|
Cora de
la Paz writes her postcript on reviving, keeping the sss
afloat: Say ‘no’ flatly, directly, politely, to protect
the SSS from bad politics and bad investments.
A few
days after presiding at a news conference where she
confirmed she was leaving the country’s biggest pension
fund, and, despite the behind-the-scene recriminations,
appealed to the public to support her successor while
urging employees and members to safeguard their money,
Corazon de la Paz-Bernardo paused from her toxic
predeparture schedule to answer questions from
BusinessMirror Section Editor Emeterio Sd. Perez. Below
are her replies.
What
was your impression of—or, what did you know about—the
Social Security System (SSS) when President Arroyo
appointed you in 2001 as president and chief executive
officer?
The SSS
was an organization in turmoil because of the mass
actions taken by a group of officers and employees
against its then president. It was also in the center of
controversies surrounding former President Estrada
because of allegations that he ordered the equity
investments made by the SSS in certain companies, which
investments had turned sour.
The SSS
was in tight financial straits as it was almost reaching
the limits of what it could use to cover its
administrative costs, equal to 12 percent of collections
and 3 percent of investment income. Its actuarial life
based on 1999 valuation was to last only up to 2015,
unless reforms were undertaken. It was paying more
benefits than it was collecting from its members and
was, therefore, dipping into its reserve funds.
Its investments were going down in value as the economy
had deteriorated. The members were upset with the system
because of the stories about its financial condition and
the reported abuses by former officials. Public image
was bad and the SSS was suffering from credibility
problems. However, its employees were prepared to start
anew and work hard to recover its lost glory. (And they
did for the last seven years.)
As
you were then taking over the SSS amid accusations that
the SSS invested in Belle Corp. at the behest of former
President Joseph Ejercito Estrada, how did you prepare
for the job? How did you feel about the appointment?
I
requested two of my former partners at
PricewaterhouseCoopers-Philippines to help me in this
new job. I had briefing sessions conducted by key
officers to familiarize myself with SSS operations and
support systems. I prepared for the job as if I was
preparing for a consultancy-and-audit assignment for a
new client. I tried to understand the business and how
we could make it grow and make money.
Likewise, we put in motion processes that would allow us
to improve the quality of our services and expedite
processing of benefit claims.
We also
communicated with the business community about our
operations and our need for the employers and employees
in the private sector to help us strengthen the
organization. We appealed to them to help us by paying
their premiums regularly and at the right amount. We
also formed a task force to cut costs to enable us to
live within the limit required by our charter.
I saw
the acceptance of the appointment as an act of
patriotism at a difficult point in our history as a
nation. This was just right after Edsa 3 and there was a
need for institution-building. Payback time!
Do
you think you were able to correct the failures of the
Estrada years regarding bad investments and behest
loans? How?
We tried
to clean our balance sheet and collect long-outstanding
receivables, dispose of bad accounts and improve our
investment guidelines. We made it clear that investments
must be according to the charter and under prudential
guidelines. No behest loans had been asked nor made. It
helped that the economy started to improve and market
values went up.
Speaking of SSS commercial loans during Estrada’s
short-lived administration when Carlos Arellano was SSS
chief, was Belle the only company that got loans during
those years? Belle’s P400-million loan has been entered
in the company’s audited financial statements as
“current” for so many years until you succeeded in
collecting and received a prime lot somewhere along
Roxas Boulevard.
There
were also other loans made and we spent a good deal of
our time cleaning up our records and collecting from
borrowers, including government entities. Our biggest
borrower was the government for funds for housing and
so-called development projects.
As
SSS chief for seven years, what impressions did you get
about the pension fund? Have there been attempts by
politicians to influence you running the SSS?
The
pension fund needs to be further strengthened to allow
its actuarial life to reach perpetuity. There have to be
charter amendments to cover OFWs wherever they’re
working in the world. There were requests made for us to
extend support for education, but we find this still
unaffordable at this stage.
There
have been no concerted efforts by politicians to
influence our running of the SSS. Some bills have been
passed to increase benefits for pension, etc., and we
have submitted our comments. For the most part, we have
been allowed to run our own show. We have turned down
requests politely if we don’t believe that such an
action will be good for the system.
Given
your background as a professional manager, having been
chairman of Joaquin Cunanan & Co., how did you resist—or
deal with—such political pressures, if there were any?
I speak
directly and flatly refuse requests that we can’t
support. I follow the charter provisions strictly. They
have respected our decisions.
Are
there still some plans that you prepared in 2001 that
you have not implemented yet? What are these?
We need
to further strengthen our electronic services
(information and communications technology) to enable
our members to get better or more prompt service. This
project is ongoing. We also will need to implement our
rationalization plan after we get approval from the
Department of Budget and Management and the Department
of Finance. They should easily be implemented by my
successor and our officers and staff.
As
chairman of a global social-security organization, how
will your SSS compare with those of other countries?
We are
one of the better SSS organizations but we have to have
more resources to be able to help our members with more
meaningful benefits. Our contributions are quite low and
can’t support our members’ needs in these difficult
times.
Finally, what are your plans as a private citizen? Will
you still be available for election as independent
director of listed companies?
Yes, I
plan to serve in boards of listed and nonlisted
companies and continue serving as president of the
International Social Security Association until 2010. |
