(CNN Philippines) — Military pensioners like Rebecca Nava don’t mind sleeping on the streets outside Camp Aguinaldo.
When her soldier-husband was killed in a rebel attack in Negros more than two decades ago, she had to raise their four children by herself.
“Kahit nag magkabaun-baon ako sa utang, pero at least hindi ako nagsisisi dahil para sa kanila yan e. Pera ng tatay nila yan,” she says.
[Translation: “Even if I get deeper into debt, at least I have no regrets because it’s for them. That’s their father’s money.”]
Saving for retirement not a priority
Like many other military pensioners, almost all of Nava’s monthly pensions go to the payment of multiple loans.
Soldiers earn a minimum of P500 a day.
The Armed Forces of the Philippines (AFP) admits there’s a problem on how soldiers handle their finances. Saving up for retirement is not the priority for most of them.
Often on risky assignments, they make up for lost time by spending for their families.
The AFP says they do remind soldiers to value their hard-earned money through occasional lectures.
Rep. Gary Alejano, a retired Marine captain, want these lectures institutionalized.
Financial tug-of-war
But then, there are bigger pension problems.
Where will the government get the money for the more than P18 billion in unpaid claims?
There have been a number of proposals filed before Congress, including the lease or sale of government properties, particularly military camps.
“But again, meron pa tayong challenges. Arrears lang po ito eh,” he said. “And the Department of National Defense is also looking at one major issue — the modernization of the Armed Forces. So dalawa yan naghihilahan.”
[Translation: “But again, we still have challenges. These are just arrears. And the Department of National Defense is also looking at one major issue — the modernization of the Armed Forces. So those two are pulling at each other.”]
The Aquino administration has been pouring out much of the AFP money for modernization like the purchase of artillery, fighter jets, and warships.
But as more soldiers retire every year, the demand for pension costs is also growing in a rapid pace.
In the AFP, the pension budget for 2005 was at P9.7 billion.
This has more than doubled in seven years.
The pension budget will overtake the salary allocation for active service members by 2017.
This could mean two things.
First, it could jeopardize priorities for defense spending, since military pensions are drawn out from the yearly AFP budget.
Second, it’s bad news for taxpayers because they will shoulder the lack of budget for pensions.
This year alone, government is allocating about P34 billion to pay for military pension.
And the pensioners’ contribution to their fund?
Zero.
Proposed reforms
Alejano says retirees should understand one thing: “They are not there for themselves alone. They are part of a bigger society, and they should part of the solution to the problem.”
To save the military pension system from going bankrupt, reforms have been proposed:
repeal provision of automatic pension hike in Presidential Decree 1638
raise mandatory retirement age from 56 to 58
increase minimum years in service from 20 to 25
reduce survivorship benefit from 75% to 50%
Another proposal, is to create a separate government-controlled body that will establish an independent funding scheme to pay the pensioners.
Soldiers, however, will have to begin contributing to the government’s share for the pension fund.
These proposals are facing strong opposition from pensioners.
But retired Maj. Alfonso Besario says: “Ang mga pensioners natin should understand that, even if they see the proposal as disadvantageous to them, they should look beyond this. Otherwise, darating ang araw, maapektuhan yung present pension nila mismo… We’re going to ration the pension because of the lack of funds.”
[Translation: “Our pensioners should understand that, even if they see the proposal as disadvantageous to them, they should look beyond this. Otherwise, the day will come that their present pension will be affected. We’re going to ration the pension because of the lack of funds.”]
Besario is the national president and chair of the Conference-Assembly for Unity and Solidarity of Associations in the Armed Forces and Police Retirees, Veterans Pensioners Inc.
There’s no question that veterans should receive the money promised to them.
But without reforms, pensioners will end up with what they have been contributing to the fund: Nothing.
That’s a situation far more worse, from what the pensioners are experiencing today.
