SSS won’t go bankrupt with P2,000 pension increase, lawmaker says

Party-list Rep. Neri Colmenares of Bayan Muna on Tuesday said that Sen. Juan Ponce Enrile’s contention that the Social Security System (SSS) will go bankrupt with the P2,000 pension increase is without basis and can easily be debunked.

“The SSS and Sen. Enrile should stop trying to delude the people that it has no funds for the P2,000 pension increase because this is not true. The SSS board in Congress hearings actually admitted several times that it has the funds for the pension increase. The increase will only shorten its fund life to 2029 instead of the current 2042,” he added.

Assuming this is true, he said, 14 years is more than enough time for the government and SSS to find ways to increase its fund life. In 2001 SSS declared that it has a fund life of only five years and, yet, it was able to increase this to 2042 in just 14 years.

“If it previously survived a five-year fund life, then surely it can also survive a 14-year fund life. Truthfully speaking, we are in a better shape than the United Kingdom, which has a fund life of only up to 2027 and Canada, which has a fund life of 2022 or merely seven years,” Colmenares, also senior deputy minority leader, pointed out.

In fact, he said, SSS has P428 billion in investment fund, which generates an investment income of an average of P32 billion per year.

“With this, the net revenue of SSS in 2014 was a huge P44.47 billion. Its assets amount to nearly P500 billion. Ayaw lang talaga dagdagan ng SSS ang pension ng mga pensioners kaya ganun na lang ang kanyang pag-oppose dito. Mas gusto pa ng SSS na pahabain ang buhay ng pondo niya, kesa buhay ng mga miyembro niya,” Colmenares said.

Instead of harping on increasing contributions,  the lawmaker said the SSS should (1) improve its collection efficiency from the employers of its 29 million members, (2) collect the billions in contributions, which delinquent employers failed to remit in the last 10 years, (3) cut down in bonuses and perks given to its board members and collect the more than P200-million retirement package given to SSS board members in 2009, and (4) collect the fines imposed by the courts against employers who violated the SSS law.

“If this is not enough, then Congress can always provide for subsidies as provided under Section 20 of RA [Republic Act] 8282 as amended. There is no way that the SSS will go bankrupt as the SSS wants people to believe. In fact, under Section 21 the Philippine government guarantees the benefits and solvency of SSS,” Colmenares said.

“The SSS pension increase law does not allow for an increase in premium contribution. So it is best for SSS and Sen. Enrile to support the pension increase and, together, with the government look for means to increase its fund life instead of using nonexistent obstacles to the pension increase. SSS is so obsessed with its funds that it has failed to see that it has completely abandoned its mandate to provide genuine social security to the people.” Colmenares said.

source:  Business Mirror

GIR Reaches $81B in October

Preliminary data showed that the country’s gross international reserves (GIR) rose to $81.14 billion as of end-October 2015, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco announced Friday.

This was slightly higher by $0.59 billion than the end-September 2015 level of $80.55 billion due mainly to the National Government’s (NG) net foreign currency deposits, revaluation adjustments on the BSP’s gold holdings as well as its income from investments abroad. 

These were partially offset by payments made by the NG for its maturing foreign exchange obligations.

The end-October 2015 GIR level remains ample as it can cover 10.4 months’ worth of imports of goods and payments of services and income. 

It is also equivalent to 6.1 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity. 2

Net international reserves (NIR), which refer to the difference between the BSP’s GIR and total short-term liabilities, increased by $0.59 billion to $81.13 billion as of end-October 2015, compared to the end-September 2015 NIR of $80.54 billion.

source:  Malaya

Study shows top concerns of OFWs

OVERSEAS FILIPINOS tagged emergencies, retirement and education as their top concerns in setting aside savings, a survey commissioned by the Philippine American Life and General Insurance Co. (Philam Life) showed, although most savings are coursed in short-term instruments.

A study on overseas Filipino workers (OFWs) conducted by Taylor Nelson Sofres (TNS) last April bared that migrant workers have long-term goals but most of them don’t have long-term investments.

According to the study, 66% of the respondents said their purpose in saving is emergency; 36% said retirement; 33% cited their children’s education; and 22% said investing in a home.

“[W]hen asked about their readiness to stay home permanently, 82% of the survey respondents said they are not ready to stay home for good for two main reasons: they do not have enough savings; and their goals have not yet been realized,” the study said.

The study also showed that an OFW wants to accumulate an average of P3 million to feel he is ready to come back for good; and that it would take the average OFW up to 18 years to save up that amount.

Philam Life said 97% of OFWs save in short-term instruments like savings accounts, while only 7% save in medium-term instruments like personal insurance, pre-need and investments.

“97% utilize bank accounts for savings, 4% in personal life insurance, 2% for nonlife insurance, 1% for pre-need plans and 0.4% for investment portfolio,” the study said.

Only 52% of OFWs also invest their money, the study said, noting that property, jewelry and business undertakings are the top investments for migrant workers.

Philam Life Chief Marketing Officer Jaime Jose M. Javier, Jr. said 10% of Philam Life’s policyholders are OFWs. Its distribution is majority through agency force of over 9,000 agents, he added.

The respondents in the study were mostly on a two-year contract with an average tenure of six years working abroad and earning an average of P50,000 per month.

Philam Life reported an P18.312 billion in premium income in 2014, the third largest in the industry, although down from the previous year’s P19.966 billion, based on its submitted annual statements to the Insurance Commission.

Philam Life’s total assets stood at P226.8 billion, net income was at P5 billion and net worth of P85.2 billion. It has close to 6,000 policyholders and more than 1.7 million insured group members.

source:  Businessworld

Diaspora shield vs capital flight

IF THE UNITED STATES raises interest rates, emerging nations skittish about potential capital outflows do have one key weapon in their arsenal: remittances from national diaspora.

The World Bank says money sent home by workers abroad to countries including Mexico, the Philippines and India will probably reach $427 billion this year, almost as large as the $443 billion in estimated net portfolio inflows.

Remittances, which are forecast to increase to $471 billion in 2017, are three times larger than official development loans and more stable than portfolio inflows, according to the World Bank.

“Remittances are relatively stable and acyclical: they are stable even during episodes of extreme financial volatility and they can help promote consumption stability,” said Dilip Ratha, lead economist for migration and remittances at the World Bank’s Development Prospects Group.

“The relative importance of remittances as a source of external financing, therefore, is expected to increase further in the medium term.”

Workers seeking better paying jobs abroad have long powered consumption and boosted foreign exchange in their home countries.

The Indian community abroad sends home more money than any other group overseas -- $70.4 billion in 2014, or double what the nation attracted through foreign direct investment.

“Growth in private capital flows to developing countries might well moderate when interest rates begin rising in advanced economies, or if growth in developing economies remains weak,” Mr. Ratha said. -- Bloomberg