‘As far as we can see only plain lack of
compassion stands in the way.’
We usually stand poles apart from militant groups when
anything related to business and the economy is on the public agenda. But this
time, on their proposal that the Social Security System provide help to members
who are laid off, hopefully temporarily, we are in agreement with them. It is
fair. It is socially beneficial. It also makes economic sense.
The militants’ proposal is, in fact, nothing new. During the
dollar crisis in the early 1980s when the Philippines had to declare a
moratorium on debt payments, the economic downturn was far more severe than what
is projected from the current global slowdown. That period was characterized by
layoffs not seen since the Japanese occupation period.
The SSS under then administrator Gilberto Teodoro (father of
the current defense secretary) immediately opened a window from where members
could borrow up to three times the last salary they received.
So what’s keeping the current SSS administration, led by
Romulo Neri, from doing the same?
The SSS funds are after all the members’ money. It is but
fair that the funds be used to help them before anybody else, certainly before
the corrupt administration of Gloria Arroyo which is trying to grab P12 billion
of SSS money for its so-called stimulus package.
Borrowed money equivalent to three months’ salary may not
provide much cushion for the family of the newly unemployed. But that least it
means enough to live by for the next three months while the breadwinner tried to
get a new job. The money could also be used to start small livelihood projects.
As a demand stimulus, loans to members – assuming an P12
billion outlay - will have far more reach than the government’s "cash transfer"
scheme for which P3 billion is allotted under the 2009 budget. The loans,
moreover, will not require any taxpayers’ money.
From the standpoint of the SSS itself, the loans could be
carried as part of its investment portfolio. An interest rate of 8 percent is
nothing to sneeze at this time when SSS earnings are suffering from its battered
stocks and bonds portfolio.
Neri has been talking about an 8 percent yield from its
planned contribution to Gloria’s stimulus package. If he is prepared to lend at
8 percent to Gloria, why cannot he lend the same to his own members? Because the
contribution to the stimulus package will carry the sovereign guarantee of the
government and, therefore, is risk free? But lending to members is also
virtually risk free. If they default on their loans, payments will automatically
be deducted from the benefits they will receive upon retirement.
