MANILA, Philippines—Malacañang’s decision to “remove” Corazon de la Paz from the helm of the Social Security System (SSS) was due to her close ties to the Makati Business Club (MBC) and groups critical of the Arroyo administration.

This was according to a ranking government official working closely with state financial institutions, who spoke on condition of anonymity because he was not authorized to speak on the issue.

“There were just too many issues,” the official said, referring to De la Paz’s dealings with anti-administration groups and organizations. “I think she’s too closely identified with the Makati Business Club and even the Black and White Movement.”

“Just last week, there was another,” the official added, although he declined to specify what the last straw was that prompted De la Paz’s replacement by Romulo Neri, chair of the Commission on Higher Education, effective Aug. 1.

As SSS administrator, Neri will also head a new Cabinet cluster, the National Social Welfare program, that Ms Arroyo created Tuesday.

De la Paz said that she only learned of Malacañang’s move when she received a call from Finance Secretary Margarito Teves on Tuesday night while she was attending a business meeting in Kuala Lumpur, Malaysia.

“He called me up to tell me about the decision,” she said.

Interviewed upon arriving from a foreign business trip Wednesday afternoon, De la Paz acknowledged that politics figured in her departure from the state pension fund for workers in the private sector, but said that she submitted her resignation to Malacañang last month.

“If you are in government, there will always be politics,” she said in a telephone interview.

De la Paz refused to elaborate, however, on the political aspect of the change in leadership at the SSS, which manages P248 billion worth of assets and contributions from 27 million members.

“You know I will not answer questions like that,” she said when pressed further about the reasons for her departure.

Time to leave

The outgoing SSS chief said, however, that she had been at the helm of the pension fund for seven years already and that it was a “good time” for her to leave.

She said there was a “confluence,” of the Palace appointment of Neri as her replacement and her need for more time to take care of personal affairs.

“I need to look after my health, too,” De la Paz said.

Against Neri appointment

A number of senators are against the appointment of Neri, a reluctant witness in the Senate probe of the National Broadband Network (NBN) deal, to the SSS, saying that it could further stoke political controversies amid the economic crisis.

Executive Secretary Eduardo Ermita said Neri was qualified to serve as chief executive officer of the state-run pension fund.

As part of the MBC, De la Paz joined calls for President Gloria Macapagal-Arroyo to step down during the so-called Hyatt 10 crisis in 2005, in the wake of the “Hello Garci” wiretapping controversy in which Ms Arroyo allegedly rigged the 2004 presidential election in her favor. The President has denied the allegation.

Unwise, untimely

In the Senate, Sen. Manuel Roxas II described Neri’s appointment to the SSS as “unwise” and “untimely,” especially considering that Neri has “minimal, real-life experience in the marketplace to sit atop the SSS which has nearly 30 million members.”

“I would not have made the appointment. These are turbulent times for the country—the stock market is volatile, the peso is losing steam, and we are beset with global uncertainties,” he said. This appointment will just drive unneeded political controversy.”

Sen. Francis Escudero said that Neri had already proved that he placed the interest of Ms Arroyo above the interest of the public when he refused to divulge what the President had told him after telling her that he was offered P200 million to favor the overpriced ZTE Corp. contract for the $329-million NBN deal.

The deal, which is being investigated by the Senate, was scrapped amid allegations that officials, including the President and her husband, received bribes from the Chinese telecommunication firm. The First Couple have denied the charges.

Off limits

“I am worried that he would take over the private money of private citizens that should be off limits to the political or financial interests of anybody in government. I just hope and pray that he will not spend the SSS’ money for political gains,” Escudero said.

Sen. Maria Ana Consuelo “Jamby” Madrigal was surprised by the changing of the guard at the SSS. “People who have anomalies hanging over their heads should not be appointed in any government position,” she said.

Sen. Panfilo Lacson said naming another political appointee to a state pension fund, like Government Service Insurance System chief Winston Garcia, would send an alarming signal of Ms Arroyo’s plans on the SSS and GSIS funds, especially with the coming elections.

Ermita said concerns over the management of the pension fund was “definitely on the mind of a fellow like Secretary Neri” who, he said, was told by the President: “Don’t put in jeopardy the SSS interest or its members.”

“Everyone knows the competence as an economist and as an executive of Secretary Neri,” Ermita said, pointing out that before joining the Cabinet, Neri had served as chief of the Congressional Planning and Budget Office of the House of Representatives and professor at the Asian Institute of Management.

Neri will serve as SSS administrator with Cabinet rank and head the newly launched national social welfare program of government.

Covered by executive privilege

With the SSS being elevated to a Cabinet portfolio, Neri will be covered by the doctrine of executive privilege, Ermita said.

This means that Neri will continue to be barred from disclosing details discussed during Cabinet meetings or conversations with the President, including his knowledge of the NBN deal with ZTE Corp. With reports from Gil C. Cabacungan Jr. and Michael Lim Ubac