Digitalization cuts SSS operating expenses as share of benefit payments by almost half in 2021
The stepped-up digitalization program of the Social Security System (SSS) implemented during the Duterte administration has reduced the pension fund’s operating expenses to only P4 for every P100 of benefits paid in 2021, cutting this cost by almost half from the P7.90 that it spent in 2015 for the same activity, based on preliminary reports.
In a report to Finance Secretary and Social Security Commission (SSC) Chairman Carlos Dominguez III, the SSS said that if loan disbursements made by the Fund are included in the computation, it only spent P3.50 for every 100 benefits paid plus loans released in 2021.
As a share of the pension fund’s revenues, its operating expenses also went down from 5.5 percent in 2015 to 3.5 percent in 2021, SSS president and CEO Aurora Ignacio said in her report.
Dominguez had ordered the SSS in 2019 to trim its operating expenses as a share of benefit payments, which was at 5.1 percent at that time, to around 3 percent to ensure that member contributions to the pension fund are efficiently spent and maximized for their benefit.
“Our digitalization initiatives which we pursued upon the instructions of the Secretary way before the pandemic, played a big part in pursuing our goal of reducing our operating expenses as a share of benefit payments,” Ignacio said.
Dominguez thanked the SSS for its "good performance and good run" under Ignacio's leadership.
Ignacio, in turn, said that "SSS did very well in the last three years" with Dominguez's guidance, "despite the challenges of the pandemic, and despite all the challenges that we had."
She said that for 2022, the SSS is targeting to further cut its operating expenses to P3.90 for every 100 benefits paid.
The SSS invested P807 million for capital outlay from 2019 to 2021 to improve its information technology (IT) capabilities and prepare for the digital transformation of the pension fund, Ignacio said.
She said the SSS also entered into a memorandum of agreement (MOA) last year with the Bureau of the Treasury (BTr), Government Service Insurance System (GSIS), Insurance Commission (IC), Philippine Deposit Insurance Corp. (PDIC), and the Land Bank of the Philippines (LANDBANK) to procure a Shared Cyberdefense Solution as an additional layer of protection for the SSS against cyber hacking and other threats.
Last year, the SSS fully transitioned to processing online the various benefits claimed by its members, which include maternity, sickness, unemployment insurance, funeral, and retirement benefits.
Salary and calamity loan applications are now filed, processed and released 100-percent online.
Ignacio said the SSS also continues to provide its members with safe and convenient online access to their SSS records and transactions via the SSS Mobile app and web-based platforms under its ExpreSSS campaign.
From 7.4 million in 2020, the downloads of the SSS Mobile app grew to 12.02 million in 2021.
Total downloads of the SSS Mobile app since its launching in 2018 have already breached the 22-million mark, Ignacio said.
Payments collected via this app using digital wallets such as PayMaya, GCash, credit and debit cards, and through BPI amounted to P1.03 billion from 373,153 transactions last year.
As of the third quarter of last year, less than one percent or around 13,000 of the 3 million SSS pensioners were still receiving their pensions via cheques, while the rest have already shifted to electronic payments, Ignacio said.
Also last year, Ignacio said the SSS was able to collect from delinquent accounts a total of P23.71 billion, representing a 138-percent increase from the P9.98 billion collected in 2020.
She said the SSS launched in 2021 its mandatory provident fund dubbed the Workers’ Investment and Saving Program, (WISP) which now has 3.6 million members with total contributions amounting to P13.8 billion.
The membership in WISP is automatic to those with Monthly Salary Credit of more than P20,000.
From P444.4 billion in 2015, the SSS grew its total assets to P 705.54 billion in 2021, while reducing its liabilities from P8.87 billion in 2015 to P7.91 billion in 2021, based on preliminary reports and excluding Insurance Contract Liabilities.
Its reserves stood at P435.52 billion in 2015, which went up to P697.63 billion in 2021.
Ignacio said the SSS has been adopting the Philippine Financing Reporting Standards (PFRS) 4 for insurance entities, starting from its 2020 Audited Financial Statement as instructed by Dominguez last year, and has submitted this on August 2021 to the Commission on Audit (COA).
The COA gave the SSS an unmodified opinion, the highest auditing mark granted if an agency is free from “material misstatements.” DOF
