SSS net income down 28% in H1 on higher benefit payouts

MANILA, Philippines — The Social Security System (SSS) posted a 27.8-percent drop in net income in the first half as a surge in benefit payments and other expenses outpaced growth in member contributions and investment income. Latest financial statements released by the state-run pension fund showed net income fell to P48 billion as of end-June from P66.5 billion in the same period last year. The decline came as total expenses climbed 26.8 percent to P206.8 billion, largely driven by benefit payments, which rose 19 percent to P173.5 billion. The higher payouts coincided with the SSS’ rollout of its first-ever annual pension increase, which is being implemented in phases until 2027 without requiring an increase in member contributions. Under the program, retirement and disability pensioners will receive a cumulative 33-percent increase in monthly pensions by 2027, while death and survivor pensioners will receive a total 16-percent increase. New pension adjustments are scheduled every September. But in response to the economic impact of the Middle East war, SSS moved the release of the second tranche beginning in June, resulting in about P6 billion in additional pension payments through August. The pension fund also booked P27.4 billion in non-cash expenses, more than double the P12 billion recorded a year earlier. Personnel services rose 8.8 percent to P4.3 billion, while maintenance and other operating expenses increased 10 percent to P1.5 billion. Financial expenses were largely unchanged at P165.8 million. The increase in expenses more than offset gains in the SSS’ revenue base. Member contributions grew 6.9 percent to P200.3 billion, while investment income jumped 37.6 percent to P33.2 billion. Despite the decline in earnings, the SSS continued to expand its balance sheet as total assets grew 17.3 percent to P1.3 trillion as of end-June. INQ