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#(fice of tl)e S^vz^ihent of tje jpijilippinesi

iJlalacaitang

12

Januar y

2016

HON. FELICIANO R. BELMONTE, JR.

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 AC T MANDATING A TWO THOUSAND PESO {P2,000) ACROSS-THE-BOARD INCREASE IN THE MONTHLY PENSION WITH CORRESPONDING ADJUSTMENT OF TH E MINIMUM MONTHLY PENSION UNDER THE SOCIAL SECURITY SYSTEM, AMENDING FO R TH E PURPOSE SECTION 12 OF REPUBLIC ACT NO. 1661, A S AMENDED, OTHERWISE KNOWN A S TH E SOCIAL SECURITY ACT OF 1997,"

pursuant to the provisions of Article VI, Section 27 (1) of the 1987 Constitution.

Best regards.

Copy Furnished:

Hon. Franklin M. Drilon Senate President Senate of tine Philippines Pasay City

Undersecretary Bernardino E. Sayo

Very truly yours.

PAQUITO N/OCHOA, JR.

Executi^ Secretary

Presidential Legislative Liaison Office (House of Representatives)

MALACANAN PALACE

MANILA

THE HONORABLE SPEAKER

12

Januar y

2016

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) ACROSS- THE-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

Januar 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 AC T MANDATING A TWO THOUSAND PESO (P2,000) ACROSS-THE-BOARD INCREASE IN THE MONTHLY PENSION WITH CORRESPONDING ADJUSTMENT O F THE MINIMUM MONTHLY PENSION UNDER THE SOCIAL SECURITY SYSTEM, AMENDING FO R TH E PURPOSE SECTION 12 O F REPUBLIC ACT NO. 1661, A S AMENDED, OTHERWISE KNOWN A S TH E SOCIAL SECURITY ACT OF 1997,"

pursuant to the provisions of Article VI, Section 27 (1) of the 1987 Constitution.

Best regards.

Very truly yours,

PAQUITOW. OCHOA, JR.

Exe5^v e Secretary

Copy Furnished:

Hon. Feliciano R. Belmonte, Jr.

Speaker House of Representatives

Undersecretary Antonio Gallardo

Presidential Legislative Liaison Office (Senate)

MALACANAN PALACE

MANILA

12

Januar y

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 ACT MANDATING A TWO THOUSAND PESO (P2,000) ACROSS-THE-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 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, enrolled bill.

I am constrained

to

veto the

abovementioned

Copy Furnished:

Hon. Feliciano R. Belmonte, Jr.

Speaker House of Representatives

THE PRESIDENT OF THE PHILIPPINES