Posted on December 28th, 2008
The prospects of increasing the monthly pensions of the Government Service Insurance System (GSIS) and the Social Security System (SSS) pensioners are being studied. Although this proposal isnâ€™t entirely to alleviate the financial situation of the pensioner-members, but rather to serve as a stimulus to encourage more spending in the household and somehow give a push to the countryâ€™s slow moving economy.
Secretary Ralph Recto of the Economic Planning said that if the GSIS and the SSS would increase the pensions of their retired members, it could serve as a form of fiscal stimulus which can help boost the economy next year. The proposal was made during a recent meeting of the Development Budget Coordination Committee (DBCC), although no specific amount of increase was specified in the proposal.
However, the proposal is not exactly compulsory for the two agencies to follow. The two pension fund managers are advised to accept the proposal only if they believe it will not put their financial health at risk. Finance Secretary Margarito Teves said they (SSS and GSIS) were being encouraged to study how the increased pension can affect the actuarial life of their funds, â€œif the proposal proved to be feasible, then they are encouraged to implement it. It is a good proposal,â€ Teves added.
This is all part of governmentâ€™s effort to look for ways to boost the economy next year, when the global economy is seen to slide into a recession. The national government has come up with its own fiscal stimulus package to push the economy next year. State-owned firm like the SSS and the GSIS were being asked to do their share. Government-owned banks on the other hand are being encouraged to boost their lending activities.
The International Monetary Fund (IMF) reported in its World Economic Outlook that the global economy would likely to grow by 2.2 percent next year. A global growth rate of less than 3.0 percent is said to constitute recession.