SSS execs also got P46.2M in profit share

MANILA, Philippines—Former top officials of the Social Security System (SSS) received not only per diem allowances and directors’ fees but also millions of pesos in profit share from a private bank where the pension fund has a substantial investment, the Senate finance committee Wednesday said.

These SSS officials received profit share from Union Bank in addition to their earnings from sitting on the boards of a mining firm and a holding company where the SSS also has significant equity.

Last year, for instance, former SSS Chair Thelmo Cunanan pocketed P15.4 million in profit share from Union Bank, according to Sen. Franklin Drilon, chair of the Senate finance committee.

Drilon said the profit share was on top of the P1.56 million in per diem and other forms of allowance Cunanan received from the publicly listed bank.

In the same year, former SSS President Romulo Neri received the same amount of profit share and got P1.4 million in per diem. Sergio Apostol, now a Leyte representative, also received the same amount of profit share.

Drilon’s committee arrived at the summary of compensation of the SSS officials based on documents submitted by private companies carrying significant investments from the pension fund. The Inquirer obtained copies of the documents.

Cunanan statement

In a statement, however, Cunanan Wednesday said Drilon “got his facts and figures wrong,” pointing out that he had remitted to the SSS Treasury Department half of the amount he received from Union Bank.

Cunanan said the remittances consisted of P4.4 million in 2006, P5 million in 2007, P3.9 million in 2008 and P7.7 million in 2009.

He said he and other SSS executives on the Union Bank board were entitled to profit share because they “took on immense responsibilities, as well as risks, over the bank’s assets and were accountable to the regulatory body, the Bangko Sentral ng Pilipinas, and the bank’s stakeholders.”

“I pray that this statement clarifies the matter of profit sharing from said bank and our relationship with the SSS,” Cunanan said.

In a letter to Drilon dated Aug. 31, Union Bank senior vice president Fe Macalino outlined the per diem allowances and profit share earned by Cunanan, Neri and Apostol from the bank from 2007 to 2009.

Apostol received from Union Bank a total of P25.1 million in profit share and per diem allowance from 2008 to 2010.

Drilon earlier said that the combined P46.3 million that Cunanan, Neri and Apostol got in director’s fees in 2009 was nearly half the P100.4-million dividend the SSS received from Union Bank that year.

Biggest earner

Among the three, Cunanan received the biggest amount of compensation from Union Bank, Philex Mining Corp. and First Philippine Holdings Corp. (FPH).

Cunanan collected a minimum of P132.6 million from the three private firms from 2007 to 2010. He joined Philex in 2001, FPH in 2004 and Union Bank in 2005.

A Senate finance committee document said the computation excluded “compensation received by Cunanan from other investee companies where he sat as member of the board of directors.”

Neri got at least P44.2 million from Philex and Union Bank from 2008 to 2010.

The earnings did not include those the three former SSS officials got from the pension fund itself, Drilon said.

“This is higher than the MWSS bonuses,” Drilon told the Inquirer, citing the 25 types of bonuses at the Metropolitan Waterworks and Sewerage System.

“The fiduciary duty of Mr. Cunanan and the SSS commissioners is a strong basis for requiring them to turn over to the SSS the amounts that they have received from these investee corporations,” the senator added.

The Senate Wednesday passed a resolution urging President Benigno Aquino III to suspend the release of allegedly excessive and unwarranted bonuses, allowances and incentives to members of the board of government-owned and –controlled corporations (GOCCs).

At the FPH, Cunanan acquired P6.3 million in bonuses, P660,000 in per diem allowance before tax from 2008 to 2010, according to the letter by company president Elpidio Ibañez dated Aug. 25.

Previous committee hearings found that among SSS officials Cunanan had collected the biggest amount from Philex, in which the pension fund has around P14.3 billion in investments.

Stock option

Documents furnished by Philex to the committee showed that Cunanan received P66.6 million by exercising his stock option in the company from 2007 to 2010.

SSS Commissioner Sergio Ortiz-Luis received P6.3 million from Philex in per diem, stock option and other forms of compensation from 2009 until this year.

Drilon called on the present SSS leadership to “take steps in order to recover these funds.”

The senator noted that like the Government Service Insurance System, the SSS was “peculiar” in the sense that it handles—not government funds—but contributions of members from the private sector.

“So the care required of the trustees are extraordinary under the law,” Drilon said.

“They are required to exercise extraordinary diligence, a standard much higher than the diligence required of members of the board of ordinary GOCCs,” he added.

Palace review

Malacañang is reviewing the compensation packages of GOCCs after the Senate inquiry revealed unusually huge salaries, bonuses and other perks even in underperforming government firms.

“Right now, the (Department of Budget and Management) and the (Department of Finance) are studying the ways, reviewing the different salaries and the compensation allowances of the various GOCCs. They’ll be coming out with a report on the matter,” presidential spokesperson Edwin Lacierda said at a news briefing Wednesday.

Asked if an executive order stopping the huge compensation packages would be released, Lacierda said, “It is still being studied.” –Christian V. Esguerra, Philippine Daily Inquirer with a report from Norman Bordadora