The Social Security System (SSS), the Philippines' primary state pension fund serving over 40 million members, is aiming to maintain its net income above P100 billion to ensure the long-term sustainability of its fund while continuing to enhance benefits for members and pensioners.

SSS President and Chief Executive Officer Robert Joseph M. De Claro told reporters on the sidelines of an event on Tuesday that the P100-billion threshold is the appropriate income level for the state pension fund at present.

"I think P100 billion should be the level of income of the pension fund today because if the income increases, we have more opportunities to increase benefits. So, I won't keep it as income. I would pump it to where it matters, which are the members and pensioners. That's the most important," Mr. De Claro said.

He emphasized the need to balance income generation with benefit provision. "If you're in the business of social protection, what is more important? You make P150 billion a year, or you provide additional benefits that will lower it to P100 billion? I think making P100 billion a year is already something sufficient that ensures sustainability of the fund," he added.

The state-run pension fund reported a 28% decline in net income to P48 billion in the first half of the year, down from P66.5 billion in the same period a year ago. The decline underscores the challenge SSS faces as it works to sustain payouts amid demographic pressures and evolving investment conditions. The official has said the agency is aiming to disburse at least P250 billion in benefits this year.

Meanwhile, SSS is expanding its microloan offerings through partnerships with additional banks. The pension fund has already tapped Rizal Commercial Banking Corp. (RCBC) for its micro-lending program, SSS LoanLite, and plans to extend the service to customers of Land Bank of the Philippines and Union Bank of the Philippines (UnionBank). These partnerships will be covered by the P40 billion the agency has set aside to fund microloans.

UnionBank signed a memorandum of understanding with SSS for the program in April, and UnionDigital Bank, Inc. confirmed in June that it is also participating in the micro-lending initiative.

"These four banks would have the advantage because they will be the first early adopters… I think, technically, it's mathematically improbable to reach P40 billion within the next couple of months," Mr. De Claro said.

He projected that actual loan disbursements would likely reach P50 million to P100 million per day, though even P50 million would be "already a stretch." At P1.5 billion per month over September through December, the agency expects to release a maximum of approximately P6 billion this year.

On the investment front, Mr. De Claro said the pension fund is open to partnering with the Maharlika Investment Corp. (MIC), the Philippines' sovereign wealth fund established in 2023, to invest overseas.

"The SSS is a stable partner. The bigger strategy is we invest overseas, with the idea that we can also attract investments in the Philippines. That's the general model, in a controlled way," he said. "Invest overseas first. And if they're looking for a partner, they can do it with the SSS."

Mr. De Claro has previously indicated that the agency is pursuing policy changes that would enable the state pension fund to invest in overseas markets. Expanding into foreign assets would mark a significant shift for SSS, whose investment portfolio has been predominantly domestic.

Additionally, the SSS is aiming to double its branch network to 500 locations by 2030, up from the current 260, a plan that would require expanding its present workforce of 1.5 million employees.

— Aaron Michael C. Sy