Metro Manila (CNN Philippines, July 25) — The Marcos administration’s push to reform the current pension system of military and uniformed personnel (MUP) may be realized before 2023 ends, Finance chief Benjamin Diokno said Tuesday.
As the measure is part of President Ferdinand Marcos Jr.’s priority legislative agenda, Diokno said the bill seeking to reform the pension system is expected to be passed “by the end of the year.”
“It will have an impact as soon as January of next year,” he said at the post-SONA briefing.
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“We are pushing for this… This is really for their own good to make the pension system more sustainable in the future,” Diokno said.
Diokno warned that failure to implement such reforms would result in “a catastrophic impact in the future.”
Earlier, the official said that the Philippines may see “a fiscal collapse” as the pension is fully funded by the national government.
“It will open up a lot of fiscal space in the budget,” Diokno said of the reforms.
On the planned contribution to MUP’s retirement fund, Executive Secretary Lucas Bersamin told CNN Philippines’ The Source that they would leave it to Congress to determine the details.
In June, the Department of Finance proposed to require MUP in active service to contribute 5% of their monthly salary for the first three years.
New entrants, meanwhile, should contribute 9% of their basic salary and longevity pay to the retirement fund.
READ: DOF: Contributions to uniformed personnel pension set at 5% to 9%
“The operationalization of this program will be posing difficulties regarding the source of funding because the amount discussed even with past admins was so big. We have limitations so we will resolve these issues,” Bersamin said.
“I’m confident they’re looking for solutions,” he added.
Senator Jinggoy Estrada, chairman of the Senate committee on national defense, meanwhile also said he has yet to see a win-win solution on the proposed reforms. However, he believes those who are against the proposal could eventually have a change of heart.
“I already conducted an initial hearing. Kung kinakailangan ba na magkaroon ng isa or dalawa pang hearing gagawin ko [If there’s a need to conduct one or two more hearings, I’ll do it],” the senator said. “I am not rushing things because it is a very meticulous issue.”
Estrada told reporters he will meet with Defense Secretary Gilbert Teodoro to discuss the issue and study the results of roadshows and consultations.
He also supports the idea of privatizing assets of the military and police to contribute to the pension fund, as earlier raised by Senate President Juan Miguel Zubiri.
CNN Philippines Correspondent Eimor Santos contributed to this report.
