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iJlalacaitang
12 J a n u a r y

2016

HON. FELICIANO R. BELMONTE, J R .

Speaker
House of Representatives,
Batasan Hills, Quezon City
Dear Speaker Belmonte:
We respectfully transmit herewith the Veto Message of His Excellency,
President Benigno S. Aquino III, on enrolled House Bill No. 5842 entitled:
"AN A C T MANDATING A TWO THOUSAND P E S O {P2,000)
A C R O S S - T H E - B O A R D INCREASE IN T H E MONTHLY PENSION
WITH CORRESPONDING ADJUSTMENT O F T H E MINIMUM
MONTHLY PENSION UNDER THE SOCIAL S E C U R I T Y S Y S T E M ,
AMENDING F O R T H E P U R P O S E SECTION 12 O F R E P U B L I C
A C T NO. 1661, A S AMENDED, OTHERWISE KNOWN A S T H E
S O C I A L S E C U R I T Y ACT OF 1997,"
pursuant to the provisions of Article VI, Section 27 (1) of the 1987 Constitution.
Best regards.

Very truly yours.

PAQUITO N/OCHOA, J R .
E x e c u t i ^ Secretary

Copy Furnished:
Hon. Franklin M. Drilon
Senate President
Senate of tine Philippines
Pasay City
Undersecretary Bernardino E. Sayo
Presidential Legislative Liaison Office (House of Representatives)

MALACANAN PALACE

12

January

2016

THE HONORABLE SPEAKER

and Members of the House of Representatives
Quezon City
Ladies and Gentlemen:
Pursuant to Section 27 (1), Article VI of the Constitution, I am returning herewith the
enrolled bill H.B. 5842, entitled:
"AN ACT MANDATING A TWO THOUSAND PESO (P2,000) ACROSSTHE-BOARD INCREASE IN THE MONTHLY PENSION WITH
CORRESPONDING ADJUSTMENT OF THE MINIMUM MONTHLY
PENSION UNDER THE SOCIAL SECURITY SYSTEM, AMENDING
FOR THE PURPOSE SECTION 12 OF REPUBLIC ACT NO. 1661, AS
AMENDED, OTHERWISE KNOWN AS THE "SOCIAL SECURITY ACT
OF 1997,"
without my signature.
While we recognize the objective of the bill to promote the well-being of the country's
private sector retirees, we cannot support the bill in its present form because of its dire
financial consequences.
A Two Thousand Peso (P2,000) across-the-board pension increase with a
corresponding adjustment of the minimum monthly pension will result in substantial negative
income for the Social Security System. More specifically, the proposed pension increase of
F2,000.00 per retiree, multiplied by the present number of more than two (2) million
pensioners, will result in a total payout of P56.0 billion annually. Compared against annual
investment income of P30 billion - P40 billion, such total payment for pensioners will yield a
deficit of P16 billion - P26 billion annually.
Given this situation, the Social Security System will be constrained to draw from and
use its Investment Reserve Fund (IRF) to support the pension increase. Consequently, the
IRF will diminish over the years, eventually reaching zero by the year 2029. The stability of
the entire benefit system, whose present membership comprises about 31 million
individuals, will be seriously compromised in favor of two (2) million pensioners and their
dependents.
In view of these considerations, I am constrained to veto the abovementioned
enrolled bill.

THE PRESIDENT OF THE PHILIPPINES

(Sffice of tl)e JPres^itrent

iHalacairans
12 J a n u a r y

2016

HON. FRANKLIN M. DRILON

Senate President
Senate of the Philippines
GSIS Building, Financial Center
Roxas Boulevard, Pasay City
Dear Senate President Drilon:
We respectfully transmit herewith the Veto Message of His Excellency,
President Benigno S. Aquino III, on enrolled House Bill No. 5842 entitled:
"AN A C T MANDATING A TWO THOUSAND P E S O (P2,000)
A C R O S S - T H E - B O A R D INCREASE IN THE MONTHLY PENSION
WITH CORRESPONDING ADJUSTMENT O F THE MINIMUM
MONTHLY PENSION UNDER THE SOCIAL S E C U R I T Y S Y S T E M ,
AMENDING F O R T H E P U R P O S E SECTION 12 O F R E P U B L I C
A C T NO. 1661, A S AMENDED, OTHERWISE KNOWN A S T H E
S O C I A L S E C U R I T Y A C T OF 1997,"
pursuant to the provisions of Article VI, Section 27 (1) of the 1987 Constitution.
Best regards.

Very truly yours,

PAQUITOW. OCHOA, J R .
E x e 5 ^ v e Secretary

Copy Furnished:
Hon. Feliciano R. Belmonte, Jr.
Speaker
House of Representatives
Undersecretary Antonio Gallardo
Presidential Legislative Liaison Office (Senate)

MALACANAN PALACE
12

January

2016

THE HONORABLE SENATE PRESIDENT

and Members of the Senate
Senate of the Philippines
Pasay City
Ladies and Gentlemen:
Pursuant to Section 27 (1), Article VI of the Constitution, I am returning herewith
the enrolled bill H.B. 5842, entitled:
"AN A C T MANDATING A TWO THOUSAND P E S O (P2,000)
A C R O S S - T H E - B O A R D INCREASE IN THE MONTHLY PENSION
WITH CORRESPONDING ADJUSTMENT O F THE MINIMUM
MONTHLY PENSION UNDER THE SOCIAL S E C U R I T Y S Y S T E M ,
AMENDING FOR THE P U R P O S E SECTION 12 O F R E P U B L I C
A C T NO. 1661, A S AMENDED, OTHERWISE KNOWN A S T H E
S O C I A L S E C U R I T Y A C T OF 1997,"
without my signature.
While we recognize the objective of the bill to promote the well-being of the country's
private sector retirees, we cannot support the bill in its present form because of its dire
financial consequences.
A Two Thousand Peso (P2,000) across-the-board pension increase with a
corresponding adjustment of the minimum monthly pension will result in substantial negative
income for the Social Security System. More specifically, the proposed pension increase of
P2,000.00 per retiree, multiplied by the present number of more than two (2) million
pensioners, will result in a total payout of P56.0 billion annually. Compared against annual
investment income of P30 billion - P40 billion, such total payment for pensioners will yield a
deficit of P16 billion - P26 billion annually.
Given this situation, the Social Security System will be constrained to draw from and
use its Investment Reserve Fund (IRF) to support the pension increase. Consequently, the
IRF will diminish over the years, eventually reaching zero by the year 2029. The stability of
the entire benefit system, whose present membership comprises about 31 million
individuals, will be seriously compromised in favor of two (2) million pensioners and their
dependents.
In view of these considerations, I am constrained to veto the abovementioned
enrolled bill.

Copy Furnished:
Hon. Feliciano R. Belmonte, Jr.
Speaker
House of Representatives

THE PRESIDENT OF THE PHILIPPINES