Michelle Remo
Philippine Daily Inquirer

The Government Service Insurance System (GSIS) and the Social Security System (SSS) have been urged to consider raising the monthly pension received by its retired members as one way to help stimulate household spending given a slowing economy.

Economic Planning Secretary Ralph Recto said the proposal was made at a recent meeting of the Development Budget Coordination Committee (DBCC) to come up with measures to boost the economy next year.

If the GSIS and the SSS would increase the pension for its retired members, Recto said, this would be one form of fiscal stimulus. No specific amount of increase was specified.

Recto said the national government has come up with its own fiscal stimulus package to help pump-prime the economy next year and state-owned firms like the SSS and the GSIS were being asked to do their share.

The country’s chief economist said, however, that the economic team would not force the two pension fund managers to accept the proposal if they felt this would put their financial health at risk.

Finance Secretary Margarito Teves said the SSS and the GSIS were being encouraged to study how increasing the pension would affect the actuarial life of their funds.

“They should, of course, first study this,” Teves told reporters. “But if the proposal proved to be feasible, then they are encouraged to implement it. It is a good proposal.”

In an earlier statement, the GSIS said the actuarial life of its fund was estimated to last until 2055. On the other hand, the actuarial life of the SSS fund is estimated to last until 2036.

At present, pensioners of the GSIS receive an average of P7,800 a month.

Officials said the government was keen on looking for ways to boost the economy next year, when the global economy is seen to slide into a recession.

In its World Economic Outlook, the International Monetary Fund said the global economy would likely grow by 2.2 percent next year. Under its definition, a global growth of less than 3.0 percent constitutes a recession.

The Philippines is not expected to be spared from the ill-effects of the crisis as the United States and Europe are two of its biggest export markets. Many overseas Filipino workers are also in those parts of the world.

Weakening global demand for imports and labor is seen to drag down growth even of emerging economies like the Philippines, which is highly dependent on consumption to drive its economy.

The national government has proposed a P1.4-trillion national budget for 2009, higher than the P1.236 trillion set for this year, to take into account the need to spend more on infrastructure and social services.

Teves said even state-owned firms would be asked to increase spending on programs and projects that help to spur economic activity. If the SSS and the GSIS are being asked to consider raising pensions, government-owned banks are being encouraged to boost lending activities.