Chile’s House passed Wednesday, in a 95-56 vote, a bill that aims to allow the withdrawal of up to 10% of pension funds amid the Covid-19 crisis.

This is a heavy defeat for the government led by conservative billionaire Sebastián Piñera who, on Tuesday, announced a package that includes bonuses, a rent relief program and low-interest loans in an attempt to deter its progress in Congress.

This also deepens the tensions in Chile Vamos, the right-wing coalition in power, as the constitutional amendment can now be reviewed and voted by the Senate thanks to 13 of its lawmakers who voted in favour of the idea.

The Santiago stock exchange reacted negatively to the news and after the vote the market plunged 3.22%.

The biggest losers were CGEgas (-6.08%), Enjoy (-5.80%), Mallplaza (-5.57%), SalfaCorp (-5.43%) and CAP (-5.07%).

From Congress, Home secretary Gonzalo Blumel said that this is not the best alternative for the middle class or pensioners and that he expects senators to reject the bill.

In the 1980s, the dictatorship introduced a pension system (AFP) administered by private companies. It was engineered by José Piñera, one of the brothers of the president.

The system is heavily criticised due to low payouts and was one of the main issues that fueled massive protests in 2019, a conflict that simmers while the pandemic is still out of control.

In a Pulso Ciudadano poll released this morning, the withdrawal plan is backed by 82.8% of Chileans whereas only 12% agrees with La Moneda’s package.