NATION | SSS wants stake in power, water sectors

The Social Security System earlier floated the possibility of investing in toll roads as well as a mandatory placement on public-private partnerships. Philstar/File photo | By Prinz Magtulis 

MANILA, Philippines - The search for additional funds to finance higher pension continues for Social Security System (SSS), which, this time, wants a seat in private utilities both to raise money and to have a say in rate hikes.

 

In a statement on Friday, the pension fund for private workers said it is eyeing to own 25 percent of any utility corporations to generate additional income.

 

"SSS should seek to bring this concept of social justice further by maximizing the use of SSS funds to gain representation in corporations involved in basic utilities such as electricity and water," SSS chair Amado Valdez said.

 

"This gives SSS members a louder voice during deliberations on water and power rate hikes, since these have a significant and direct impact on the lives of workers and SSS pensioners," he added.

 

This marked the latest in a string of suggestions from SSS, which has already vowed to push through with the pension hike of P2,000 in a staggered basis as promised by President Rodrigo Duterte.

 

The agency earlier floated the possibility of investing in toll roads as well as a mandatory placement on public-private partnerships.

 

It also came after Duterte himself said he would welcome more foreign players in the energy and telecommunications industries to make them cheaper and more efficient.

 

Sought for comment, Astro del Castillo, managing director at First Grade Holdings Inc., said it is not a good idea for the government to enter the utility sector.

 

"I think they should really think about all these suggestions first. Revisit them before making any action," Del Castillo said in a phone interview.

 

"Pension fund should not be in the utility business. That is not their job. That could scare away other investors," he added.

 

For one, Del Castillo said the agency's plan would duplicate the government's role as a regulator.

 

By law, the Energy Regulatory Commission was given the power to approve rate adjustments in power, while the National Water Resources Board (NWRB) does the same for water.

 

The STAR sought for comment from the Manila Electric Co. (Meralco), the country's largest power distributor, but it is yet to respond as of this post. 

 

At 25-percent stake, Del Castillo said it guarantees SSS one board seat in any utility company.

 

For the first nine months, SSS investment portfolio amounted to P470.14 billion, the bulk or 39 percent worth P180.46 billion of which were invested in state bonds.

 

For Valdez, this means their 30 million members having a direct say on power rates, considered one of the highest in Asia.

 

"If rate hikes are justifiable and necessary, then SSS members will still benefit since the agency will receive higher income from its 25 percent share in the earnings," he said. 

 

Both water and power industries are already open to market competition by law. Power, in particular, started opening up after the country suffered a power crisis in 1997.

 

To this day, the government is still not yet done disposing off power assets and debts, which Finance Secretary Carlos Dominguez earlier said he wanted finished in two years.

 

"It is already a given that SSS serves as a tool for social justice through the cross subsidies it provides – the young subsidize the old, the healthy subsidize the sick, those earning more subsidize those earning less...," Valdez said.