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Mr. Emilio S. De Quiros Jr, President and CEO of Social Security System

Interview - December 9, 2011
Universal News discusses the Philippines’ economy in general, and insurance sector in particular, with Mr. Emilio S. De Quiros Jr

Which sectors in the Philippines do think have most promise for the future?

I think we should focus our energies on tourism. Another area is the Business Process Outsourcing  which is a big market. The BPO business is an important part of the Philippine economy. The three parts of the economy now are the overseas remittances from OFW’s, the BPO industry, and the third part on which we need to focus is tourism.

Governor Tetangco made a statement on how strong and stable the financial system is here in the Philippines. What do you think are the Philippines competitive advantages in this regard?

We have a very well-educated citizenry. That is first and foremost. We have a very strong financial system and that strength was gained because we went through a crisis back in 1997. The Asian crisis which did not hit us as much, gave us a chance to look at what we needed to do. And thanks to the policies and programs of the Central Bank, we were able to strengthen the banking system and made the banks very strong. A very solid financial system and culture of hospitality gives us the competitive advantage especially for tourism, not to mention the beauty of the island and the English speaking population. We even get a lot of Koreans studying English here.

You English is very clear too! It’s very obvious that’s why BPO’s are successful here. For instance, very recently you’ve been upgraded by Fitch’s rating agency to BB+. This is the fourth upgrade within one year of the Aquino Administration. I remember Secretary Purisima saying in our interview, we are finally one notch off investment grade.  What is the challenge that the Philippines are facing today in order to achieve this goal to become fully investment grade?

I think the major stumbling block will be the fiscal deficit. So if we can fix the fiscal deficit, which means we need to generate more savings, both private and government, then this should strengthen the finances and therefore qualify the Philippines for investment grade status.

We have been discussing with many of the insurance companies, that the majority of remittances that are sent to the country are spent here. There is not a lot of saving. How are you working in this regard, promoting your insurance policies throughout the Philippines?

We don’t sell products. SSS is a government agency created to provide social protection to the private sector workers. It is mandatory for employed and self-employed persons. It provides the second layer in the hierarchy of social protection with the first layer being the government welfare programs like the DSWD cash transfer.  

There is a big issue about financial literacy.  The average Filipino is not aware about the importance of having an insurance policy. Are you doing any joint programs?

We are not an insurance company so we do not offer any insurance products. You probably are referring to the Government service insurance system, which is providing social protection for Government workers. They also provide insurance products such as insurance for government properties. Our organization just collect the mandatory contributions  from the private sector workers and provide various types of benefits, foremost of which is the retirement benefit. We do cover, on a voluntary basis, workers who have just lost their job or are no longer working but want to continue their SSS contributions. Also covered under the voluntary program are the Overseas Filipino Workers.

There are about twenty-nine million Filipino SSS members?

The last count was 29 million members for SSS. But in terms of regularly paying members we are running at about 10.6 million. This means, we have increased the regularly paying members by roughly one million  from end of the last year.

How are you addressing this gap considering how many people you are covering and how many people are contributing?

Well the major challenge is increasing the number of contribution members given the recent phenomenon of contractualisation. A lot of companies are doing a lot of outsourcing and we sometimes lose the coverage of these employees. It used to be mandatory for them to be covered when they were in the formal sector. When work is sub-contracted, you end up with smaller entities and the organizational structure is less formal. So sometimes the possibility of them not being covered is there. So it’s a big challenge for us.

What have you done here to monitor the payments. Increased the controls?

We have given the mandate to our account officers to monitor the compliance of the contributing companies and make sure they report the right number of employees and the right amount of compensation.

So the biggest issue is not the beneficiary, it’s the company which does not declare the right number or makes mistakes.

Right. We monitor closely the companies since they deduct the contribution of their employees which is 1/3 of the total payment while shouldering the balance of 2/3.

How are you working with other Governmental agencies horizontally. Meaning how do you integrate systems?

We work closely with local governments because we get information on new businesses. New businesses have to go to the local government to get their licences. We coordinate with them so we are able to get information that there are new companies being formed so we can start monitoring already how many employees there are and they can start registering with us.

And with the DSWD?

That’s not our territory. Because our minimum right now is people earning one thousand pesos per month. So the cash transfer goes below that. That is a different layer.

Although you are introducing a UMID?

It’s just an I.D. system. What happened here is there was an agreement among four institutions of government, SSS, GSIS, PhilHeath and Pagibig. Instead of us issuing our own I.D’s, we said why don’t we get together and determine the common information that should be in the I.D. and let’s just come up with one I.D and that’s why it called the unified multipurpose identification card or UMID.

When will you start issuing the cards?

We’ve began issuing the cards last July.

So this is basically an idea to unify, to have a better control, to have a better amount of data also.

No, it’s more of economies of scale. It’s really, just to come up with one I.D. for a member instead of him getting four I.D’s. It saves us the cost of issuing individual IDs because we just share the cost among us.

How are you working with the local governments. Do you have offices spread out?      

We have over one hundred sixty branches all over the country and 13 foreign offices.

Each of them is in charge of one city or one region?

We don’t cover all the cities. But we are in all the major cities in the country.

OFW’s are a big market for everybody, from banking to insurance, and you also have a strong focus on OFW’s. How important is it for you to support them. Also are you trying to get support from abroad?

We are trying to get them to enrol as voluntary members or to continue their membership. In reality, most of them were members in the past when they were working here in the Philippines and before they went abroad. Right now we are using a number of ways like radio and TV shows that are broadcasted worldwide, to reach them.

Which countries are you in?

We have 13 foreign branches in 10 countries. In addition, we use major radio and TV stations that broadcast OFW channels. Sometimes we reach out to them though our website. 

How many of the 29 million members do you include as OFW’s?

Some. The membership is still small. We are implementing initiatives to increase these numbers. We are going on a tour next month, visiting a number of countries in the Middle East and Europe. One team is going to Abu Dhabi, Dubai and London. Another will go to Qatar, Rihayd, Italy and Paris.

Are you developing some financial products especially for them?

No. It’s exactly the same product. We only have one product. That product is dictated by the charter by which we were created. Although for the OFW’s we do have another provident fund for them which is voluntary, where they can contribute additional funds if they want to, on top of what is contributed in the regular SSS program.

I know you are not an insurance company. But I know there is a lot of interest in microinsurance here. Are you providing any services in this regard, or are there any other programs being planned?

No, we work with them so they become members of SSS. Even the people they lend to and their members.

Are you providing any loans?

Well, we provide our normal salary loans if you are a member, and other loans such as housing and business loans.

Which are the major improvements you would like to apply here in SSS, also considering your experience in the private sector? The private sector has to be very cost effective so, each cent you spend must have a return…

Our basic challenge now is data integrity. It’s making sure that the amounts we collect from our members are posted immediately and accurately. Right now our systems are in a batch mode, but we are moving towards a real-time online system. This way, when our members make their payment/contribution whether through our branches or banks, they get posted on real-time basis.

The beneficiary can also go through your branch and make a deposit.


How important will it be for you to invest in technology for the future for SSS?

I don’t think you can go for real time online system without technology. We are currently revising our automated the systems. And we are putting in an automated record management system for documents and many others.

Are you working with the DOST?

We are working on our own at this point of time. We have our own technology group.

Considering again, your expertise in the private sector. What is your vision for this institution for the next five years?

I think we would like to bring it to a level where people will be able to be serviced faster. At this point in time they wait hours in our branches. So we are trying to improve our website to enable our members to use it for transactional purpose. Instead of going to the branches, they can access information required – similar to banks. Eventually our members’ can even file online their application for retirement, sickness allowances and get the payment the next day or during the day. That’s something we are dreaming for SSS.

Are you tied up with any banks?

We work with a number of accredited banks such as BPI, Metrobank, BDO… we work with all of these banks.

We know that SEC, in order to fast-track their business registrations, work with Landbank – so people can drop off documents and start registering their own businesses.

We work with Landbank  and many others. We are providing the convenience to our members so they can make contributions faster. We are opening up more avenues like accredited banks and even cooperatives.

In which regions do you face the most challenges?

The biggest in terms of contributions and concentration is Metro Manila.

But, the challenge to get to other regions?

 I think the problem is not geographical, the problem is more the technology. The moment you have technology, you can implement this anywhere. We are improving our website as well as our Text SSS. The latter is a facility where they can enquire via SMS. We even received an award from Computerworld  this year for our Text SSS. 

Is your beneficiary able to pay through SMS?

No. Not yet. That is the direction we are considering.

We know that market telecom and Globe have GCASH and smart money. Will you be tying up with them in this regards?

Everything would be towards that direction. Making it more efficient for members to make contributions and receive benefits. We see also more usage of the internet.