhi and Mother Theresa, but these thought leaders are the exceptions, not norm. MLK jr. was a womanizer, so was Bill Clinton. Name a person at the top, and 90% (if you expanded internationality, i’d go 98% 😉 ) of the time they’ll be aholes, and got there because, and not in spite of, being one.

              Two things, a vindictive personality and the ability to remember, long memories, the difference with Trump IMHO is he only has one part, he tends not to remember … which is very peculiar, because as you’ve noticed i’m sure, his vindictiveness happens in real time, most of these ahole leaders will place these memories in the backburner of their devious minds, and when the right time presents itself will strike… Trump is different (I’m not saying it’s good or bad, or whether this will eventually bring him down, or whether this will make him a better leader, i dunno).

              But comparatively, his vindictiveness is short-lived, or happens in real time. DU30 seems to me on par with all others, vindictive with long memory (ps. I’m not saying these are the only traits involved, but these two I tend to focus on , for my own attempts to read people 😉 and Trump’s an aberration)

              But yeah, in conclusion, Trump was definitely making fun of the disabled reporter. That’s crystal clear.

              • i7sharp says:

                But yeah, in conclusion, Trump was definitely making fun of the disabled reporter. That’s crystal clear.


                Do you have a crystal clear idea of what Juana did not buy?


              • I’m sure the whole thing, i7sharp. If one doesn’t intend to buy the used car, no need to debate engine and transmission, no less the leather and trimmings, right?

              • @ i7sharp

                I did not buy his article in Catholics 4 Trump, complete with videos in defense of Trump. Go to Twitter and Reddit and you’ll see what people are saying about Larry and his defense. If you want “biased” and “pro-Trump” arguments, look for Breitbart’s , Hannity’s and Coulter’s version. I am pretty sure Malkin is doing the “infinite monkey theorem” in defense of Trump as we speak.

              • i7sharp says:


                I did not buy his [Larry’s] article in Catholics 4 Trump,

                Juana, can you please provide the URL to that article?


    • edgar lores says:

      Vicara, That “small, persistent flame of the desire to do good” may indeed exist.

      But it is hard to see as it is overwhelmed by (a) the impulse to murder and the disregard for life and human rights; (b) the malice towards Senator De Lima; (c) the discourtesies toward Vice President Robredo: (d) the disrespect toward Obama, the UN, and the EU; (e) the support of corruption (the Marcoses, the BI Chief, the pork barrel); (f) the backtracking on policy pronouncements; (g) the absence of consistent candor; (h) the use of planted and manufactured evidence; (i) the cussing; (j) the unintelligible mutterings; and (k) yes, the dress downs.

      • Vicara says:

        Candidacy is different from incumbency. Unfortunately, still the same guy, Karl. 🙂

      • Vicara says:

        Edgar, indeed. Practically invisible. Overshadowed by his fentanyl-fueled sound and fury. Which signifies nothing much, other than his animal self-loathing and fear projected onto “drug addicts”, and amplified by the social media machine.

        Remember, the one condition that he placed on his PR/social media consultants was that they were forbidden from making him say or appear to do anything that was not “natural” to him. Because it had to seem believable. So the sound and fury, as well as close to 7,000 EJKs, have painted him–and his entire administration–into an image corner. The claims made regarding his administration’s accomplishments are by default shallow and off-kilter, because he was sold as a candidate on the basis of being “anti-yellow”and the exact opposite of Roxas, and of being a tough guy who would not hesitate to kill to get the job done. To deviate from that formula would dissipate his power in his supporters’ heads. And as time wears on, all that he will have to fall back on are those very same supporters who plugged into his visceral, dog-eat-dog, Tatay-will-take-care-of-everything view of the world.

    • “But buried in all that is the small, persistent flame of the desire to do good. “


      Awesome post! Especially that line above. I feel the same, and segues perfectly from me and edgar’s debate on the other thread.

      I’m a big fan of the Yin and Yang symbol, ie. within the deepest part of the black, is white.

      “One man’s terrorist; is another man’s freedom fighter”—— if you focus too much on the terrorist label, you’ll invariably fail to see him as a freedom fighter (ie. the morality that others see in him), you then fail to account for the complete picture, like fighting someone with one hand tied behind your back.

      Account for the full , complete picture, always… There are no absolutes.

      • karlgarcia says:

        So thou hast never condemned? Havoc, thee! 😜

      • NHerrera says:


        You just gave me a deeper nuance to the Yin-Yang thing. Thanks for the picture.

        And that there are no absolutes seems like a truism. How about near-absolutes?

        • edgar lores says:

          If the statement “There are no absolutes” is true… then it is false.

          • NHerrera says:


            Hahaha. Yes, indeed. The statement

            there are no absolutes

            is of course patently false, if one can cite at least ONE case the statement does not hold. One is: the wife is absolutely pregnant or absolutely not pregnant.

            In other domain, such as the bases or reasons for political decision or action, the statement may be hold generally, in the sense of completeness, purity, or perfection.

            • EXACTLY, NHerrera!!!

              There is no point ascribing to immorality (or for that matter, Evil!) that which can be explained by hubris, incompetence, and the Dunning-Kruger effect. Essentially, and the point here, don’t pigeon hole yourself to just one aspect of truth. 😉

              • NH,

                The main use of non-absolutism IMHO is in science, ie. had great and not-so-great scientists simply touted the consensus, we’d still be performing human sacrifices and desecrating virgins, or worshipping the sun. So i’d argue that this is the essence of science, non-absolutism.

                But i’m no scientist, so the best example of the uses of non-absolutism in practical social matters is in criminal investigation and military counter-terrorism (-insurgency); very similar to the scientific process, wherein youre constantly testing various hypotheses… only you’re doing it with people and groups and networks (systems), so I guess

                it’s essentially social science, which Sherlock Holmes essentially made cool, waaay before Freud and Margaret Mead. I’m not sure if you’re a fan of the Sherlock Holmes books/short stories (if not catch the BBC series, starring Cumberbatch), he’s no cop or soldier or spy, though Sherlock’s brother is a spy, Watson is/was a soldier/doctor and Inspector Lestrade is a detective.

                Most religions would sneer at non-absolutism, and that’s what I’ve come across in my dealings ie. Muslims, Evangelicals, Mormons, etc. there are plenty cops/spies/soldiers who see the current wars as religious in undertone, hence they have tattoos of Crusader crosses, etc. this to me is akin to Absolutism, and serves only to hamper the work.

                Interestingly, there’s only one religion that expressly forbids Absolutism, and that’s Jainism,

            • josephivo says:

              First define pregnant. Egg and sperm meet? To what degree? Touch, half inside, full inside, chromosomes start meeting… errors will be made so 100% will not be achieved. Inside the women? First split of the egg? Still free traveling or at certain degree of implantation in the womb? By what pregnancy test? The foetus dead in the womb? Brain dead? During bird at what moment does it stop? A false pregnancy? As always in science, the fringes make the case interesting. The definition has to be extremely exact and commonly accepted for your statement to be through.

              • josephivo,

                I’m a big fan of “Woman didn’t know she was pregnant” stories. If you Google it , and keep up with said type of news, it’s amazing how regular it is. Then the weirder stories of “Woman gives birth to [type of animal]” , the latter is of course in the realm of fantasy , but I first got into Googling “Woman gives birth to goat” etc etc… from all the stories in the Philippines. I definitely agree re fringes.

  5. karlgarcia says:

    The 30 to 40 b investment income
    Will it always be this range for the next14 years?

    Assuming some of is based on lease rates and rental income, and the rest securities and stock market, I am sure there would be rental increases within the 14 years,but would that be enough to cover the 16 to 26 billion annual shortfall?

    Selling fixed assets are always suggested,but never that easy.
    In the end some one has to subsidize for someone, whether it is from lessees and rentees or the government ( meaning taxes), it is still a subsidy.

    Still,we do not know how much the fund is , so I defer to the budget secretary, who somewhat said that a campaign promise is different from the present, because the advice lacked a thorough study.

    Now,erase the math and the actuarial science for a second.

    The reason, i would give that go ahead increase the pension.
    Because 3000 pesos a month can not cover maintenance medication.
    Those paying for the increase will get the same increase or even more.

    That would be my reason, but is my reason good enough?

    • chemrock says:

      30b-40b is a huge range is’nt it? Pnoy data was just to be on the safe side. I don’t think the SSS itself would have a 14 year forecast.

      Would rental increases cover the 16-26b shortfall? The issue is not covering the shortfall, it’s maintaining a safe actuarial life.

      Selling fixed assets to pay pension increase? — That’s only in an insolvent situation. Selling assets decreases investment income.

      Thorough study — I’m sure both previous and incumbent admin have done a thorough study. It’s simply a political call. The maths do not support a hike decision.

      Your reason for saying No to the hike:
      – “Because 3000 pesos a month can not cover maintenance medication.” — Pretty obvious.
      – “Those paying for the increase will get the same increase or even more.” — That’s why I ask — try to figure out the total social cost of 2,000 pesos for 2m retirees and 31m retirees. It will bankrupt not just the SSS but the govt.

      Assistance for the needy can be covered by other social security safety nets.This whole idea of SSS hike was just a populist political ploy, mouthed by people who now quietly disappeared. That’s why we need to hang them up in the hall of shame. That’s the purpose of this blog.

  6. edgar lores says:

    1. Only members with 150 (?) monthly contributions are eligible for the pension. Members who have contributed less should have their contributions refunded. I don’t believe this is being done.

    2. The calculation of benefits should be done on an individual basis and not on actuarial tables (?).

    2.1. If truly “y + earnings – management overhead = x,” then there should be no problem with increasing the pension amount. A pensioner will only receive a pension until his x is exhausted and not necessarily until death.

    2.2. If his x is exhausted in his lifetime and he continues to receive a pension, then that amount is coming from someone else’s contribution. (As noted.)

    2.3. If a pensioner dies before his x is exhausted, the remainder should go to his estate. (As noted.)

    2.4. Actuarial tables will only be needed to calculate minimum-maximum pension amounts.

    2.4. This would mean that SSS is not a Ponzi scheme and that there is no danger of an institutional collapse.

    2.5. It might mean, however, that the government has to introduce and maintain an aged pension scheme, independent of SSS and GSIS, (and a universal basic income?).

    3. Offshore pensioners should be offered the choice of a lump sum option. About 7% is eaten by bank withdrawal fees, double that if one checks balances online at ATMs.

    • chemrock says:

      1. The eligibility details are in the website. I’m not quite sure of the 150 months – thought it’s 120 months. My guess there is no refund because it’s a minimum sum figure that has gone into the benefits of the social security coverage that has already been consumed. SSS is pension fund and some health insurance.

      2. This is a public scheme where benefits and rates are not personalised. The rate tables are on groupings categorised by non-discretionary bases like salaries, sex, age, number of kids,etc.

      2.1. There are a few variations to pension payments. I am assuming SSS pays till death, otherwise what’s the point. If you refer to payments till ‘x’ runs out, that’s an annuity.

      2.4. The ‘x’ and ‘y’ of those who retired were computed from actuarial tables. So based on age, assumed retirement age, assumed death age and fixed rate, the total ‘x’ (+ interest) Less ‘y’ = 0. So now we increase the ‘y’ to ‘y + y1’. Where will the ‘y1′ come from but from the pool of all members’ ‘x’. This is assuming as I have indicated, there is no huge pool of nett investment income. It is a p\Ponzi scheme when SSS is taking from contributions of Peter to pay Paul.

      2.5 Not quite sure of another separate aged pension scheme. UBI is an interesting concept, but not quite sure of pros and cons. Its a paradigm shift in thinking.

      • edgar lores says:

        Chemrock, thanks. That is the term I am looking for — annuity.

        As to what’s the point:

        o No Ponzi scheme
        o No miserable less-than-subsistence level pensions
        o Equitability
        o The contributor has a say as to how his contributions are invested
        o Transparency – the contributor knows how much he has in his pension
        o Etcetera

        Of course, as I said in 2.5, a true social security benefit scheme has to be put in place to support retirees who are not in SSS or GSIS, or whose SSS/GSIS funds have been exhausted.

        Consider SSS/GSIS as private, personal contributory annuities; there must be a public, government-sponsored non-contributory social security safety net.

  7. chemp,

    This stuff always makes my eyes glaze over, but because it comes from you I always feel compelled to read it, knowing there’s something to learnt (notice the t instead of the ‘ed, LOL!).

    It’s very similar to the Social Security debate here, and I know there are fixes the Republicans are trying to do, though this all flies over my head. I think (especially the Conservatives, and libertarians who want nothing from the gov’t to begin with) many Americans realize that like Obamacare there’s a Ponze scheme going on, that you don’t wanna be the last guy w/out a seat, in this game of musical chairs.

    One of the solutions , aside from 401K, IRA, all those private funds, were Annuities ,

    Can you speak on Annuities and if that’s a viable solution (or part of the solution) in the Philippines (also here in the US)? If the Ponzi schemes coming down, what other options are there for the poor masses, I know having children are a form of Social Security, but I mean investments, etc. can say teachers unions (and for that matter barangays) buy into their own funds and run it in the US, with better fiscal oversight, etc.?

    • karlgarcia says:

      Can we quote Patton, in the case of SSS, where a good solution is better than a perfect solution, whatever that may be?

      • Well, I’m no financial guy, karl. But from a security stand point, you’d want to be versed with as many weapons, tactics and individuals, terrain, and not rely on just one thing in chaos, so same same with diversification. There should not be just one solution on the table but many, what they call in the military redundancy. But I think libertarian sentiments would add too here, ie. don’t rely too much on others (especially your gov’t); Self-reliance.

        • karlgarcia says:

          ok Lance.

        • i7sharp says:

          “diversification” … and also “libertarians” … prompted me to jump in.

          I just want to take the opportunity to mention in passing that my favorite libertarian is Larry Elder, a radio talk show host from Southern California.
          “favorite” because I think he is really a very good. very nice (black, by the way) person.
          (I am an Independent, by the way – not a Republican nor a Democrat.)

          Lance, you were the first to mention of “barangay” in this blog article.
          To me, the 42,036 barangays are “diversification” in and of themselves.
          Each one (no matter how small) has its own history, uniqueness, resources, potentials, and what not.

          Having said that, let me quote this:
          This blog is a collaboration by people interested in the well-being of the Philippines.

          I joined the discussions here at the TSH because I believe that *that* is discussed here more … umm, enthusiastically (for one) … than in any other place I know.
          And regardless of what you (Lance) or others may think of me, I can say the well-being of the people back home is almost always foremost in mind. If only because I have many, many relatives there who are among the “needful” masses.
          (by the way, I am not into politics. I have never, nor intend to, run for public office.)

          Let me close with this thought (that relates more to the topic, SSS payout hike, etc.):
          A healthy barangay can tremendously help improve SSS payout.

          How can we have healthy (or healthier) barangays?
          Perhaps we should think outside the box or of these:
          1. Egg of Columbus – https://en.wikipedia.org/wiki/Egg_of_Columbus
          2. http://www.lifehack.org/articles/featured/11-ways-to-think-outside-the-box.html
          – 11 is too many for me; 7 is good enough (perfect) for me.


          • I think very highly of you, i7sharp!

            You are inter- & intra-dimensional, both figuratively and literally, if I could map your thoughts and somehow 3-D, or even 4-D, model it I would, you sir are thinking on a totally different plane!!!

            How you connect seemingly unrelatable ideas, baffles me.

            Those links I’d definitely click on, and no I had not heard about the egg of Columbus, similar I think to “Inception” (Nolan film) top spinning? And number 7 (outside the box) is my favorite, and try to live by it.

            Re barangays, I was talking more in terms of this idea, or similar such ideas:

            • karlgarcia says:

              In the movie version of the video game Assasin’s creed, Columbus kept an egg like object, which is called the apple of Eden.

          • “I joined the discussions here at the TSH because I believe that *that* is discussed here more … umm, enthusiastically (for one) … than in any other place I know.”

            LOL! I see what you did there…

            “– 11 is too many for me; 7 is good enough (perfect) for me.


            twice, no less! I had to read it a second time to catch it, LOL! 😉

          • re Mondragon , here’s a good video on small batch manufacturing in San Francisco:

            • i7sharp says:

              Excellent choice of a video to share, Lance!
              Seconds after I had started watching, I dreamt of doing the same thing in my home barangay … imagining relatives and friends busy at work, earning their livelihood.

              I already have a cap just like Mark Dwight’s
              (it says “Los Angeles Kings” though).
              I’m off to a good start?

              Within seconds of this
              you will see a red bag with a patch that reads almost like “i7”!
              And a few seconds after that … the “love” icon.
              My “7”! (If I may so put it that way.

              by the way, in another forum, I mentioned “Mondragon” to Sen. Rene Saguisag.
              His late wife was a Vice President or something at the
              Mondragon Corporation in the Philippines.
              I feel we will see some connection.

              “7D7” is my abbreviation for the word.
              “Seven-d-pito.”) 7 is pito in Tagalog
              … and in my home language, Capampangan.


  8. caliphman says:

    Whether or not social security should be entirely self-funding or that individual contributions together with its investment earnings should only benefit the contributing member and be the only source of his or her social security benefits are questionable premises. Social security systems by nature have the public purpose of providing a minimum retirement income to eligible and qualifying members. By necessity, there will be members who will have to pay more in social security contributions than they can be expected to get back in benefits. Its just the nature of the beast so that the level of benefits can be at a minimun needed for a retired person to survive and still as a whole have incoming payments be enough to provide scheduled benefits for retired members. In the US and other countries, the solvency of the system is problematical because of aging populations. To characterize social security systems whose solvency is looming as Ponzi schemes is to say nothing because the government accomplishes its public purpose by taxing those who can afford it to support members of the public who need help in order to survive in society. In the US, the social security system is orojected to become insolvement in 2033. This looming disaster will once again be averted by delaying retirement benefits and increasing social security payments.

    I would personally hesitate condemning those who favor increasing benefits and render the SSS less self-funding or those who support holding benefits frozen even if seriously inadequate because genetal taxes would have to be levied to fund the shortfall. Perhaps condemnation should be directed to those who adopt a position on this issue without fully considering the consequences and just the political advantage of what appearing to advocate such position confers on them. Unfortunately is not the bulk of Philippine politics afflicted with this seemingly perpetual malaise, populism being just one of its perennial manifestations.

    • chemrock says:

      We have covered this in the previous article by Bill.

      I think Bill explained the difference between a social security fund and a pension fund. To recap — social security is socialised cost. Tax payers fund it and the govt provides social security benefits like health benefits and others.

      Pension fund are member funded. Members (and their employers) contribute to the fund. SSS is a pension fund (although it takes the name Social Security System). If you are not a contributing member, you get nothing from it. The govt does not allocate any budget to fund it. It is simply private members’ fund managed by the govt under the SSS agency.

      SSS started off as a pension fund and over the years it has added some other benefits such as health insurance etc. Basically some part of the ‘x’ goes into your pension plan, some into your health insurance package. I assume a major part of it relates to pension.

      For a public pension fund, they are based on a pre-fixed table with certain non-discretionary criteria like age, salary, how many kids etc. They don’t check your health, whether you are a drinker, smoker, a dorgba abuser (just can’t help squeezing that in). Everybody within the same category makes the same contribution and receives the same pension payout. No one pays more or receive more within the same category.

      The solvency of a well managed pension fund is not caused by ageing population. As long as the actuarial life is maintained at a satisactory level (some say 70 years but I think this is too high) population level is not an issue. Solvency is a problem when asset valuation dips, such as the case when fund managers invested with Maddof and loss their pants.

      “To characterize social security systems whose solvency is looming as Ponzi schemes….”
      Caliphman, I’m relating only to the use of increased contributions, either by raising the rates of existing contributing members, or getting new members, to pay into the funds. If this is the source of funds to help pay the increased payouts due to the hike, then it is a ponzi scheme.

      Wikipedia : A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

      Inadequacies of the pension funds due to inflation is of course a serious issue. Which needs to be addressed. How to manage a pension fund that can adjust for inflation is a different issue. A payout hike is a knee jerk band aid for a situation which is better addressed by other social safety nets outside of the SSS.

      • caliphman says:

        Describing the SSS as a pension fund improperly masks its dual if not more primary socual purpose to provide workers a minimum level of retirement income for bare subsistence if not survival. It is neither a private nor public pension fund as it is here in the US or elsewhere where this public purpose is a major if not primary consideration and maintaining solvency and equity in relation to length of service and degree if contribution is tied to contributions.

      • caliphman says:

        To say that the iproblem of a minimum benefit level insufficient for a retiree’s survival should be addressed by other social safety nets is meaningless withon the Philippine economic and social context. There is no institutionalized safety met except for perhaps private charities. There is also the implicit social responsibility for long retiref workers whose fixed benefits have been ravaged by inflation and only a significant even if sudden increase in minimum benefits is the only conscionable alternative. That this may require an increase in contributions, cutback in benefits to more well off retirees, or even government infusions is all to be expected and happens all the time with quasigovernment organiztions in the US and other more developed countries; to wit Fannie Mae and Freddie Mac bailouts.

  9. josephivo says:

    Decision on SSS are very complex while different spheres of life converge. Many are ultimately political decisions and should be discussed openly so ultimately the public decides.

    To list a few:
    1- Investment policies and risk taking. What risk at what levels can be taken? Exchange rates, stock market policies, real estate, raw materials, bonds… all having risks to be assessed and mitigated, aggressive or conservative. By SSS or delegated to private investors.
    2- Demography. What evolution of the life expectancy? Population growth? Defensive/optimistic or offensive/pessimistic assumptions. Expected medical breakthroughs, expected calamities, correlation income/life expectancy.
    3- Solidarity between contributors. All equal, flat rates or staggered. If so what criteria. Inflation adjusted?
    4- Solidarity between pensioners. All equal, flat rates or staggered. If so what criteria. Inflation adjusted?
    5- Solidarity between this generation and the next. Working in a booming economy due to infrastructure and better education payed by yesterday’s generation could be a reason to have the current generation contributing to the current working generation a little extra for the current retired generation.
    6- Solidarity between workers contributing and the not contributing. Via tax paying or via SSS contributions. A lot of workers have no contracts and too meager salaries to contribute. Is it more efficient that the government deals with them or that the government uses SSS to help them when too old to work?
    7- “Efficiency” of SSS, operating costs, leakages. What is core, what can be delegated, what should be managed by the government?
    8- Expected future retirement age. In the west 70iers today are in better condition than 60iers 50 years ago. Retirement ages will rise, but slower than life expectancies.

    This list is not exhausting, just a trial to explain the complexity of the decision at hand.

    • karlgarcia says:

      Thanks for these Joseph.

    • josephivo says:

      9- In a good pension portefolio, what part should be government/ tax payers sponsored, what part should be in commercial private pension funds, what part should be in other investment vehicles. All income dependent, dependent on the quality of health care, dependent on inter-family solidarity, dependent on tax policies, exemptions for the elderly or not.

    • karlgarcia says:

      Quite related to No.5.
      Another reason for me to think that it is ok for the present salary earners to pay for retirees pensions is,
      It is like payback to our parents who provided for us.

      But it is really complex, the more I read into this topic.

    • chemrock says:

      I disagree Joseph, with most parts.

      1. Running the pension is basically a business issue. The govt should just let the professionals manage it. In countries with weak bureaucracy, this has always been the major problem – the executive interferring in the running of a non political agency, such as pension fund, or the central bank.

      2. The govt’s role should only be mainly concerned with :
      – the decision to set up a pension system for workers.
      – lay out the legalities, the enabling Act.
      – lay down the rules — the safety bells and whistles, such as management criteria, whether outside fund managers may be used, what type of investment portfolios are permissible, etc
      – the contribution tables — this involves the govt because it has to tie up with the grand scheme of wage rates, desired national savings rate, retirement age, income taxes,etc
      – establishing an independent compliance /watchdog /regulatory/agency/commissioner. (I think this is non existent in Philippines)

      3. The complexities of running a pension fund — you are absolutely right, all those complex issues of running a pension fund as you pointed out and much more. Nobody sad it is easy. But a lot of it is statistically driven. Most decisions are the assumptions to decide on. Certain aspects, as per (2) need to be in consultation and in sync with govt goals. Investment decisions are itself very tough calls.

      My reference to its ease for the govt is in relation to the data sets presented from actuarial models. EG in this hike, it says the actuarial life will go down to 14 years. Fact. So YES or NO it’s for politicians to decide. Easy no?

      4. Performance of SSS — with no watchdog agency who is to say whether they are incompetent? Who measures their performance to what? Did they perform so well that they had so much net income to give million peso bonuses? Or was it due to low interest payments to members? If investment returns are too low, is it because the investment portfolios are constrained by the law? If inhouse investment managers are poor performers, is the returns constrained by the law that prohibits outsourced fund management. I understand back in 2014 they were trying to allow for outsourscing some funds to professional fund managers – dont know what is the status. These are some of the issues that need to be investigated.

      • josephivo says:

        I didn’t intend to suggest solutions, only to indicate that the issue is complex and ultimately will need political guidance. Pensions involve too many people, too much money, one cannot expect the invisible hand come up with a balanced, fair and safe solution. Look at the risk taking, performance related salaries in the free marked lead to higher risk taking by top management, especially when knowing that failures will be paid by tax payers. Look at solidarity, the free market will exclude the weak. Look at x. look at y. Who decides? Who decides if the poor non-contributors get nothing, get a state pension or get their contribution paid by the state? Who decides the contributions per income class, who decides on the redistribution level, if any. Who decides on the transparency? What about sovereign wealth funds as an alternative as in China, Singapore, Qatar followed by a minimum survival income? The future will be different from today.

        The difficulty for the actuaries are the inputs and assumptions, the math and statistics are well established and standardized in computer programs. E.g.: 7% growth from now on, or more or fluctuating? For life expectancy the WHO has guidelines and different scenarios. Which one to use? What confidence levels? What will be the emigration level, the OFW level and average duration? Does the SSS expert decide or does he have to look for political guidance.

        Currently the debate to just the question of 1000, 1500 or 2000 peso as a monthly survival, a fair debate. But I read little in the quotes on SSS and how to organize a fair pension plan. Without analyzing, discussing all of the above one can equally good organize SSS and our pension system by using darts to decide. It leaves doors wide open for mismanagement. It is playing tennis without a net.

  10. karlgarcia says:

    I know I did acouple of articles about money,public spending and what not.

    Most are pipe dreams like fair tax, exploring Micha’s MMT (Registered and Patented), but to borrow one from Joe, those are just idea starters, but joseph always reminds us of the complexity in all these.

    About SSS, it has been a year when Bill volunteered to cover this topic, and now, we talk about it again, because there are lots of blanks to fill.

    I mentioned public spending, the past Dof secretaries and NEDA heads supports Duterte’s financial package (taxes).

    Additional contributions like SSS,would be less take home pay, and it affects both employee and employer, it cancels out the proposed income tax proposals, then add the other measures.

    Stop for now.

    • josephivo says:

      …..joseph always reminds us of the complexity in all these.

      “One has to explain things as simple as possible, but not simpler than that.” Einstein

      • karlgarcia says:

        Sorry, I might have said your name in vain in that one.
        I appreciate your explaining things as simple as possible.
        I got to find a guy named Occam, and borrow his razor.

        • josephivo says:

          Sorry, I didn’t mean it as a complaint, just as a lousy justification “based on authority” for a (sometimes) pedantic style of arguing. 🙂

          And the pedantic me again, in this twitter age of 140 characters we tend to over-simplify complex issues.

  11. Bill In Oz says:

    Well Chemrock from an ‘insurance corporation” perspective your article is fine. However you leave out some important facts.
    1 : The SSS is compulsory & nationwide under Filipino law for all permanent workers in no government employment.
    2 : SSS is managed by law by an agency of the Philippines government
    3 There have been major periods in the Philippines when corruption was rife and money held by government agencies were siphoned off for private illegal gain by politicians and other unsavory characters.( Marcos, his family and cronies, are just the top of this list ) That is SSS members got ripped off and plundered.
    4 : Government policies or incompetence, ( or both ) have at crucial periods since the SSS was established in 1957, devalued the members contributions.
    5 : In the last decade at least high government officials have authorised employers to employ employees on short term on 6 month rolling contracts to avoid such employees being compelled to under law to be registered with the SSS.

    Your article does not address these facts. So it does not address the core issues. These facts are the reason why so many SSS retirees are demanding that their retirement benefits be increased. And I seem to remember that Duterte said he would do that in his election campaign. And I suspect he won considerable support from older Filipinos for the reason. My mother in law in Bicol voted for Duterte ( and then for Robredo for VP ) partially for this reason..

    But you would have Duterte betray his election promise to increase the benefits paid to aged retirees. I think that would be politically very dishonest and frankly stupid.

    I admit that paying the retirees an increased monthly amount will undermine the financial stability of the SSS IF nothing else is done.

    But in the longer term the SSS needs to be reformed root and branch. I hope that Duterte can accomplish this as nobody else seems to have been interested in the problem.

    • Bill,

      There’s a push here to start investigating Social Security recipients (American Social Security that is) on both ethnic Filipinos and Americans who’ve migrated there (or some other 3rd world country), i guess mostly for fraud type stuff, but I think also the assumption that American tax payer money is being used outside the US. VA (Veterans’ benefits ) will also see some heat under Trump.

      Personally, I think American retirees retiring in the 3rd world is better for the younger generation Americans over here paying into this Ponzi scheme. for one, the US dollar becomes more out there; and two, less (comparatively) medical/pharmaceutical costs , hiring nurses, etc. ; and most importantly, IMHO the tropics is better for retirees (ie. spend their extra income on clubs; or get yourself a young wife…. I know Master Sgt.s and Master Chiefs, US Navy & Marines, you’ve retired there & done just that).

      So if they are out there in the 3rd world , they’ll be least likely to join AARP (old people club) and demand increases on entitlements, and living til their late 90s. IMHO they (gov’t) should be encouraging retiring Americans to move to the 3rd world, and if there is in fact fraud, in the long run I’m sure, the SSA will be ahead than taking care of them over here. So keep an eye on fraud, but maybe be more lax.

      I’m not a big proponent of outsourcing, but taking care of old folks, should definitely be outsourced… to the third world, it’s a win-win-win for everyone, for the old (gives them a 2nd mid life crisis in their 60s, LOL! 😉 ), for the 3rd world locals (wives, bar-girls, kids, inheritance, wisdom from the old, etc.), and for the young here (lessens the burden, more cost effective in the long run, I’m sure.).

      Am i right, or am i right?

      • Bill In Oz says:

        Lance..Your comment does not offer any way forward for elderly retired Filipinos who’s SSS payments are derisery.. Nor is it relevant to Chemrock’s post..

        • Sorry, I should’ve connected it to the article,

          if outsourcing the welfare of our old here, to the third world, then there will be money infused to the Philippine economy, but vice-versa,

          can money from there be sent to the US (via investment), to ensure fiduciary protections,

          so we send our old there, and you guys send your money here, since you’d ensure that less shenagans of your retirement money, basically…

          3rd world good for old people; 1st world good for your money (ie. no Bangladeshi bank heists, plus FDIC).

      • chemrock says:

        The ‘push’ and ‘pull’ is always there.
        From the 3rd word perspective, the govt can work on the ‘pull’ factors. And yes, Philippines have a pretty good ‘Retire in Philippines’ program. I’m sure Joe can vouch for that.

        But sad to say the current ‘KILL KILL KILL’ program has more or less killed the “Retire in Philippines’ program. The video has killed the radio star.

        • What do you think of the part where the money is brought to the 1st world to ensure a modicum of protection. Not to replace both the gov’t and public pension systems in the Philippines, but to augment. or simply give Filipinos another option.

          As for “KILL KILL KILL”, DU30 EJKs notwithstanding, how’s about a program to oblige those old Filipinos, who either have no SSS or other means, who want to go the Soylent Green route. I know as a Catholic country euthanasia and suicide are taboo subjects, but if the gov’t decided to oblige those old Filipinos (who want to move on), will it drastically help the SSS situation there? Have there been studies weighing this option out?

          Also, re push and pull, let’s say sonny in Chicago belongs to a church who wanted to help out Filipinos in the Philippines, I’m familiar with patrons from Canada, AUS , US and EU funding “scholars” to attend school there, which tend to be done piece meal, ie. every semester money is sent, and every 6 months-1 year theres fund raising events, etc. same with any public/church clubs really.

          Can’t you just consolidate said money and let it grow in some fund, then send dividends , etc. to the Philippines for your scholars? Now expand scholars to micro loans, for i7sharp‘s barangays program.

          There’s a big 2 way highway across the ocean that seems to be use only one way, chemp. These are just ideas off the top of my head, I’m sure there’s more, can we talk about other ideas, utilizing the OFW and diaspora feature of the Filipinos to aid in this SSS problem? To augment and/or replace said system. 😉

    • Bill In Oz says:

      A followup comment : The Philippines is unique in having a ‘hybrid’ retirement pension scheme. It is directly controlled, operated and managed by a government agency under Philippines law.

      BUT ( very but here ) all the money ( contributions & investment income ) in the scheme ‘belongs’ ( in theory ) only to members.

      • edgar lores says:

        Bill in Oz, nice observation.

        Indeed, the question should be asked: why is the government enforcing pension amounts and increases by law?

        • Bill In Oz says:

          Good question Edgar : the answer is simple : because the SSS is the government’s scheme and always has been.

          In the 1960’s the {Philippines congress & president decided that they wanted employees of private employers to contribute to it’s mandated pension state managed fund.

          It’s always been a government thing. There is no choice like in Oz. And as a result it’s been very vulnerable to being asset stripped and plundered. for the benefit of the state or more often the individuals running the state.

          I realise that these comments amount to a big fat, smelly, loud, fart. And that is the reason why there are so few comments back. But unless the core issues are dealt with this will always be dead weight preventing real positive change in the lives of Filipinos.

        • josephivo says:

          Why enforcing education? Food safety? Drug laws? Sometimes people have to be protected for themselves. Thinking ahead at old age is one of those areas.

          • edgar lores says:

            In Oz, personal pension schemes are either self-managed or professionally managed. There are many professional managers. There is a government regulatory body that oversees these professional managers. But the government or the regulatory body do not mandate details such as what investment portfolios should be used and the pension amount.

            The pension amount is calculated according to several factors such as the size of the fund and the expected life of the pensioner. So the pensioner is presented with a minimum-maximum range within which he can specify his monthly pension. Not only that, the pensioner has other options. He may choose his investment portfolio; his investment strategy, whether aggressive or conservative; or he may even choose to withdraw his entire fund.

            As for thinking ahead, the government simply mandated many years ago that employers/employees must have a personal pension fund… because it foresaw that government could not fully support aged pension benefits for all. So it set the employer/employee contribution percentage with mandated increases several years ahead. It set the financial environment in which the funds would be handled, not by the government but by professional financial institutions. So beyond the initial setup parameters, the government kept its hands off the funds, the investments schemes, and the pension amounts.

            Well, not totally hands off. Through the years, the government made improvements to the scheme such as allowing employees to contribute more than the mandated percentage, matching contributions for people with low salaries, and allowing employees to access the fund before retirement in cases of financial hardship.

            The degree of government control is important. Too much control, and you see inefficiency and substandard outcomes. Not enough control, and you also see inefficiency and, worse, failures.

            As JoeAm notes, there are some details that should not be hard-coded into law.

            • josephivo says:

              In Belgium a good pension plan is built on 4 pillars:

              1- A mandatory national pension. With a full career (45 years) it ends up to a minimum survival pension. A semi-governmental agency runs it. Most investments in the public field, infrastructure, national bonds… . The state/tax payers tops it up when needed. Part of a complete social network, including health care, unemployment, maternity leave… (for the poor, elderly included, the communities have “survival packages”, often cash, but also shelter, foodbanks, etc. funded by local taxes and mainly by national contributions according certain criteria)

              2- An “extra-legal” pension provided by most employers. The employer doubles the contribution of the employee, all tax exempt. Lager employers run their own pension fund, smaller ones belong to cooperative type pension plans, often branch related or they just buy plans on the insurance marked. What an employee contributes is his choice but with an upper limit. For changing employment several formulas are possible, keeping it and get pension proportional to the years contributed, transfer to the new pension fund, buy out the personal contribution, the employers’ contribution is often lost. Most of these pensions have two parts, a guaranteed minimum and a performance related part. The specifics are negotiated in the employment contract or part of the collective bargaining with the unions.

              3- A individual pension plan one buys on the insurance marked. Plans are often combined with life insurances, health care upgrades, etc.

              4- Personal investments, for many their private home (as for 66% of Belgian households). For the better off, a proper investment portfolio.

              For 2- and 3- the government has investment restrictions, such as a minimum coverage percentage (% of paid pensions coming from the investments, rest paid by current contributors and/or reduction of the performance part) often in the range of 95 to 98%), only investments with A grade ratings, a min. % in long term bonds, etc. Contributions and pensions to be automatically corrected for inflation. The participant representatives have to a minimum number of seats in the board of directors.

      • chemrock says:

        “The Philippines is unique in having a ‘hybrid’ retirement pension scheme.”

        Bill I suggest you take a look at Spore’s CPF (Central Provident Fund) it might give you some insight into what a govt can do with a savings / pension fund. I’m not getting into it here as we digress too far, but just to add that it was one highlight of what Deng Xiaoping wanted to learn from Spore.

    • chemrock says:

      “But you would have Duterte betray his election promise to increase the benefits paid to aged retirees. I think that would be politically very dishonest and frankly stupid.”

      Bill, this part of your comment relates to the objectives of the article. In the face of cold data — taking a course of action that would be detrimental to an institution that affects the lives of 31mm (and more as the years go by), given that those problems will not be felt within the terms of this admin, what course of action should the president take. For self-interest Duterte should make good his campaign promise and given the green light for the hike. But both Duterte and Pnoy said NO, a politically self-destructive choice. To you it’s “frankly stupid” but to me, honourable, because the viability of an institution like SSS needs to be protected at all personal political costs.

      Unlike Pnoy, I think Duterte calculated that he has enough political capital to ride over any backlash to this decision. What if his poll rating was’t that high, would he have made that decision? But let’s not deride him for a good decision.

      What seems lost to most people is something I brought up here. Estrada, the pro-poor president brought the actuarial life down to 16 years. Was that pro-poor? Just populism. A pro-poor president will never steal from the the people. SSS managed to bring the actuarial life up to 30s during the GMA years. Had this not been done, Duterte today would be facing a mother of a headeache of a SSS insolvency so big fentanyl can’t provide relief.

      You set out many other points which may or may not be valid. They are good points nevertheless, good enough for a separate blog. The SSS itself is not the subject of this article, for that reason I never touched on them.I just want to address 2 points you made:
      – corruption —- so far there has been no such issues with SSS. Even Marcos never touched the SSS funds. But then, as I mentioned, there is no independent regulator/ oversight function in the system. If there were corruption it would be in the investment part involving the accquisition of real estate fund asset. But its unfair to talk of this with nothing to go on. The huge bonus the board paid themselves is an issue, a moral one, and needs addressing.
      – competence — I think this is again unfair. On what basis can we say they are incompetent? Their inability to make sure retirees receive a sufficient monthly sum? This is a pension fund, not a social security scheme. Everybody knows that is the lot of pensioners, the problems of living on a fixed monthly sum. One is subject to the vagaries of inflation and exchange rates. One of the reasons why Philippines attracts foreigner retirees.

      Sure the country ought to have safety nets for those that can’t look after themselves. I’m sure there are many other schemes, it might make a good blog subject to pool these schemes into an article. In the context of the SSS there is one thing I can suggest. They ought to have an adjustment mechanism that re-distributes excess net investment income back into members’ accounts. So in good years, members get a little extra that could mitigate inflationary impact.

  12. NHerrera says:


    My comment is confined to the title of this post. In the early years of implementation of the Republic Act that established the SSS, the tools and convenience of doing the necessary calculations with all the inputs is relatively difficult.

    In 1960, the PH population was about 26 million, some years after implementation when the members were mainly contributors with few retirees; so any miscalculation will not have done great damage. (Proportionately the contributors then will be roughly 8 million compared to the now 31 million.)

    In 1990, when the population was about 61 million, the world has gone sophisticated with computers of great power and the birth of software applications or apps for various purposes. For example a lot of math calculations which one will labor through can be done easily with apps such as MathLab, Maple. I haven’t check but I will not be surprised if there are offered to agencies such as SSS or GSIS special apps — for a high price of course, but which can be afforded by these agencies — to do the calculations they are wont to do. I believe this, because there are a lot of such agencies in countries of the world who would want that kind of app.

    My point is that more likely than not, the expert staff of SSS have tools to make things easy for them and can do these calculations on a regular basis — doing a lot of scenarios on the inputs. How these results are handled by their bosses all the way to the Head of SSS and its Board is quite another matter. The Chief and the Board, I strongly suspect are not immune to raising their fingers to gauge the direction of the political wind, when it comes time to act.

  13. gerverg1885 says:

    I remember hearing an interview on TV wherein an old retiree said that an increase would help her with the costs of her medications for diabetes and complications. Which means that such increase would not actually go to her specific needs such as food and other important things for her daily survival.

    There are so many pensioners like her who are thinking of the same idea. So I am telling friends that it is only the drug manufacturers and the medical professionals who will benefit from this increase that they are demanding.

    I am an SSS pensioner for several years now and can honestly say that I am not so keen on that increase since I had been taking care of myself with natural means to keep me healthy.

    So if there will eventually be an increase in that pension, whether it’ll be 2 or 3k, it would not be enough to pay for medications for diseases that modern medicine is yet to find a cure for. The lack would always make their lives harder and poorer until they die.

  14. Quaddie says:

    This problem has been recognised since the 80’s by most countries. I don’t know why past Philippine governments either ignored or did not believe studies that the retirement of the so called “baby boomers” is going to cause serious strain on the government’s social security system.
    We had a visitor sent by the Philippine government here in Australia back in the late 80’s to attend a seminar that concluded that in the future (which is now!!!) the next generation of taxpayers in the workforce will not be able to afford to support the large number of baby boomers who will retire.
    In the sixties baby boomers were the taxpayers and had no trouble funding the social security system to support a very small population of retirees from the war era.
    Countries like Australia prepared for these by introducing compulsory superannuation (check this site to learn more: https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works ) so retirees can be self-funding by the time they retire. Subsequent years saw the government of the day come up with various (tax) incentives to encourage workers to save for their retirement.
    Why did the Philippine government ignore the results and recommendations from these study/studies when they were participants (they funded the travel and accommodation expenses of the team they sent)?
    Just wondering.

    • It is a good question. Two possible responses popped into my mind. (1) People in power benefited by setting it up as it was set up, and managed as it was managed. (2) Philippine laws reflect a high control system where many operating functions across government are written into national laws, a process that tends to cement them in place, fairly inflexible and hard to manage; they grow archaic or dysfunctional as the legislative fiddlers fiddle with more important stuff. (I frequently point to the fact that building codes are cemented into national law rather than delegated to an agency to keep them current.)

      • josephivo says:

        (3) Filipinos are masters in copy and paste. Studied all over the world and copied from all over the world too until they have laws that are so complex and contradictory that the more clever ones, with the better lawyers, can exploit.

        • Francis says:

          Not a matter of race in my firm opinion.

          To be fair—whether American or Japanese or German or Australian or Chinese—politicians (the government of the day) will be politicians. If a politician thinks in the long term and can drive the ship of state—then good. If not then it is okay—their purpose above ruling the state is representing the citizenry. But politicians aren’t meant or supposed to be the ones directly driving the ship of state. To use a naval analogy: while it would be good to have an Admiral who is familiar with personally maneuvering his flagship—that is not his job but the captain and staff’s. The job of the Admiral is to carry out the very vague orders of the Capital by giving out more specific orders to the captains and the rest who will interpret the orders according to the situation on the ground. Likewise: the job of the President and all other elected officials is to carry out the very very very very very very (and sometimes contradictory) vague orders of the general public by somehow making these into still vague but somehow coherent platforms and styles which the bureaucrats will then implement into something specific and workable.

          To cut straight to the chase—one of the big problems of the Philippines (and most Third World countries wondering why the “car of state” is always ever in neutral) is a strong and driven bureaucracy. We have good laws but we ought to need to build a nonpartisan bureaucracy that can implement them effectively.

          Really. A lot of problems would be solved if we had career officers truly at the helm. A lot. But give government officials the pay they need to have this morale and the public (to simultaneously hold
          two contradictory beliefs at once) all public officials must be like the saints and that working at a government for reasons other than self-interest is ridiculous—cue parents going to their children: anak, just work in the private sector or something) at the idea of working at cries over it like spoilt milk…

          • Francis says:


            *please ignore the parenthesis “)” after “once” in “beliefs at once” and replace it with a “:”

            **”cries over it like spoilt milk,” instead of “at the idea of working at cries over it like spoilt milk”

          • karlgarcia says:

            In my copy paste below.
            In 2010 there are 1 million gsis members, meaning at that time 10 % of the population, not counting contractuals, work for government.

            In my broken record reposts, in the GAA , personnel services has a considerable share.

            Not withstanding the mentioned bloated bureacracy, you are correct, we need a professional civil service, but we can not avoid presidential appointees, would that change in a parliamentary setup? then we will still have party appointees, correct?

            On micromanaging
            Dang if you do and dont.
            Some examples from the past.

            The president signs a budget circular, with out the dbm secretary’s sig,it is said to be micro managing.

            But, an executive agreement signed by an executive secretary,with no president signature is still questionable.

          • chemrock says:

            What the hell is wrong with the Philippines? From James Fallow to Joe, everybody has been trying to figure it out, and we get logical and well reasoned propositions coming from all sorts of angles of looking at the same picture. There is obviously no single answer, but I believe one important cause is the absence of a non-political, non-politicised, professional civil service, the administrative bureaucracy. This, you have also mentioned.

            When colonialism retreated, it became evident that most of those previously colonised countries that fared better were those that were once under the Brits. Unlike the others — Portuguese, Spanish, Dutch, French, Germans, Belgians, Americans — the British left built institutions in their colonies. They left behind functioning civil service that these colonies built on.

            • sonny says:

              chemrock, somewhere someone mentioned “the car of state.” I will add, this car of state does not have wheels but rather is standing, on both front & back axles, on hollow blocks. Everyone is tinkering on the engine and parts of government and any which part one applies interest, expertise and any resource. IMO in the absence of direction and utility in a shared, common political will such as in our current times, it is just as well that no wheels are on the “car of state.”

            • Francis says:

              Indeed. A comment on colonialism though:

              In fact, one can argue that the Americans being our second colonizers was a cursed blessing. The Americans had a decent record in handling us as a colony. In some ways, their achievements were relatively tremendous when compared to other post-colonial states in Africa and Asia; a 1963 book I had bought from a second-hand bookstore once described us like this:

              “The Philippines actually rank second to the United States in the proportion of people attending high schools and universities…” The Americans gave us a robust educational system that was globally competitive for its time.

              What “blessed curse” did the Americans give us? We inherited from America a suspicion for government and a preference for private enterprise* and initiative; how convenient for an elite of petty dynasties ruling like little feudal lords to have a weak state to bother them not. This furthermore helped curtail the drive of the national elite to be ambitious–the ambition necessary to rapidly modernize a nation-state. This inheritance–coupled with a childish dependence* on America–made for extremely unfavorable conditions for crafting a bureaucracy capable of intensely mobilizing for the interest of the nation.

              Why need a driven, ambitious bureaucracy when you have an elite content to focus their ambitions on domestic musical chairs–rather than gaining glory by making the prosperity of nation a statue for your pride? Nick Joaquin once noted how Filipinos think small. Same could go for the elite. In fact, they’re smaller and smaller in stature; Sotto.

              Again, I repeat this description in 1963, written by an American sociologist:

              “The Philippines actually rank second to the United States in the proportion of people attending high schools and universities…”

              And now we have to swim upstream. Neoliberalism is King. But who knows? Maybe that’s the silver lining of Trump and Duterte in their crude fascism. They’ll scare us enough into actually dreaming big again.

              *I have nothing against capitalism or an alliance with America. Just that, as Japan’s experience shows: a mixed economy where state and business work hand-in-hand for the nation is far better than a stale command economy or a ruthless laizze faire regime where business forgets national interest, and that just an alliance with America is no hindrance towards pursuing a relatively major role on the global stage and saying no to America sometimes–respect will come when you respect yourself first.

    • chemrock says:

      To your final question — lack of political will, lack of visionaries, Philippines never have long term plans beyond 6 years, no continuity of plans from one admin to the next.

      The problems of baby boomers retiring you refer to apply only to AFP/PNP/GSIS because these are social costs, tax payers foot the bill. SSS is different. It’s a self-sustaining fund, or so it’s supposed to be.

      Baby boomer problems are upon us now, but it is still not a problem on the pension social cost because of high population growth rates in the past decades. The problem comes 20-30 years after a pop dip.

  15. chemrock,

    Out of topic but I would like to hear your take on this article, please. Credit Suisse clients are being advised to sell their Philippines stocks due to “risky” government policies in the offing. The comments on this article are also very interesting and some are downright humiliating. Some commenters are blaming Loida Lewis for it while some personally insulted the author. Filipino trolls are everywhere on the Internet now-a-days and they mimic the 50 Cent Army:


    • The Filipino trolls are not being taken seriously by the readers I can see.

      And Credit Suisse is like the name says in Switzerland: US influence unlikely.

      • Juana Pilipinas says:

        The readers are mainly concerned about their financial investments in PH and not there to get into the political drama.

        I was ashamed though because they are showing their behinds to the world.

    • chemrock says:

      Most ordinary guys do not give that much weightage to governance when it comes to risk assessment. They assess mainly the quantitative — market valuations, P/E ratios, chart technicalities, interest rates, etc. Governance is a key qualitative factor that helps financial institutions arrive at a position on country or sovereign risks. Most internal banks are unsettled by events in Philippines but they understand from the economic viewpoint that the country is running out 2016/2017 from the strength of the previous admin, so we will still see good GDP figures. The full impact of the negativities of the current admin will bear down on the country 2018 forward. Credit Suisse’s view of country risk of Philippines is not a rarity, that I can assure you. Other banks have not yet reached the “Sell” stage yet. You get a few banks to follow suit, then sentiments will dampen further.

      Don’t expect those troll comenters to understand investor thinking. Suggesting Loida Lewis had such an influence on a banker’s risk assessment of the country is paying her a great homage that is totally out of proportion to her activism and a great insult to the risk intelligence of bankers. I dont think any of these bankers even know who Loida is. As I have mentioned elsewhere, banks collect their own economic intelligence in almost all countries they transact with. Many many not have operating units here, but most have rep office, or an office in another country with responsibility for covering Philippines.

  16. wjarko says:

    Vote buying through SSS.. Pushing through a SSS payhike…. who ever gets the credit may actually buy his ticket to the presidency in 2022, that’s 2 million pensioners + 31 million paying members who may stand to benefit from increase in pensions in their future retirement.

    Its also CCT through SSS. The only problem is SSS doesnt target the poor, it reaches the middle class, and even the well-off who dont really care about SSS pension.

    SSS pension increase is the least os SSS’s problems. There are a lot of inefficiencies in the system they have big problem in account verification of fake people, multiple claimants from different dependents/families, lost records from local registries/NSO/PSA.

    National ID System before SSS reform!

    Come to think of it, 2000 Php may well just go to the VAT paid to food and utilities of these SSS pensioners.

  17. karlgarcia says:

    I saw a march article mentioning a proposal to merge GSIS and SSS.
    If we want less government intervention then this would be a no ?
    Will there be any pros to this?


  18. karlgarcia says:

    off topic, I have posted this before.The looming crisis over the AFP-PNP pension

    I don’t think much has changed since this article was published last 2010.

    I need your opinion on this.

    MANILA, Philippines—A crisis involving the pension fund of military and police personnel is looming, with the government facing the prospect of forking out more money for the retirement benefits of soldiers and policemen than for the salaries of their comrades in active service.
    Under Malacañang’s proposed national budget for 2011, P100.597 billion is allocated for the salaries of the 250,000 to 300,000 members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP).
    A total of P53 billion is set aside for the pension of retired military and police personnel, or one-fifth of the projected budget deficit next year.
    There are roughly 120,000 retirees in the AFP and 50,000 in the PNP.
    Sen. Ralph Recto, chair of the ways and means committee, said the P53-billion pension allocation for the military and police personnel was glaring when compared with the P22 billion in annual benefits given by the Government Service Insurance System (GSIS). More than 1 million government employees are members of the GSIS.
    At this rate, Recto said the government would be paying more for retired soldiers and police personnel by 2019 than those in active duty.
    “The government has to address the problem before it explodes in our faces and we end up spending more for the retirees than those in active service,” he said in an interview.
    At a Senate hearing last week, Budget Secretary Florencio Abad Jr. raised the possibility that the government would be spending more for the pension of retired soldiers and police personnel than the salaries of those still in uniform.
    “That is an area of concern not only for the uniformed personnel of the PNP and the AFP, but also for the judiciary because these institutions do not contribute to the pension fund like GSIS. (The benefits) to members are coming out of the appropriations,” Abad said.
    Retirement age
    Another factor contributing to the pension problem was the retirement age of soldiers and policemen, Recto said.
    Soldiers and policemen retire at 56 years old, lower than the norm of 60 to 65 years old, thus giving them a longer period for enjoying benefits.
    The national government has to shoulder the pension of soldiers and police personnel because they have no retirement system.
    The military was supposed to have its own self-sustaining pension fund through the AFP-Retirement and Separation Benefits System (AFP-RSBS), which was formed in 1973. The agency was shuttered four years ago when it went bankrupt due to gross mismanagement by generals on its board.
    The police have been getting their pension from the National Treasury since the PNP was spun off from the defunct Philippine Constabulary in 1991.
    Recto said the collapse of the AFP-RSBS was the main reason the government was spending heavily for the military and police pension fund.
    Pampered lot
    Recto and Abad noted that compared with other government workers, soldiers and police personnel were a pampered lot. Besides the early retirement age, they get monthly pension equal to those received by counterparts in active service.
    For example, a general who retired 15 years ago would be getting the same amount due a four-star general in active service, according to Recto. In addition, soldiers and policemen retire at the next higher rank, he said.
    Moreover, their pension increases by P5,000 when they reach 65 and 70 years of age aside from the total disability benefits amounting to P1,700.
    “We have to look at all these factors and assess the viability of the military and police pension fund system because the government cannot sustain this for long. We must have a self-sustaining pension fund in place,” Recto said.
    Abad said the Department of Budget and Management would conduct a study of the military and police pension fund system and recommend how to make it more sustainable without being a huge burden on the government. –Gil C. Cabacungan Jr., Philippine Daily Inquirer

    • chemrock says:

      Karl, I don’t know much about AFP, PNP and GSIS so I can only comment based on this old news article.

      1. The pensions are social costs — fully borne by tax-payers. The employees do not contribute anything.
      2. GSIS — they have a pension fund. For active members, the govt pays for their monthly contribution into the pension fund and GSIS manages the funds. Retirees receive their monthly pensions from the GSIS fund directly.
      3. AFP & PNP — there is no fund. The govt allocates out of their budget and pays retirees directly.
      4. From accounting viewpoint, the AFP & PNP treatment is fundamentally wrong. The retirement cost of active personnel is NOT being recognised and provided for. With each month of service, there is a cost which do not get paid until after retirement. If it is not recognised, and thus not recorded, there is no data on the future cashflows. Recto and Abad talked of an impending explosion. By gut feel they can see the looming danger, But a data blackhole does not allow for a quantitative analysis of how serious it actually is. They are groping in the dark.
      5. Should we have a pension fund for AFP/PNP? Absolutely, But this will be a hot potato. No admin is ever going to address this issue. It will forever be the most dangerous elephant stalking in the room. Why there will be no action?. Because the year that they implement the pension fund, budget appropriations will be astronomical. It’s a double whammy — they need to allocate for those retired, and build the funds for the active members.
      6. Should we have a single fund for AFP/PNP/GSIS? — Absolutely. The cost of duplicity is tremendous.
      7. To have a single pension fund for all civil servants would require some reforms. The benefits need to be synched. There will be adjustments, realignments, there will be unhappiness in some quarters. And there is no better time than now for reform. Why? Because Duterte is dishing out some goodies to active personnel of AFP and PNP — the doubling of salaries. You give some, you can take some back. Less pain, less unhappiness. But this is unlikely going to happen. They always go for populist band aid solutions. There are no visionaries.
      8. Should we have a unitary pension fund in Philipines? — I think there are tremendous advantages:
      a. Fund management cost minimised.
      b. Big is beautiful — opens up wider investment opportunities, better ROI.
      c. The funds can be marshalled to play meaningful national roles in the capital market.
      d. This means SSS and govt pension funds need to be unified. Reform govt pension funds, do away with it. Simply adopt SSS model. That means salary adjustments for govt employees because they will now be contributing. Why not make it a reform to restructure civil service pay scales in line with open market.
      9. What if we do nothing? In the absence of data, we can’t compute. But Abad and Recto had misgivings. The problems has been kicked down from one admin to the next. Everybody’s OK with the status quo. Do you know what’s keeping the problem from exploding so far? Your huge population growth over the past few decades. Imagine the 2 kids policy is implemented. 30 years down the line, if pensions are still coming out of budget appropriations, the social cost of retirees cannot be supported by a shrinking population base. China is struggling with that problem now, but they have huge savings.

  19. karlgarcia says:


    to effective this month, next increase would be in 2022

    • chemrock says:

      Damn, how quick the mind changes. There goes out the window, my comparison of the president to the iron will strength of Pnoy. Curious what happened in the cabinet. Guess the numbers guys Dominguez, Pernia and Diokno loss out to other cabinet members who are game players. Or did he listen to BB who proposed 1,000 peso hike?

      The maths:
      1. 2m x 2,000 = additional 2b pesos every month for retirees.
      2. 31m x 2,000 = additional 31b pesos monthly future payments to active members who will retire in time.
      3. There is a 1.5% increase in rates. What is employer/employee contribution we don’t know yet.
      4. New actuarial life — we dont know yet.

      Is it still a ponzi scheme? — Peter is still paying Paul.

      Is it beneficial to active members? We don’t know. Firstly we dont know how much will the employee’s share of the 1.5% will be. Secondly we dont know the actuarial tables. For those nearing retirement age, it’s beneficial so long as their additional contribution is less than 1,000 pesos. It’s difficult to tell without understanding the tables. It may well be disadvantages to them. So it’s going to be non-transparent. 31 million folks are’nt going to know if they have been screwed.

      What about employers? We dont know how much of the 1.5% increase in contributions will come from them. And that’s what they mean when they say the unpredictability of this admin is no good for business.They have worked out their budget for 2017 months ago, and if they have 20,000 employees, their payroll cost may now be impacted.

    • Posted this on FB in response to irate active members who think they are the ones being sacrificed so that retirees could be given this pension hike:

      I feel for the actively paying SSS members, what with the take home pay being affected because of the impending higher inflation rate due to peso depreciation and oil products hike…with little hope of salary increase. The initial conclusion is that they will be made to pay for this pension hike and the need to save the SSS from going bankrupt, but think of it this way:

      The longer you will pay for a higher premium based on a higher salary credit, the better it will be for you guys when it is time for your own retirement and your own monthly pension. The pension is computed based on a continuous higher salary credit which should be more than 10 years, not on the latest monthly salary credit (MSC) prior to retirement. In short, you will be preparing for the time when you yourself will be in need of a higher pension. In my aunt’s sad experience, she paid 20 consecutive premium payments but her MSC was so small so much so that when she retired, she only got 1,200 monthly pension, just “barya” compared to her needs for maintenance medicine.

      The SSS (unlike GSIS) has a cap or a maximum limit on MSC all these years that’s why retired private workers receive way way smaller pension compared to retired government workers. I hear the SSS is leveling up the MSC to a 20,000 level from the current 16,000 one

      I hope the Administrators would take care of the SSS funds better, invest it wisely and run after delinquent employers. Reduce / rationalize their monthly allowance and bonuses because whatever higher yield they get from investing the SSS billions should revert back to the benefits of the members. They should minimize endo or contractual workers because this limit the SSS membership to the detriment of these contractual workers. There should be growth in the actively paying members, equal to or more than those who are retiring. Investing these billions in toll roads so that long term investment income can be assured is a good plan, leasing those idle properties like land and condo units is another. Politicians should not use SSS funds for their own “pampabango” measures to make them attractive to voters, like calamity donations in the guise of calamity loans for non-qualified members if ever such rumors really occur.

      • NHerrera says:


        Can you help me understand the mechanics of the maximum MSC (Monthly Salary Credit) of the now projected P20,000 as against the previous P16,000.

        My understanding from my hearing of the conversation between a rep of SSS and Ted Failon this morning is that the total SSS contribution of the initial 12.5% (from the previous 11%) comes from SSS-member employee of 1/3 and from the employer, 2/3.

        So now, if say, I have a monthly salary of P150,000 from my company for the last 5 years (smaller previously), my 1/3 contribution out of 11 percent — 2/3 comes from the employer — and assume this had always been so; and assuming that the computation is based on my salary the last 5 years; and I had worked for 25 years, then my contribution would come to P1.65 million (=150,000×0.11x(1/3)x12x25) — actually MUCH LOWER because of the assumption I made, probably closer to half that.

        If I retire mid-2017, and assuming I qualify on age of retirement, will I be entitled to the Max MSC of P20,000 per month, since I am reasonably at a high bracket contributor? To make it reasonable, say, instead of MSC Max of 20,000, I get P15,000 per month for life. Say, I live for another 20 years. I would then get cumulatively, P3.6 million (= 15,000x 12×20).

        Do I make sense?

        Mary, I am imposing here, knowing your work, while I am free to waste my time. Do it if you have time or ignore.

        • Sir NH

          This would be a very brief response as I have an appointment at 2:00 pm this afternoon, also, am basing this on experiences from known friends and relatives so I am by no means an expert.

          Unlike the GSIS where there are no cap in the MSC, the SSS have a cap that they determine, the basis of which, I have no idea. An example is Christian Monsod who was privately employed and was an executive but his monthly pension is peanuts, compared to his wife, Mareng Winnie who’s a UP professor.

          The 20K MSC is proposed to be effective this May, 2017…the previous 16K MSC was for 2013-2016.

          Thus, no matter how substantial your monthly salary is, you are limited by the cap, so if for 5 years starting 2017 to 2021 you are earning 150K, your premium contribution will still be limited to the MSC cap of 20K, if within that period, no upward adjustment is made on such MSC.

          It should be noted that the SSS requires a 10-year period premium payment based on the highest MSC for a member to have a hope of getting a higher pension per month, plus it will not necessarily be 20K, it’s usually smaller than that.

      • Bill In Oz says:

        Mary your comment here is well thought through and I agree with everything you have said.

  20. NHerrera says:


    The news on the pension hike is that the P1000 per month increase in retired SSS pensioners benefits will start February — the other P1000 will be given by 2022 or earlier — and will need starting May an increased contribution of 1.5% from the current 11% to a total of 12.5% (from both SSS member-employee and employer). But that the total contribution is projected to increase to 17% increase in 6 years, unless SSS is able to increase its efficiency and improve its investment earnings. No tax money will be used for the purpose.

    I am not optimistic that SSS will be able to increase its efficiency and investment earnings so that the increase will stop at 12.5%; so the 17% planned increased contribution is more likely than not. The increase from 11% to 17% is rather hefty to my non-finance/ non-economist mind.

    This, to fulfill the so-called SOCIAL CONTRACT made by Duterte.

    • chemrock says:

      a. As long as in increase in contribution rates parallels an increase in the benefits in accordance with actuarial computation, it is equitable to the members.

      b. If part of the increased contributions is to fund increase in pension payouts of those who already retired, it is a ponzi arrangement that disadvantages active members because it destabilises the fund.

      c. Increase in contribution has to take into consideration sum total of lots of issues :
      c1. Business cost goes up. Impacts labour intensive operations, like BPO. Lost of jobs as companies respond by going hi-tech, automate, get machines to replace labour. Mcdonalds in US is trying to use robot order takers.
      c2. Pension fund contributions are likely to be tax-allowed, thus taxable income goes down, less tax collected by BIR.
      c3. Disposable income goes down. Employees take home pay goes down. So the issue affecting livelihood crops up. Where wage levels are low, as it is in Philippines, this is a serious problem.
      c4. Savings rate goes up, thus propensity to save goes down. This impacts retail savings in banks.

      e. The nobility of the intended rate increase depends on what is the govt’s objective.

      f. If it is to increase pension payouts, the majority of lower wage earners (below 15,000 pesos) will never be able to enjoy a decent pension by the time they retire due to (i) the impact of inflation (ii) the low wage level in Philippines.

      • NHerrera says:

        The key then is (a) — reasonable actuarial computations, with loads of assumptions which in this fast-changing and politically-driven part of the world may be debatable. Thanks.

        I understand that rating companies like Fitch, etc will consider this item, among others, next time around. I don’t know if the trio of Dominguez, Diokno and Pernia will be bothered.

  21. SSS officials’ salaries

    • karlgarcia says:

      Was it Gordon who said that he does not mind ( sss official’s salary) because they are handling a large amount of money?
      Why do fail the comprehend the reasoning in that.

      Then Drilon said the May contribution increase is illegal,what to day do,write a law,pass it,have it signed before May to address that???

      • karlgarcia says:

        You answered my first question, it is at par with what the finance people (fund managers,etc)are earning.

    • NHerrera says:

      I took the average yearly compensation from that table and I got 3.44 million pesos. Let us say that other allowances comes to another half a million pesos, so the sum comes to a round number of P4 million per year.

      In one context that amount, which comes to P350,000 per month, is not excessive. I know for a fact that good financial or stock market analysts easily gets that amount. But oh how these guys work. If only all these officials are qualified and really work hard and responsibly, I will not begrudge them their compensations. But the reality is most probably another matter.

      • NHerrera says:

        Another context: my estimate of that average total compensation of 4 million pesos when multiplied by the 34 officials listed in the table comes to P0.136 Billion, not chicken feed by any measure but considering the amounts we are talking of in this SSS item, not shocking, to my mind, if as I said above, they work hard and mindful at all times of their fiduciary responsibilities.

      • chemrock says:

        There is a world of difference between a passive investor and managing a trading portfolio, especially those of a fixed income securities.

        SSS are constrained by what they can invest in. And rightly so due to the nature of it’s mission. The enabling legislative act determines the assets or securities the SSS are allowed to invest in. It seems these are too specific and thus restrictive. Better be safe than be sorry I guess. The safer means the lower earnings. I wonder if a bunch of attorneys in Congress are smarter than investment professionals when it comes to investment strategies.

        A bunch of guys with an investment objective of investment that locks up its returns to maturity out of long term funds with fixed rate (SSS members earn a fixed rate) is entirely different from someone managing a portfolio chasing the yield curve and having to manage their funding requirements at the same time. The compensation ought to reflect that difference.

        On compensation — It’s a question of how do we see the SSS. If it’s civil service — to bad, need to comply with the pay structure.Maybe some bonus for the investment crew? — need to tie in with performance, but performance related compensation has been a curse of the industry once too many often because it prompts too much risk taking. In any case, who reviews the performance of the SSS. There is no independent review board/ regulator.

        One final point — why does the board get such high compensation? Do non-executive board members meet every day? In many banking institutions, the traders actually receive higher compensation than even the chairman in recognition of the one who’s bringing in the beef. Those big compensation numbers Mary showed — obviously they made good returns. But then, what was it really good?. Have members’ fixed returns been suppressed in comparison to market rates?

  22. Tem says:

    I am curious. How did the GSIS do it? There was a time when government employees were afraid to retire because they saw that those who retired ahead of them were not getting their monthly pensions. They had to resort to borrowing from relatives, friends and the friendly Sari Sari store just to get by. This has all changed.They came from bankruptcy a few years ago to now giving truly life-supportive pensions to its retirees. In most cases, GSIS retirees now receive in pension almost the same as their last salary. Are the managers at the GSIS supermen?

    • karlgarcia says:

      I was wondering why there are only more than 1 million GSIS members whole we are said to havethe most bloated bureacracy.
      So I checked who are thise covered.

      Coverage Edit
      The GSIS covers all government workers irrespective of their employment status, except employees who have separate retirement schemes under special laws, to wit:

      Members of the Judiciary and Constitutional Commissions
      Contractual employees who have no employee-employer relationship with their agencies
      Uniformed members of the Armed Forces of the Philippines, and the Philippine National Police, including the Bureau of Jail Management and Penology, and the Bureau of Fire Protection.

      Aside from the judiciary, the uniformed services,etc.
      Contractuals are not covered, how many are contractuals from the inhouse utility personnel to consultants.

      So one reason GSIS is better of than SSS
      is that there are only about 1 million GSIS members compared to the 33 million SSS members.

      Winston Garcia’s $ 5 billion investment.
      He invested 1billion $ abroad in a global fund managed by global fund managers, and a few more billion locally through securities and properties.
      Not all their recent endeavors were fruitful, the GSIS managed thrift bank went bankrupt last year.

      In the mean time the active government personnel whether they are gsis members or not, are funded by the GAA or the national budget, and they eat 30 percent or more of the budget.

  23. From Mareng Winnie (Solita Monsod)

    The Reader may well ask: How come the Government Service Insurance System pensioners get much larger pensions than the SSS pensioners? My husband’s SSS pension is something like P5,000 a month; my GSIS pension is something above P20,000—and I never earned (as a University of the Philippines professor) anything near to what he was earning.
    Again, there’s no “magic” in it. It’s simple arithmetic. Government employees contribute 9 percent of their income every month to the GSIS. The private-sector employees contribute only 3.63 percent of theirs to the SSS. What’s more, that 3.63-percent contribution is subject to a maximum P15,000 of income, while GSIS members have no such ceiling; they pay 9 percent on total income. The government contributes 12 percent of income as its contribution, so the total is 21 percent. In the SSS, employers pay 7.36 percent, so the total is 11 percent. If the private sector wants larger pensions, it should contribute larger amounts. Truth hurts.


  24. i am against the hike.what i want is the same rates for every member when computing their monthly pension.current system discourages members to push themselves to pay higher contributions.

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