Two separate reports on the Social Security System (SSS) have left some people trying to make sense of the fund’s real status and how the government-run social insurance institution is being managed.
The SSS is the government agency tasked with managing the workers’ social security contributions and implementing programs that provide millions of members with benefits during sickness, disability, maternity, and retirement. It is crucial, then, that the SSS has enough funds to continue giving these benefits.
It was disconcerting when reports said the Commission on Audit (COA) found that the SSS showed a 245-percent increase in paper losses to nearly P40 billion in 2025, up from P11.6 billion in 2021. The COA had also said the decline in the value of some equity investments may extend beyond short-term market fluctuations and instead reflect “underlying business conditions and performance trends.”
In response to the COA finding, the SSS issued a statement saying its unrealized or paper losses on certain listed stocks do not mean cash was actually lost. It said a paper loss is a temporary decline in the market value of an investment that has not yet been sold. No cash is lost unless the asset is sold below its purchase price.
The SSS added that the paper losses should be viewed “alongside the substantial realized gains and recurring dividend income generated by its equity portfolio.” It said its equity investment portfolio generated P204 billion in realized gains and dividend income over the last 57 years.
It also said, “SSS invests only in companies with strong earnings track records, stable business performance, and sound fundamentals. It does not place members’ money in risky or speculative investments.”
To members and pensioners, how do you reconcile the SSS report of billions of pesos in investment gains with government auditors’ findings of billions of pesos in losses? Simply put, is SSS making money or losing money?
To be fair, the reported losses do not necessarily mean SSS is losing money. It reported gains in its investment portfolio. But can SSS continue to meet its obligations to members and pensioners decades from now?
That is the real concern.
The COA asked whether the SSS management exercised the required degree of diligence and prudence in managing the Fund’s equity investments. In response, SSS said the Social Security Commission, the policymaking body of SSS, has established two independent committees, the Investment Oversight Committee and the Risk Management and Actuarial Oversight Committee, that meet monthly to monitor both the performance of the funds and the risks undertaken by SSS management.
SSS is not an ordinary investment company. It manages contributions of workers and employers in the private sector and provides benefits when they retire, become disabled, get sick, or die.
Its responsibility is not only to earn money. It is also to protect the fund and ensure that future generations of pensioners receive the benefits promised them.