Social Security System (SSS) Chairman and CEO Michael G. Regino clarified on Monday that the net loss of P843.9 billion shown in his unaudited financial statements for 2021 is the result of a accounting standard change brought about by the Philippine Financial Reporting Standards (PFRS). ) 4.
Regino, however, assured SSS members and retirees that the reported losses do not affect SSS’s current cash flow and funding position and that it remains financially viable to provide benefits to its stakeholders.
In fact, he noted, the SSS’s cash inflows made up of dues collections and investment and other income for 2021 reached 262 billion pesos, exceeding its cash outflows of 234 billion pesos by 28 billion pesos. pesos composed of benefit payments and operating expenses for the same year.
“This increase in net loss compared to the previous year is due to the recognition of the margin for adverse deviations [MfAD] in our political reserves. MfAD serves as a buffer for conservatism, which we factored into our financials from 2021,” Regino explained.
Mathematical liabilities are forward-looking estimates of net future liabilities. These include benefit payments that will be made to SSS members and their beneficiaries in the future.
“These future liabilities must be recognized now because they provide us with an accurate view of our long-term financial position, which serves as a guide for us and the government to ensure that we will be able to continuously serve our current situation. and future. members and their beneficiaries,” added Regino.
The SSS is a state-run social insurance institution that extends social protection to Filipino workers in the private and informal sectors. Under the Social Security Act of 2018, it offers seven benefit programs, namely sickness, maternity, unemployment, retirement, disability, death and funeral, as well as loan privileges.
Picture credits: Nonoy Lacza