Metro Manila (CNN Philippines, March 28) — Finance Secretary Benjamin Diokno said he hopes the Marcos administration could pursue the proposed reforms on the pension system for military and uniformed personnel (MUP) that were put off by the previous administrations.
During a Palace briefing on Tuesday, Diokno told the President that his predecessors “decided to kick the can down the road” despite the accompanying risk the current pension scheme poses.
Since the pension system is fully funded by the national government, Diokno noted that for 2023 alone, the Philippines has earmarked about ₱120 billion to ₱130 billion.
Diokno explained that the MUP pension is automatically indexed to the salary of the personnel of the same rank, which means that if the salary of the incumbent is doubled, retirees would see their pension jump by 100%.
He said that a pension can be received after 20 years of service.
“So they can already retire at the age of 40, and you know how long their lives are,” Diokno said. “Military people live longer than us. Some at the age of 90.”
“Right now, the situation is so bleak for example that if you compare the current operating expenditures or maintenance operating expenditures of the whole AFP and the capital outlays, the money they buy for airplanes etc., it is actually much less than the amount of pension that we are allocating for the retirees,” he explained.
“So there will come a time when the current budget will only be about one-third or one-fourth of the money that we are paying for the pensioners. We have to really address that issue,” the Finance chief added.
Military personnel get an average monthly pension of ₱40,000, which is way higher than retirees from GSIS and SSS.
Diokno stressed the situation is “not sustainable.”
“I said if this goes on, there will be a fiscal collapse,” he said.
Diokno said they have four proposals:
– Apply to all active personnel and new entrants
– Removal of automatic indexation of pension to the salary of active personnel of similar ranks
– The military uniformed personnel will receive their pensions starting at 57 years old
– Mandatory contributions will be required for active personnel and new entrants similar to the GSIS pensioners
“All those who are in active service and new recruits will have to pay their way, no longer free,” he said.
