SSS version of DAP

If PNoy has his Disbursement Acceleration Program, the Social Security System has its own version of DAP—disaster assistance program for victims of natural and man-made calamities.

In fact, SSS has announced last Friday for victims of Typhoon Glenda a new DAP of salary and house repair loans and advance pension payments. Under this special program, SSS is waiving the loan service fees, reducing to 6 percent the interest rate of house repair loans, and allowing affected pensioners to advance their pensions for 3 months. These are the same as interest-free pension loans.

As if these members borrow only for the sake of borrowing, SSS suggested that they “can use their loan proceeds and advance pensions for food, water, and medicines, and to pay for other expenses resulting from the damages caused by Typhoon Glenda.”

Once again, SSS has demonstrated that it has converted itself from a pension program into a de facto DAP. Doing practically nothing to improve its pension program, SSS has refocused its services into providing loans and granting disaster assistance.

In 2013 alone, SSS disbursed P1.46 billion in loans – at an average amount of P18,250 – to more than 80,000 members who were victims of typhoons Labuyo, Santi, Yolanda, Maring, Bohol earthquake, and the Zamboanga City siege.

But despite the severity of the Zamboanga disaster, only an average of P13,320 was lent to 5,030 borrowers for a total of P67 million.

The 80,000 DAP beneficiaries are few compared to the 1.6 million pensioners who got an increase of 5 percent only for the first time in 7 years last month. The increase will be released in August.

Interestingly, 13,746 pensioners received advance pensions at an average of P16,368.40, which totaled P225 million.

In the first half of 2013 alone, SSS released a total of P14.8 billion in salary and educational loans to 792,000 members. By the end of 2013, the size of this debt assistance program to members has grown to P54.0 billion from the previous year’s P45.0 billion. They represent 15.4 percent and 14.3 percent, respectively, of the reserves.

By any interpretation, these levels exceed the limit that the Social Security Law has set – 10 percent of the Investment Reserve Fund. It is a limit that has been set ever since salary loans were allowed as a form of investment.

Understandably, SSS bosses have found it difficult to comply with this legal provision because members demand to receive a loan once they qualify and when they apply for it. Thus, they have chosen to please members by complying with their loan demands in times of disasters and even during ordinary but special occasions such as school opening days and Christmastime.

SSS bosses have never declared that SSS could only lend up to the limit set to it by law.

As a result, they have been violating the SSL.

But the SSL and any and all of its provisions have to be complied with. Imagine for instance, if the investment limit in stocks is exceeded. Everyone from the marginalized self-employed member to the highest paid officer of corporations would be demanding the dismissal of SSS bosses and their criminal prosecution for violating this specific fiduciary responsibility.

Any SSS DAP loan amount is now being released in excess of the limit and thus in violation of the SSL. But while PNoy is now being impeached by militant groups for his DAP, SSS bosses are not even reminded of their violation.

Meantime, the welfare of pensioners is being jeopardized.

In the first place, does SSS know and care how it manages its loans program?

Consider the Commission of Audit Report dated June 13, 2013. Only a Qualified Opinion was issued by its Supervising Auditor who stated that “the accuracy of the Receivable – Member Loans … of P54.096 billion…cannot be ascertained due to … Unposted collections of P4.605 billion; and the variance between the general and subsidiary balances amounting to P2.364 billion.”

Was it made clear to borrowers that they have to pay back their loans? The same COA Audit report stated that the SSS salary loans have an accumulated impairment loss of P3.667 billion.

How much SSS loses in its regular loans program and the special DAP loans, no one has yet computed. But for sure, the foregone interest income and the huge operating costs of loans granting, collection and posting all add up negatively to SSS revenues.

Without these regular loans and special DAP loans, the unfunded liability of SSS would be less. It would be able to grant higher pensions.

But as PNoy must now stop his DAP, so must SSS also discontinue offering special DAP loans.

Let Congress examine and allocate line-by-line the projects that PNoy would be submitting. Also, let a new and different government agency handle our national disaster assistance program. This DAP agency should be responsible for dispensing all types of assistance during calamities. It should also take over the regular SSS salary loans program.

Once unburdened of its loans program, SSS could focus in its raison d’etre of granting adequate pensions to all Filipinos. –Horace Templo, Manila Standard Today