January 31, 2016

SSS pension hike -- it's a class thing

I waited to hear the views of a friend, a former SSS top executive who sought a meeting with Rep. Neri Colmenares, original sponsor of the bill that seeks to raise the Social Security System (SSS)  monthly pension for more than 2 million retirees by P2000.  I wanted to balance out my thinking on the issue even though I had read and heard almost all there was to hear on both sides of the argument.

I wanted to give this person the benefit of the doubt since I know him to be an upright person, hardworking, a top professional in the private sector before being recruited into government service, and having come from humble beginnings. Unfortunately the more he expounded on the basic position of current SSS executives, on which basis Pres. BS Aquino vetoed the bill, the more I became unconvinced of the merit, nay soundness, of the presidential veto.

While acknowledging that the SSS fund is a social fund meant to serve the needs of its members, the former official tried to convince us that people expected too much from the fund, that the contributions were way too small while the services it was giving out were costing a lot.  Ergo the basic solution is to increase the members' contributions. In the meantime, there could be no increases in benefits that would  only shorten the life of the fund.

He acknowledged, however that increasing contributions is easier said than done. The convincing would have to come in the form of more efficient and substantial services.

Now when one considers that the SSS was listed recently by the Civil Service Commission as one of the top three government agencies that they received complaints about in terms of services, doesn't the SSS indeed have a lot of convincing to do?

Wouldn't a reasonable increase in pensions serve as a strong signal that the agency was willing to work hard to be able to give members a decent pension when they retire?

When asked about plugging the leaks in the system like the billions of contributions collected but unremitted by employers, the former official lamented how difficult it is to do this, that SSS lacks personnel and resources.

So how can SSS convince its members that they need to give more when what they are already contributing is not collected properly by SSS. (Or as one struggling entrepreneur counter-lamented, it takes SSS forever to officially tally contributions in their data base from the time the payments are deposited in receiving banks. In the meantime their employees cannot take out any loans and vent their ire on their employers!)

About the touted sterling performance of the SSS in terms of fund management under the stewardship of SSS President De Quiros, my friend intimated that there were SSS properties that were not sold during earlier administrations in order to have higher returns with the property boom in certain areas of Metro Manila.  This certainly didn't seem to take such a financial genius to figure out; that it was quite a matter of waiting for a better price.

In the meantime, .isn't it unconscionable for SSS executives to give themselves such fat bonuses on the ground that they made the fund grow through their supposedly astute handling of SSS investible funds when they refuse to let the ordinary members share in some of that purported growth.  On this point my friend couldn't help but nod in agreement.

Rep. Colmenares came quite prepared for the one-on-one discussion bringing with him documents that the SSS had submitted to congressional hearings. He had the facts and figures at his finger tips. He questioned the sudden jump in the projected fund deficit to 16-26 billion pesos when SSS officials had stated under oath in congressional hearings this would amount to only 4 billion pesos.

Congress had passed Colmenares' bill unanimously having taken into account the 4 billion deficit and the ways by which the SSS could cover this by introducing needed reforms within the next five years, including improvement in collections and lessening administrative inefficiencies and costs. And if, despite all these internal reform measures the deficit remained, government is mandated to shore up the fund by means of a direct subsidy.

Indeed, if government can subsidize a dole-out program such as the Conditional Cash Transfer worth 62 billion pesos, why can't it provide a safety net for working people who are doing their share not only in contributing to the economy but to their own social security fund .

It has also been pointed out by various quarters that with the Aquino administration's boast of a 268 billion peso reduction in the government's budget deficit, it has more than enough leeway to back up the P56B for the pension hike plus the alleged projected P16-26B SSS deficit.

How convenient -- or deceptive as the case may be -- for SSS executives to belatedly come up with such a humongous figure of 16-26 billion pesos in fund deficit that would purportedly run the SSS fund to the ground in 13 years.

This report apparently stunned and scared Pres. Aquino -- during the four years the bill was being deliberated apparently he took no notice of it and its supposed dire implications -- into action.  He obviously took the SSS executives' word hook, line and sinker, enough for him to issue the politically unpalatable veto

Thereupon the entire Malacanang propaganda machinery was made to work overtime to spread the scare to the rest of the public, most especially to SSS non-pensioners who the Aquino administration  wants to dupe into believing that there will be nothing left for them when it is their turn to retire.

Big business honchos, top-caliber professionals in the financial sector and neoliberal academics and pundits who think government subsidy is anathema to the "free market" have swallowed the bankruptcy scare hook, line and sinker too.  One wonders why they have chosen to suspend their usual sharp analytical abilities in this instance.

The reason is not hard to fathom.  They regard the SSS not as a social fund but as a huge capital fund that one necessarily subjects to actuarial studies regarding its projected life.
Thus the point is reduced to how to ensure that more comes in than what goes out.

Yes, even as hundreds of billions of the SSS fund are a plump source of income for a train of fund managers, stock brokers, investment bankers, accounting firms and the like.

In the final analysis, the two sides to this issue amounts to a class divide. The less in life can't understand the reason for the presidential veto.  Those who can nonchalantly spend 2000 pesos and more on dinner-for-two at a fancy restaurant can't appreciate the clamor for a pension increase in their lifetime.  eof

Published in Business Wrold
1 February 2016

January 22, 2016

The Colombian peace process -- a model for the Philippines?

Ask a Filipino nowadays what he or she knows about Colombia and chances are the reply will be about how the reigning Miss Universe, the Philippines' Pia Alonzo Wurztbach, almost lost her crown to Miss Colombia, Ariadna Gutiérrez, after the emcee mistakenly announced the Colombian beauty to be the winner.

However there is much much more going on in this Latin American country of 48 million people. Of major significance nationally and regionally is the more than three-year-old peace negotiations between the Colombian government led by President Juan Manuel Santos and FARC (Revolutionary Armed Forces of Colombia) to resolve five decades of armed conflict with the largest of several guerrilla groups operating inside the country. A negotiated political settlement is aimed for by March of this year.

The Royal Norwegian Government (RNG) has been playing a pivotal role, together with the Cuban government, as facilitator in the Colombian peace negotiations. (The RNG is also third party facilitator in the peace talks between the Philippine government or GPH and the National Democratic Front of the Philippines or NDFP). Recently, the RNG brought its special envoy for the Colombian peace process, Mr. Dag Nylander, to Manila for him to share his experiences and to have a candid discussion with different groups and personalities here regarding the stalled GPH-NDFP peace negotiations. 

Nylander shared not just information but insight into what he sees as the key elements that have contributed to the big progress in the peace negotiations in Colombia.  He highlighted three of them: the "commitment" of the two sides to the peace process; the "inclusivity" of the process; and lastly, the "involvement" of international third parties.

Nylander said the Santos government clearly demonstrated its seriousness about entering into talks with FARC by no longer categorizing the revolutionary organization as a "narco-terrorist" (i.e. a "terrorist" group that engages in drug trafficking to fund its operations and gain adherents) in contrast to its predecessor, the Uribe government. President Santos, who was previously defense minister and a hardliner in dealing with  FARC, implicitly recognized the latter as a political group with political goals and "historical reasons" for its existence.  Nylander underscored, however, that Santos never "legitimized" FARC's armed struggle against the government.

For its part, Nylander said FARC clearly took a "risky" decision of entering into peace talks with its avowed enemy because it was convinced that there was a possibility for a "strategic solution". He said FARC concluded that they were being "taken seriously by their opponent". Considering the extremely bloody US-backed counterinsurgency programs implemented by a series of Colombian governments that have led to hundreds of thousands of civilians and tens of thousands of its members killed, FARC must have had plenty of good reasons, internal and external, to agree to the talks.  Nylander mentioned the strong push for talks by Cuban leader Fidel Castro and Venezuelan President Hugo Chavez, both of whom were considered staunch supporters of FARC.

Over six months of negotiations, a framework agreement was concluded that laid as the objective not just the end to the armed conflict but the resolution of its underlying causes. FARC did not get all of its proposed agenda included but settled on four out of five that was mutually agreed upon: land reform, political participation, illegal drugs trade, victim compensation and justice, and end of conflict.

Just last January 15, the two parties inked a particularly thorny "transitional justice" agreement that had to do with of justice and reparations to victims of one of the world’s longest-running conflicts.  This agreement held that FARC combatants and members would not be jailed for their "crimes" as rebels so long as they "confessed" to these through a tribunal that would be set up.  They would instead make "reparations" in some other way, eg doing landmine clearing in designated areas.

Interestingly, a bilateral ceasefire was not a precondition to the start of the peace talks.  It was the FARC that wanted a long-term ceasefire even before the negotiations were completed but the government has so far refused arguing that FARC would use the reprieve to consolidate itself. When FARC declared a unilateral ceasefire, government was eventually forced to reciprocate due to domestic and international pressure.  It stopped its aerial bombardments of FARC-controlled areas even as other military operations continued.

Constitutional amendments to accommodate the terms of the final peace settlement are not anathema as far as the Colombian government is concerned.  According to Nylander many adjustments are already being anticipated and prepared for to avoid legal and constitutional booby traps that could ensnare and sabotage the negotiations.
Even the language being used is meant to avoid the perception that FARC is negotiating its own surrender. The demobilization of the revolutionary army is called "laying weapons aside" and up for negotiations still is whether FARC's arms will be turned over to the government (that FARC still distrusts) or to an international third party and what protection will there be for its members once they are no longer armed. 

The sharing with Nylander certainly spurred this writer and peace advocate to study the Colombian peace process more closely. Will it result in far-reaching socioeconomic and political reforms requisite to the forging of a just and lasting peace or will its outcome be the pacification and cooptation of a formidable revolutionary organization that has sustained its armed struggle for more than half a century.

For its part, the GPH-NDFP peace talks are currently plagued by a clear lack of commitment primarily from the Aquino government .  The Aquino administration has shown its utter lack of political will to persist in the negotiations in the wake of twists and turns inherent in the process and to abide by inked bilateral agreements whether these be the framework agreement (The Hague Joint Declaration), safety and immunity guarantees (JASIG), or even just confidence-building measures (release of a certain number of political prisoners especially for humanitarian reasons such as the elderly or the sick.)
Aquino's adviser on the peace process, Sec. Teresita "Ging" Deles, and the GPH chief negotiator, Atty. Alex Padilla, have proven themselves as plain obstructionists by virtue of their ideologically-driven hard-line positions and propensity to throw a monkey wrench into the process; their lack of openness and creativity in working out solutions to impasses or even just sticky negotiation points; and their track record of torpedoing any attempts by concerned groups or individuals to restart the talks that have been virtually deadlocked for almost the entire Aquino presidency.

President Aquino should have fired both Deles and Padilla long ago for being incompetent non-performing government officials. That he has not done so places the onus of frozen GPH-NDFP peace negotiations squarely on his shoulders.  Eof

Published in Business World

18 January 2016