SSS profit growth to cool as retiree benefits increase
The Social Security System (SSS) expects a slower profit growth next year, as the higher pension payouts it promised to millions of retirees increase its expenses.
Robert Joseph de Claro, the fund’s president and chief executive, said at a news conference on Thursday that the state-run pension system for private-sector workers will set a higher target for contributions in 2026 to help offset the additional costs.
Still, those efforts will not be enough to match the pace of growth projected for this year.
The fund forecasts earnings to rise by just about 8 percent in 2026, well below the estimated 38 to 45 percent increase in 2025.
Even so, De Claro said that the system remains on track to report net income of P100 billion in 2025, despite the phased pension increase that will begin in September.
SSS reportedly netted P66.45 billion in the first half of the year, marking a 46.9-percent growth.
Broken down, contributions jumped by 14 percent to P187.4 billion during the period, while benefit payments edged up by 4.8 percent to P145.7 billion.
To sustain growth, the fund plans to expand its coverage to more overseas Filipino workers and employees in the construction industry, while also improving collection.
“We are fortunate enough that we still have a growing population,” De Claro said.
Last July, SSS announced an increase in pensions phased over three years starting this September, benefiting millions of pensioners without requiring an increase in member contributions.
By the end of the adjustment period, monthly payouts will have increased by approximately 33 percent for retirement and disability pensioners, and by 16 percent for death and survivor pensioners.
The reform will result in a reduction of fund life to 2049 from 2053. Officials aim to restore it to 2053 through stronger collections and wider coverage.
The system will also count on its income from investments to help offset the higher pension costs.
De Claro said gains from investments were expected to reach “a little more than P50 billion” in 2025—roughly half of its P100 billion profit forecast.
Victor Limlingan, an SSS commissioner, told the same news conference that the pension fund continues to invest in long-term, fixed-income securities to match the maturity profile of its liabilities.
SSS has also invested about P100 billion in the stock market, which was placed in “quality names which pay dividends.”
This strategy, Limlingan explained, allows the SSS to mitigate the impact of the ongoing easing cycle of the central bank on its earnings.
“We take this obligation very, very seriously. Because the hard-earned money of our contributors must be invested in quality companies,” he said.
