MANILA, Philippines — Two top executives of the Social Security System (SSS) have resigned while under investigation for their alleged involvement in a stock trading controversy.
In an interview with the ABS-CBN News Channel, Social Security Commission (SSC) chairman Amado Valdez said equities investment division chief Reginald Candelaria and chief actuary George Ongkeko Jr. have tendered their resignation.
“Before the break, the commission received (Candelaria’s) resignation and we approved it,” Valdez said. “Even Mr. Ongkeko tendered his resignation a month ago.”
He said the former’s resignation was already approved by the SSC, while the latter’s was held in abeyance due to pending duties.
“The Commission has approved the resignation of Candelaria. We have held in abeyance the resignation of Mr. Ongkeko. He has some other things where he has to complete some advisory work. It has to do… with the change in our Charter,” he said.
Asked for the reason they resigned, Valdez said, “I don’t know, but perhaps they want to pursue other opportunities.”
Candelaria is one the SSS officials accused of buying shares with the help of a stockbroker accredited to manage the state fund, according to a complaint filed by SSS commissioner Jose Gabriel Laviña.
Ongkeko’s involvement in the controversy stemmed from his alleged negligence in performing his duty of ensuring compliance with transparency safety net rules in the SSS, Valdez said.
The chairman said SSS executive vice president Rizaldy Capulong and equities product development head Ernesto Francisco Jr., two others mentioned in the complaint, would be assigned to the office of president and chief executive officer Emmanuel Dooc.
Valdez said the allegations suggest conflict of interest on the part of the officials, which the SSS would not tolerate. He, however, gave assurance that money from the state fund was not used in the questionable stock trading transactions.
According to Valdez, an investigation on the issue was ongoing even before it was exposed in the media.
He said the SSS has issued show cause orders to the involved officials, but only Francisco has submitted his counter-affidavit so far. The others have requested for extension, he said.
If the officials are proven guilty, Valdez said the penalty could range from reprimand to suspension, even dismissal from office.
The SSS is authorized to invest in shares of stocks listed in the stock exchange provided that such investment shall not exceed 30 percent of its Investment Reserve Fund.
According to Valdez, the SSS is heavily reliant on paper assets such as stocks to generate revenue to fund its future liabilities.
He said as part of reforms, the SSS is shifting its portfolio balance to direct investments, such as real estate and properties.
With an investigation ongoing, Quezon City Rep. Winston Castelo said Justice Secretary Vitaliano Aguirre II should direct the Bureau of Immigration to include the officials in a lookout bulletin order to “prevent them from evading criminal or administrative liability.”
An Immigration Lookout Bulletin Order is issued against a crime suspect not yet charged in court. It can be upgraded to a hold-departure order to be issued by a court if an indictment is made.
Eastern Samar Rep. Ben Evardone earlier said his committee would investigate the SSS controversy.
“Congress, in the exercise of its oversight functions, will investigate – through the committee on banks and financial intermediaries – the alleged anomalies in SSS on trading of its stocks,” Evardone said.
“I will file the necessary resolution Thursday (Nov. 2) for this purpose,” he said in a Viber message to reporters.
“Aside from the issue of corruption, we will try to find out if SSS funds, which are owned by millions of members, were not lost in the transactions, especially in light of the proposed increase in member’s contributions,” he added.
“We should safeguard the SSS funds to ensure its viability and enable it to pay its obligations to its members,” he pointed out.
Castelo, chairman of the House committee on Metro Manila development, lauded Laviña for coming forward to expose irregularities in the agency, and urged more government officials to act as watchdogs of public funds.
The SSS manages almost P500 billion in assets, accumulated through the mandatory monthly contributions of its 35 million members who are employees in the private sector.
Meanwhile, labor group Partido Manggagawa (PM) yesterday asked the SSS to stop the planned increase of its members’ contributions amid the investment scandal involving some of its officials.
“SSS must first clean its house and implement internal reforms before any additional burden is imposed on more than 32 million workers who are its members and beneficiaries,” said PM chairman Rene Magtubo.
He noted the planned 1.5 percent yearly increase in contributions starting next year up to 2020 will have a “significant cut into workers’ take-home pay.”
Magtubo added that instead of raising contributions, SSS must cut the perks and privileges of its officials and increase the fund coverage by running after employers who do not remit contributions.
“All these must form part of internal reforms that should include firewalls against corruption and illegal transactions,” he said.
The SSS had announced that it is proposing hike in contributions from 11 percent to 12.5 percent of workers’ monthly pay starting next year.
“The conflict of interest and illegal transactions of the three SSS executives is probably just the tip of the iceberg as far as immoral profiting from the workers’ fund is concerned. Back in 2013, performance bonuses of more than a million each for SSS commissioners and top officials generated much outrage,” he added.