Effective Pension Scheme For Phl Senior Citizens Sought

Three million — that’s the number of senior citizens who do not have any form of pension out of the eight million of them in the country. Most of them come from the informal sector who do not have regular income or contributions, or who do not have any source of income and are dependent on support from their families.

This is what the Policy Forum on Financing a Universal Social Pension held in Quezon City yesterday revealed.

Organized by the Coalition of Services of the Elderly (COSE) and the Office of Sen. Risa Hontiveros, the forum gathered several community organizations of older persons, representatives from various national government agencies and local government units, as well as other civic society organizations to discuss the feasibility and implications of creating a universal social pension for the benefit of the country’s eight million senior citizens.

A universal social pension is a monthly stipend that will be given to all individuals aged 65 and above regardless of employment, social status, or pension status. It will be given on top of the contributory pension that members of the Social Security System (GSIS) or the Government Service Insurance System (GSIS) already receive. It is also different from the health insurance that the Philippine Health Insurance Corp. already provides to its members.

“There has been a clamor for a universal social pension law since we started our campaign so it was sad that it did not happen in the 17th Congress. Our goal now is for this policy to be signed into law in the first regular session of the 18th Congress, thus we initiated this policy forum to find concrete, feasible and sustainable ways of financing the universal social pension law,” Emily Beridico, COSE executive director, said. 

Hontiveros, author of one of the bills in the Senate that seeks to establish a universal social pension of the elderly, was the guest of honor and keynote speaker in the policy forum.

“Like many Filipinos po, I take care of my senior citizen mother. It has its challenges, but I am thankful for the opportunity to take care of her. Hindi lahat ng mga pamilya ay may ganitong pagkakataon,” Hontiveros said.

“The reality is millions of senior citizens are indigent. Millions of Filipino families struggle to meet the demands of caring for the elderly. Gusto man nila, mahirap. The struggle is at least on two fronts: ‘Yung ating kakayahan na alagaang mabuti ang ating mga senior citizens and the fact that in the most vulnerable areas, family low income forces senior citizens to contribute to household expenses when their pensions should be spent on themselves,” Hontiveros added.

According to Hontiveros, the current Expanded Senior Citizens Act of 2010, which covers a monthly stipend of P500 to augment the daily subsistence and other medical needs of senior citizens, is no longer enough to cover daily expenses on average and must keep pace with inflation to relevantly account for the needs of the elderly.

She also pointed out that the current pension system for the elderly is inefficient and excludes hundreds of thousands of senior citizens. She said for these reasons, she filed the Lingap Para Kay Lolo at Lola Act, which seeks to amend the current social pension and establishes a universal social pension where the monthly stipend is double the P500 to P1000. 

Under the proposed act, senior citizens who are 65 years old and above will automatically qualify for the pension. Senior citizens, who are 60 to 64 years old and are classified as indigent, will also benefit. The bill targets inclusion of over seven million senior citizens for a monthly stipend of P1,000.

Her proposal will cost P85.6 million annually, which accounts for 0.40 percent of the country’s gross domestic product (GDP) or 2.3 percent of government expenditure.

Hontiveros’ bill is one of four that have been filed in the Senate of the 18th Congress. Senators Sonny Angara, Francis Pangilinan, Nancy Binay and Grace Poe have also filed their separate versions of a universal social pension bill.

Aura Sevilla, an independent researcher who served as a resource speaker at the policy forum, said the four bills differ in terms of the design mechanism employed in giving out the universal social pension. She is the co-author of the 2017 study Feasibility of a Universal Social Pension in the Philippines, which was spearheaded by COSE and HelpAge International, a British non-government organization that advocates for senior citizens' rights.

According to Sevilla, there are currently four kinds of design mechanisms for a universal social pension:

1. Universal, which seeks to distribute the social pension regardless whether or not an individual is a recipient of a monthly contributory pension;

2. Pension-tested,which seeks to distribute the social pension only to individuals who have no monthly contributory pension;

3. Pension-tested with taper, which seeks to distribute the social pension regardless whether or not an individual is a recipient of a monthly contributory pension, but reduces the amount of social pension for every input they make to the contributory pension; and

4. Means-tested,which seeks to distribute the social pension but only to those who have been certified as lacking the means to support themselves, i.e. those who are actually experiencing chronic poverty.

According to Sevilla, Senate Bill (SB) No. 133, authored by Angara, and SB 259, authored by Pangilinan, uses a pension-tested mechanism that covers all senior citizens aged 60 and above who are not recipients of a monthly contributory pension — a total of 6.3 million individuals.

The bills provide for a P1,000 monthly stipend and will have an annual cost of P76.5 billion. This accounts for 0.36 percent of the country’s GDP and 2.03 percent of the government expenditure.

In Binay’s SB 570, individual aged 60 and above who do not receive any form of contributory pension, as well as individuals receiving only P3,000 and below from a contributory pension will be entitled to the universal social pension.

Her proposal has the most number of target beneficiaries at 7.2 million, who will each receive P1,000 as monthly stipend. With an annual cost of P86.7 billion, this will carve 0.41 percent of the GDP or 2.3 percent of government expenditure.

Finally, Poe’s SB 126, which also covers individuals aged 60 and above who do not receive a monthly contributory pension, the monthly stipend will be the largest at P1,500. This will cost the government P114.7 billion, which translates to 3.04 percent of government expenditure or 0.54 percent of the GDP.

According to Sevilla, while the ideal design mechanism for a universal social pension remains debatable, for her, the design that will address the most number of problems that senior citizens face is a pension-tested mechanism.

“In a pension-tested design, binibigyan mo muna ng pension ‘yung lahat ng walang contributory pension. We have strong evidence that those who have no monthly contributory pension are those that are in the lowest quartile. Meron diyan sigurado na walang pension like SSS, probably because hindi sila naghuhulog gaya ng mga doktor or abogado. Pero kakaunti lamang ‘yung mga taong ito. Mas marami ka pa ring maco-cover na nasa mga vulnerable at informal sectors gaya ng farmers and fisherfolk, na maco-cover mo kaagad. Mas madali din siyang i-implement kaysa sa means tested, which is depende sa tumitingin kung mahirap o hindi,” Sevilla told The Philippine STAR on the sidelines of the policy forum.

Another argument that Sevilla gave in favor of a pension-tested design is the recent P1,000 increase in the SSS monthly stipend and the upcoming additional P1,000 increase on top of that, which all the more rationalizes the need to prioritize individuals who do not receive any monthly SSS or other contributory pension.

The idea of establishing a universal social pension system is not original to the Philippines. Several countries have already implemented their own universal social pension systems, each with varying albeit positive results. In Southeast Asia, universal social pensions in Vietnam, Timor Leste, Thailand and Brunei have already narrowed down the pension gap significantly.

If implemented in the Philippines, Hontiveros believes that the universal social pension will help to ensure that all Filipinos live their own age with dignity and autonomy.

“Income security gives our elderly the chance to function without relying on their families, while the families are able to focus their financial expenses in improving the quality of life of all their members. Empowering our elderly through universal social pension will also contribute to the reduction of poverty and inequality, provide transformative support to ordinary families, and further stimulate the economy,” Hontiveros said.