The Philippines' Social Security System (SSS), a state-run pension fund for private sector workers, says net income more than tripled in the nine months through September 2019 after the contribution rate for members was increased earlier this year.
Net income jumped to 31.02 billion pesos (US$611.22 million) from 8.62 billion pesos in the same period of 2018, according to the fund’s undated financial results posted on its website. Gross income increased to 186.18 billion pesos from 151.30 billion pesos.
The contribution rate to the fund was raised from 11% to 12% in April after legislation was passed allowing a gradual increase to 15% by 2025, and also making it mandatory for Filipinos working abroad to contribute.
The rate will be increased further in one-percentage-point increments in 2021, 2023 and 2025.
SSS says total contributions in January through September 2019 rose 26.69% to 160.91 billion pesos from 127.01 billion pesos in the same period last year.
The fund’s investment and other income climbed to 12.12 billion pesos from 11.93 billion pesos. This was surprising to a fund manager at a European asset management firm who says investor sentiment in the Philippines has been weak because of uncertainties related to negotiations to resolve the long-running US-China trade war.
“It will be very challenging for the fund to post a growth in its investment and other income for the full year [ending December 31],” the Singapore-based manager tells Asia Asset Management, speaking on condition of anonymity.
SSS had 558.98 billion pesos of total assets as of end-September, up from 512.36 billion pesos at the beginning of the year.