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DMCI Homes completes construction of Taguig condominium

DMCI HOMES has completed a condominium project in Taguig City 10 months ahead of its July 2020 deadline.

DMCI Homes operator DMCI Project Developers, Inc. said in a statement late Friday it is now done with the construction works for its Maple Place residential condominium project in Acacia Estates, Taguig City.

“DMCI Homes declared the completion of the Boutique Hotel architecture-inspired project following the delivery of the last structure in the three-building mid-rise development, Spruce, last month,” it said.

The other two buildings of the 1.23-hectare Maple Place in Taguig City were also completed earlier this year.

DMCI reported in June it had already finished 10 condominium projects in the first half of the year, namely: Alea Residences’ Darma and Surya buildings in Bacoor City, Cavite; Torre De Manila in Manila; Zebrina building of Calathea Place in Parañaque City; Bluebird building of Bristle Ridge in Baguio City; and Fairway Terraces in Pasay City.

Completing the 10 are the Linden and Aspen buildings of Maple Place and the Adelfa and Abaca buildings of Ivory Wood, both mid-rise projects located in Acacia Estates, Taguig City.

DMCI Homes is allocating P17.9 billion for capital expenditures this year, 23% up from a year ago, as it wants to take on an aggressive expansion in and out of Metro Manila to reach Cebu and Davao.

The company booked a core net income of P1.19 billion in the first half, up 5% from a year ago, due to lower project development costs.

Its parent, diversified engineering conglomerate DMCI Holdings, Inc., meanwhile dropped 22% to a net income of P6.7 billion due to weaker revenues from its coal mining and nickel mining businesses. — Denise A. Valdez

AUB gets second-highest rating

ASIA UNITED Bank Corp. (AUB) was awarded the second-highest credit rating by a local debt watcher due to its continuous profitability and strong management support.

The listed bank received a PRS Aa plus (corp.) credit rating with a stable outlook from Philippine Rating Services Corp. (PhilRatings), based on a statement by the latter over the weekend.

The PRS Aa rating means AUB only differs “to a small degree” versus those rated the top “PRS Aaa” rating, and the “plus” means it is further qualified. Having a stable outlook also means its credit rating may likely hold for the next 12 months.

“The issuer rating takes into account AUB’s: a) highly-experienced management; b) competitive strategy, which is in line with its growth targets; c) its robust profitability, backed by sound management of expenses and continuous growth in interest income; and d) satisfactory funding profile,” PhilRatings said.

It added it also considered the favorable outlook of the banking industry despite the generally slower growth of the domestic economy.

PhilRatings said the bank’s chairman and chief executive officer, Abraham T. Co, has multiple years of experience in the banking and finance sector, making him a trustworthy leader of the company. AUB President Manuel A. Gomez was also noted for his two decades worth of experience in the industry.

AUB’s balance sheet was commended by the debt watcher, saying the bank’s deposits accounted for 92.6% of its total liabilities last year. The share of current and savings accounts (CASA) to total deposits also ended at 75% in 2018.

“Forecast shows that CASA will continue to comprise bulk of the bank’s deposits, going forward,” it said.

The bank’s financial results in the first half of the year was also accounted for by PhilRatings. It said the 63.3% rise in its net income to P2.6 billion in the six months to June reflects the company’s continuous profitability. It also recorded a 25.1% increase in net interest income to P4.5 billion and 68.4% jump in other operating income to P1.5 billion during the same period.

“Over the projected period, AUB is well-positioned to sustain its performance as interest income will remain the primary growth driver, as the bank intensifies its commercial and consumer lending activities,” the debt watcher said.

“AUB will continue to anchor its competitive strategy on its modern technology platform, expanding branch network, and highly-experienced management team,” it added. — Denise A. Valdez

China buys more US soybeans, record volume of pork ahead of trade talks

CHICAGO — Chinese importers stepped up purchases of U.S. agricultural goods ahead of high-level trade talks in Washington, including another wave of soybean deals and the country’s record largest weekly purchase of American pork, U.S. data showed on Thursday.

Private exporters sold 398,000 tonnes of U.S. soybeans to China, the Department of Agriculture (USDA) reported via its daily sales reporting system that tracks large purchases. It was the second daily “flash sale” of soybeans this week to the world’s top soybean importer.

USDA also confirmed a net 1.18 million tonnes in soybean sales to China in the week ended Oct. 3 and record-large sales of pork, including 18,810 tonnes for shipment this year and 123,362 tonnes for shipment in 2020.

The flurry of deals came ahead of high-level US-China trade talks in Washington that started on Thursday aimed at ending a 15-month trade war that has rattled global markets and slashed US farm product exports to the world’s top commodities importer.

US pork sales to China, the world’s biggest hog and pork market, had been largely disappointing this year following forecasts for massive purchases. Chinese domestic prices are soaring as the deadly African swine fever virus has decimated the country’s hog herd, tightening supplies of China’s favorite meat.

“Nobody’s ever seen these kinds of (pork sales) numbers,” said Bob Brown, an independent US livestock analyst. “Our prices right now are pretty modest especially compared to Europe in particular, which is their other big supplier.”

China has imposed steep tariffs on imports of American pork in retaliation for US duties on Chinese goods, but US prices still look attractive despite the current 72% tariff, traders said.

US soybean sales have also accelerated ahead of the talks in Washington this week in at least four waves of active buying since early September. Beijing awarded some importers waivers to buy US beans that allow imports without steep retaliatory tariffs. China imported more than 13 million tonnes of US soy in the 2018/19 marketing year that ended Aug. 31 and has bought nearly 5 million tonnes more in the current season, according to USDA data.

The sales, however, are far short of the 30 million tonnes or more that China imported annually from the United States before the trade war. — Reuters

How PSEi member stocks performed — October 11, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, October 11, 2019.

 

POGO tax compliance improving in September

THE Bureau of Internal Revenue (BIR) said it expects tax collections from Philippine Offshore Gaming Operators (POGO) to increase further following the closure of the first firm found to be evading taxes.

Deputy Commissioner for Operations Arnel SD. Guballa said withholding tax collections grew to P1.6 billion as of August, rising about P200 million from the P1.4 billion initially reported initial report. September totals will only be released this month but Mr. Guballa said an improvement is already apparent.

“Our collection is improving because they know that we’re doing enforcement. Kasi sabi ko nag-lapse na yung dialogue with them (the time for dialogue has lapsed). We sent them notices and they are not complying, so we did the raid,” Mr. Guballa told reporters last week.

Citing data collected from PAGCOR and other agencies, he said the official count of foreign workers is 108,914, in 218 POGO offices across the country.

He also said the BIR has seen more compliance in withholding taxes remittance by the industry after the shutdown of Great Empire Gaming and Amusement Corp. (GEGAC).

Days after the closure, BIR lifted GEGAC’s suspension after it agreed to settle a total of P1.3 billion within the year and assured that it will comply with registration requirements as well as withhold taxes from its foreign workers.

BIR Commissioner Caesar R. Dulay said that he expects POGO firms to voluntarily comply and should not wait to be closed down.

Finance Secretary Carlos G. Dominguez III said BIR’s tax enforcement efforts will ultimately help other agencies such as the Bureau of Immigration and the Department of Labor and Employment (DoLE).

“You know, the work of BIR is going to help PAGCOR, it’s going to help the Bureau of Immigration, its going to help DoLE,” Mr. Dominguez said.

Mr. Dominguez has estimated foregone revenue from POGO non-compliance at about P2 billion a month for every 100,000 POGO workers left unregistered, based on uncollected withholding taxes on their salaries. — Beatrice M. Laforga

DTI’s worst case for CITIRA job losses is 900,000

A TRADE official said his worst-case scenario for job losses resulting from incentive rationalization is 900,000, assuming a 100% pullout of manufacturing locators from economic zones.

The job loss estimate, based on the scenario of a total manufacturing investor pullout, is 200,000 more than the projection of the Joint Foreign Chambers in the event incentives are rationalized under the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), in its current form.

The Department of Finance (DoF) said in late September that CITIRA will ultimately create 1.5 million new jobs due to its corporate tax-reduction provisions, which it said will encourage expansion.

The large variance in estimates reflects the contentious nature of CITIRA, with the Philippine Economic Zone Authority (PEZA) waging what amounts to be a rearguard action against the legislation. PEZA regulates economic zones and the grant of incentives and counts locators as its main constituency.

Trade Assistant Secretary Angelo B. Taningco made his projection at a technical working group hearing on Oct. 10, acknowledging that CITIRA will likely lead to job displacement.

“Assuming a hundred percent pull-out of manufacturing firms, under PEZA, this could lead around 900,000 job losses,” Mr. Taningco told the Senate Ways and Means TWG panel.

Mr. Taningco said a semiconductor company, which he did not identify, projected a 20% head count reduction upon enactment of the bill.

“Just an example, one semiconductor company that has 220,000 employees would estimate labor displacement of about 20% or around 4,400 workers, given the expected effect of the CITIRA to their operating profit,” he said.

Mr. Taningco said the contentious provisions include the transfer of the functions of the Investment Promotions Agencies (IPA) to the Fiscal Incentives Review Board (FIRB), removal of the 5% gross on income earned (GIE)-and limiting the availment period for income tax holidays to five years.

As such, the Department of Trade and Industry (DTI) proposed amendments to the current version of the CITIRA legislation in order to mitigate job losses and attract investment.

The DTI recommends the retention of the incentive-granting functions of the IPAs, such as PEZA and the Board of Investments (BoI), and allow the FIRB to approve projects with a $3 billion threshold.

The TWG also proposed to retain the 5% GIE to currently registered enterprises if they export 70% of their output or employ 3,000 workers directly, while offering a 7% GIE on “new expanding projects” of currently registered enterprises involving investment of at least $1 billion or 3,000 direct employees, valid for three years.

He added that the legislation needs to “provide duty-free importation of raw materials for those registered export projects that are directly needed by exporters and finally, a VAT zero rating to those indirect exporters whose products are being used to form a final exportable item.”

CITIRA calls for the gradual reduction of corporate income tax to 20% by 2029 from the current 30%; and the removal of redundant fiscal incentives. Among others, it will grant up to five years of incentives, removing the perpetual grant of 5% GIE and limiting the income tax holiday.

The measure, which forms part of the comprehensive tax reform program, was among the legislative agenda items laid out by President Rodrigo R. Duterte in his fourth State of the Nation Address (SoNA).

He also urged the passage of measures to increase the excise tax on alcohol products and electronic cigarettes, centralize the property valuation and assessment system and simplify the tax structure for financial instruments. All such measures have been passed in the House on final reading, and are either at the committee level or pending plenary action in the Senate.

The government has so far signed Republic Act No. 10963, which slashed personal income tax rates and increased or added levies on several goods and services; RA 11213, the Tax Amnesty Act, which grants an estate tax amnesty and amnesty on delinquent accounts left unpaid after final assessment; and RA 11346, which will gradually increase excise tax on tobacco products to P60 per pack by 2023 from P35 currently. — Charmaine A. Tadalan

TUCP calls on DoLE for more safety nets if CITIRA legislation passes

A MAJOR UNION said Sunday that the Department of Labor and Employment (DoLE) needs to be ready with measures to deal with job losses resulting from the passage of legislation that will become the Corporate Income Tax and Incentives Rationalization Act (CITIRA) if signed.

Trade Union Congress of the Philippines (TUCP) Vice-President Luis M. Corral said that the labor department should have studies ready to “tell us how many workers are really going to lose their jobs in order to formulate an evidenced-based intervention once CITIRA is enforced.”

The TUCP said that economic managers need to provide safety nets for the 700,000 Filipinos who will lose their jobs once CITIRA is enacted. The 700,000 estimate was given by the Joint Foreign Chambers (JFC) for job losses from CITIRA, which hopes to rationalize incentives and forms the second major round of tax reforms.

CITIRA aims to lower the corporate income tax rate to 20% from 30% by 2029. The Philippines has one of the highest corporate tax rates in the region, where the average is about 22%. The bill was unanimously approved by the House of Representatives last month and is currently being discussed at committee level in the Senate.

“Our economic managers are hell-bent in pushing thousands of workers and their families towards the fire by pushing the approval of the CITIRA without any credible job protection measures and believable safety nets for workers affected by the enforcement of this second tax reform package measure,” Mr. Corral said.

TUCP added that the annual budget of P500 million allocated for displaced workers is not enough, adding that the government needs to focus on longtime security of workers after they get displaced and not just providing temporary aid.

Finance Undersecretary Karl Kendrick T. Chua has said that contrary to the JFC’s estimate on potential job losses, CITIRA will eventually produce 1.5 million jobs from business expansion spurred by the reduction in corporate tax rates. — Gillian M. Cortez

Feasibility studies due this year for Bicol expressway, 4th Cebu-Mactan bridge

THE Department of Public Works and Highways (DPWH) hopes to submit next month feasibility studies for a Bicol road project and the fourth Cebu-Mactan bridge.

Public Works Secretary Mark A. Villar told reporters last week the department is preparing the final drafts of the feasibility studies for the Quezon-Bicol Expressway (QBEx) and another Cebu-Mactan bridge.

“Those are two of the major projects that we’re targeting to submit to NEDA (the National Economic and Development Authority) within the year,” he said.

The QBEx spans some 220 kilometers from Pagbilao, Quezon to the Maharlika Highway in San Fernando, Camarines Sur, near Naga City. The DPWH said the highway hopes to bypass current roads which pass through town centers.

“(Our target for completing the studies is) within this month or early next month… then we’ll submit it to NEDA,” Mr. Villar said.

The department earlier said that while the approval of QBEx is still up to NEDA, including the indicative cost of the project, what is wants is to have the project financed by various modes.

This means that the government may shoulder a portion of the expressway cost through the general appropriations act (GAA), but it may also tap foreign help through official development assistance (ODA) or the private sector through a public-private partnership (PPP).

For the “fourth bridge” in Cebu, Mr. Villar said the feasibility study is being led by the Japan International Cooperation Agency (JICA).

“Actually it’s with JICA. Even the full-blown feasibility study is also ongoing… By November malalaman na natin (we’ll know),” he said.

The fourth bridge will complement the current Mactan-Mandaue and Marcelo Fernan bridges, which connect Mandaue City to Lapu-Lapu City in Metro Cebu.

The “third bridge” is the Cebu-Cordova Link Expressway (CCLEx), an 8.5-kilometer toll bridge project currently being built by Metro Pacific Tollways Corp. (MPTC).

UnlikE CCLEx, Mr. Villar said the fourth bridge will be a DPWH project and will focus on creating links between Mactan and the northern part of Cebu.

MPTC is the tollways unit of Metro Pacific Investments Corp., one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

Oil price rollbacks viewed as within the rules

THE fuel pricing practices of oil companies seem to be within the bounds of the rules, economists said, casting doubt on the Department of Energy’s investigation into the extent of the industry’s latest fuel price rollback.

The DoE on Oct. 1 asked oil companies to present the basis for their price reductions, which it claims should have been larger.

The rollbacks followed a few days of price volatility after the drone attacks last month on the Saudi crude production facilities. Global prices settled back down after production was not disrupted as much as initially feared.

“I have the impression that this is an accepted way to price,” University of Asia and the Pacific (UA&P) School of Economics associate professor Peter Lee U said in an Oct. 8 telephone interview.

“But, if (the computations are) different, well, technically they are free. They’re only required by law to inform the DoE and they have.”

Some oil companies on Sept. 30 cut prices by P1.45 per liter for gasoline, P0.60 for diesel, and P1.00 for kerosene. The DoE said prices could have been slashed further by P0.07 per liter for gasoline and by P0.16 per liter for diesel and kerosene.

Mr. Lee U said oil firms follow an automatic pricing mechanism as prescribed by a formula that was put in place when the industry was transitioning towards full deregulation, upon enactment of Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act of 1998.

In 2008, the DoE tapped Mr. Lee U and Sycip, Gorres & Velayo (SGV) to conduct an independent study on the reasonableness of oil pricing system.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort said the difference in the pricing of oil companies and the DoE’s computation could be down to differing prices for when the fuel was purchased.

“There’s a chance that some of these (companies) purchased when prices were much higher, so it does follow na baka nahirapan sila mag-rollback (they might have found it harder to roll back prices),” Mr. Ricafort said in a separate interview on Oct. 9.

“There are some players who may have stocked when the price was much lower.”

He said, however, that the government is right to be concerned about the pace of the rollbacks.

“When prices are rising, ang bilis nila magtaas bakit kapag nag-rollback parang matagal ata (the industry is quick to raise prices when crude prices are high but slow to reduce when prices fall),” he said.

Mr. Ricafort said the industry was quick to increase prices after the Sept. 14 drone attacks.

“A few days after Sept. 14, nagtaas agad. Mataas pa, dalawang piso. Nung nag-rollback ang tagal (The industry raised prices immediately, by a large margin of about P2. When it was time to roll back they took their time),” he said.

The drone attacks cut Saudi Arabia’s oil production by half, or an estimated 5.7 million barrels per day. — Charmaine A. Tadalan

Digitization of health care seen as vital follow-up to UHC

THE digitization of health care services is becoming urgent to ensure the efficient rollout of the Universal Health Care (UHC) Law, for which the guidelines have recently been released, officials said.

Representative Angelina D. Tan of Quezon’s fourth district told BusinessWorld that her next priority is to fast-tracking the eHealth Bill at the House of Representatives. Ms. Tan, who is the author of the UHC Law, said she has formed a technical working group (TWG) that will start discussing the eHealth Bill this week.

“We will have a TWG scheduled on Oct. 15… It’s an important component to the Universal Health Care Law… health information should be digitized. We want that portability of health information of each Filipinos and it should be inter-operable so that will be easier,” she said.

“It will be much more effective and efficient for delivering health services.”

The eHealth Bill was first approved by the House during the 17th Congress but did not reach the Senate before the Congress ended.

The bill hopes to provide telemedicine and ePharmacy services.

Ms. Tan said refiling the bill in the 18th Congress could result in passage by the end of the year.

She added, “We can pass this bill before we take a break in December. Hopefully we pass this up to the plenary and then we will wait if this will be elevated to the Senate.”

Health Secretary Francisco T. Duque III also told BusinessWorld that improved IT systems in health care is critical especially with the UHC Law now in place.

“Digital health will play a big role. Digital systems will provide efficiency in health care services to our people especially those who live in far flung areas… That is where it is needed,” he said.

Last week, the Department of Health (DoH) and PhilHealth Insurance Corp. (Philhealth) released the Implementing Rules and Regulations (IRR) of the UHC Law. Under the UHC Law, every Filipino will be an automatic member of PhilHealth.

Under Section 36 of the UHC Act, all health service providers and insurers are required to maintain a “health information system” in line with DoH standards, featuring capabilities like enterprise resource planning, human resource data, electronic health records, and an electronic prescription log. — Gillian M. Cortez

Responding to competition through organizational agility

With the emergence of threats or opportunities brought about by disruption in business, many organizations are being forced to not only reshape their business model and priorities, but also their operating model and business practices.

The Agile way of working is a collection of practices that is driven by principles of customer centricity, interaction, collaboration, transparency, and adaptability. It was originally adopted by software development companies to cope with changing business requirements, but later gained popularity beyond software development as these principles can also be adapted in responding to business disruption and uncertainty.

PAST VERSUS PRESENT
Organizations normally create a three-year or five-year plan that enables them to realize their strategies. Initiatives are then prioritized to establish a road map and milestones.

In the past, milestones were delivered in waves; each taking about six months to three years to complete. However, present-day situations require smaller but more frequent delivery of milestones, typically every two or four weeks.

While organizations continue to focus on planned priorities, management must also be aware of, and be adaptable to, any change in the business landscape that could render such priorities outdated and irrelevant. A business that adopts the Agile way of working can re-prioritize and respond to the developing opportunities and threats in the market through innovations and faster time-to-value of products and/or services.

GETTING THE JUMP OVER COMPETITION
It’s no longer just about the idea. With easy access to the internet and other technologies, competitors can now quickly come up with a similar or a more innovative version of an idea that is announced too early. Nowadays, market leadership is dictated by the ability to quickly convert ideas into products and/or services through the Agile way.

SCALING AGILITY AT THE ORGANIZATION LEVEL
Scaling looks at how to adopt Agile ways of working horizontally (across multiple teams), or vertically (from teams to program, portfolio, and organization levels) within the organization. This means that all relevant teams or layers within the value chain (decision makers, business users, project delivery teams, subject matter experts, including support teams such as procurement, finance, human resources, etc.) also need to adapt to the Agile ways of working.

As it impacts more resources, scaling Agility across an entire organization becomes a major challenge. Thus, some organizations typically adopt a pilot approach to minimize business disruption, while gradually preparing for a mindset shift.

While organizations understand the importance of agility, they also need to realize some of the challenges that come alongside this initiative. For instance:

• Agility requires a mindset/cultural shift. Successful Agile adoption addresses more than tools, process, and metrics, but focuses on cultural change and embedding new ways of working across the organization.

• Not everything can shift to Agile. There are often constraints to orchestrating a large-scale agility adoption, such as an ecosystem of vendors, pre-committed long-term contracts, and ongoing complex initiatives or programs. In such cases, co-existence of multiple methods of delivery, aside from Agile processes, becomes a reality. Yet, this can still get the organization to a higher throughput while recognizing the reality of co-existence.

SUCCESS FACTORS IN ADOPTING AGILE
There is no single formula in successful Agile adoption as organizations need to take a pragmatic approach that is dependent on the organizations’ present level of readiness and maturity, and external factors limiting the organizations’ ability to shift to Agile e.g., procurement laws, among others. However, here are a few items for consideration by organizations that wish to adopt the Agile ways of working.

* Executive buy-in and Agile Transformation Office: Like any major initiative of an organization, support and vision from the leadership can accelerate an organization’s journey towards Agile transformation. Top management can also create an Agile Transformation Office which translates leadership’s vision into a road map, and provides direction as well as oversight, to ascertain a successful Agile transformation.

* Behavioral adoption measurement: Define a framework for measuring behavioral adoption. As an initiative that focuses on culture shift, success is measured primarily by the ability of the organization to adopt to behavioral changes.

* Methods, tools, and automation: Define the governing principles, guidelines, standard processes, roles and responsibilities, governance routines, and metrics to be adopted in the Agile way of working. Moreover, as a catalyst of agility, organizations also need to define the tools that can support effective delivery and measurement. Tools serve as platform to support cross-team comparison, team collaboration, metrics reporting, or test automation.

* People and change: Identify early adopters who will become the change champions within the organization. Engage Agile coaches and consultants who can help the organization in transforming these early adopters, both from a technical and behavioral standpoint.

ADOPTING AN AGILE MINDSET
In response to changing priorities and business uncertainties, organizations need to assess their current ways of working, and come up with new ways to promote a more flexible working environment, whether in terms of refreshed principles, new behaviors, or leaner processes.

In an era where competition is centered on obsessing about the customer, being ahead of the game is as crucial as being on top of the game; and to get ahead and respond to competition, organizations need to adopt an Agile mindset across the organization.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.

April Anne M. Corpuz is an Advisory Senior Director of SGV & Co.

Higher SSS, GSIS pension rates proposed

A LAWMAKER has filed two separate bills proposing to increase the monthly pension rates for both private and public sector retirees.

House Bills (HB) No. 82 and No. 83 were recently filed by Ako-Bicol Party-list Rep. Alfredo A. Garbin, Jr.

HB 82 seeks to amend Sec. 9 of Republic Act No. 8291, or the The Government Service Insurance System (GSIS) Act of 1997, to make the basic monthly pension equal to the latest gross monthly compensation of the retired government employee.

“It is in the best interest of the service that the existing retirement program of the GSIS be revised by amending RA 8291… simplifying the computation of the same and by using the latest monthly salary of the retiring employee,” said Mr. Garbin in his explanatory note.

Under the current law, the computation of the basic monthly pension of a GSIS pensioner is 37.5% of the revalued average monthly compensation, plus 2.5% of the revalued average monthly compensation for each year of service in excess of 15 years.

RA 8291 states that the basic monthly pension shall be at least P1,300, while those who have rendered at least 20 years of service shall have a basic monthly pension of P2,400.

HB 82, on the other hand, seeks to change Republic Act No. 11199 or the Social Security Act of 2018 covering private sector workers.

“While this law is a fairly recent law, one which repealed Republic Act No. 1161 as amended by Republic Act No. 8282, this maintained or otherwise copied provisions which should have been improved to ensure that the benefits given to covered employees are abreast with the current financial realities,” reads part of the explanatory note.

The proposed measure will amend Section 12 of RA 8282, which provides that the minimum pension for Social Security System (SSS) members should be P1,200 for those with at least 10 years of service and P2,400 for those who reached 20 years.

Under the proposed bill, the minimum pension for those who rendered 10 years of service should be P3,200, while those who rendered 20 years of work should receive at least P4,400.

“The foregoing increase for affected pensioners shall be given in two tranches, the first tranche amounting to one thousand pesos shall be given starting on the first anniversary of the effectivity of this law and the second tranche amounting to one thousand pesos shall be given starting on the third anniversary of the effectivity of this law,” reads the proposed amendment.

Philippine Statistics Authority data released in January this year show GSIS contributors as of 2017 stood at 1.712 million while SSS contributors were 15.287 million.

GSIS’ coverage excludes members of the judiciary and constitutional commissions, contractual employees, and uniformed members of the military and the police. — Vince Angelo C. Ferreras

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