Metro Manila (CNN Philippines, May 15) — Defense officer-in-charge Carlito Galvez Jr. told senators that around 70% of enlisted personnel will seek retirement as they discuss the possible reform to the pension system of military and uniformed personnel (MUP).
“We anticipate it that around 70-80% of our enlisted personnel, eligible or optional retirement, will retire,” Galvez told a Senate hearing on Monday.
“Kasi ang gusto nila i-avail na nila ‘yong pension ng current system kasi ‘yong apprehension ng possible new MUP [pension] law magkakaroon ng implication sa kanilang tinatawag na optional retirement,” he added.
[Translation: Because they want to avail the pension in the current system due to the apprehension over the new MUP pension law that could have implications in their optional retirement.]
Sen. Jinggoy Estrada, who chairs the Senate Committee on National Defense and Security, Peace, Unification and Reconciliation, and Sen. Bong Revilla Jr. have filed bills seeking to reform the current pension system for military and uniformed personnel (MUP) retirees. The current pension system has been deemed “unsustainable.”
National Treasurer Rosalia de Leon presented to the committee that pension spending is projected to increase in the next years, and is seen to go up to ₱1.5 trillion in 2040, if no reforms are implemented.
She added that interest expense for the pension system will balloon to ₱171 billion in 2040.
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But while they recognize the looming fiscal problem, stakeholders including the Philippine Coast Guard, Bureau of Fire Protection, and Bureau of Correction only want the proposed reform to apply to new entrants.
The Philippine National Police (PNP) also said that the possible reform will also be a factor of increasing number of officers opting for optional retirement.
The PNP told the committee that a total of 18,000 police officers retired from 2018 to 2022. Of the number, around 65% or 12,000 availed of optional retirement.
“We are hemorrhaging with our senior PNCOs (police non-commissioned officers) because natatakot sila, Sir, at gusto nilang lumabas [they are afraid and are now opting to retire] to avail of the pension law. That is what’s happening,” PBGen. Ronaldo Olay said.
“It’s very revealing that this impending passage of this new law that we are proposing right now is resulting to brain drain as far as the MUP is concerned,” Sen. Bato dela Rosa also said, noting that the training and experience of senior officials will not be matched by new entrants.
Estrada then asked Galvez for retirement statistics of the Armed Forces of the Philippines (AFP). The Defense OIC said he will submit a full report but mentioned that for the first quarter of 2023, the AFP already has at least 900 retirees.
Galvez also mentioned that numbers of those who sought optional retirement are slightly decreasing, noting this could be because of current improved benefits in military service.
That’s why he raised to the Senate panels that the pensionable age and indexation are “very sensitive” issues for active military officials, retirees, and pensioners, based on their previous talks.
“We recognize ‘yong [the] current [financial] problem. In solving those problems, we can also engage our soldiers into discussion na i-minimize ‘yong [to minimize] optional retirement,” Galvez said.
“And maybe we can also consider ‘yong optional retirement itaas natin [to raise the optional retirement to] 25 years or maybe 30 years so that we can offset some of the accrued liabilities on having optional retirement,” he added.
President Ferdinand Marcos Jr. was “very much concerned” on the impact of the proposed law to the morale and welfare of army personnel and police officers, Galvez said.
Marcos’ economic managers assure they will engage with stakeholders to formulate a “fiscally sound and acceptable” version of the MUP pension reform.
“I believe that’s also the position of our president that we need to consult our soldiers, our PNP, and also our MUP, so that we can get the sentiment and some sort of common ground,” Galvez also said.
