Metro Manila (CNN Philippines, February 2) — The government will have to spend ₱9.6 trillion in the next 20 years for the proposed retirement program seed fund for military and other uniformed personnel or MUPs.
Senate National Defense Committee Chairman Panfilo “Ping” Lacson said this is based on a study conducted by the Government Service Insurance System.
Lacson said this seed fund translates to an 800 billion-peso allocation in the national budget every year. He explained that last year’s and this year’s allocations in the budget reflect the veracity of this serious financial concern.
“Considering all the scenarios presented, talagang [it is really] overwhelming. But we really have to confront this… masira ulo natin lahat dito [we will lose our minds] on how to resolve this issue,” said Lacson during a Senate panel hearing on the issue.
With more and more MUPs retiring, the MUPs’ pension funding jumped from ₱80 billion in 2020 to ₱120 billion in the 2021 General Appropriations Act.
Senate Minority Leader Franklin Drilon said this problem has been swept under the rug for decades. He then commended Lacson for being willing to confront the difficult problem.
“The role of the Senate and Congress for that matter, being a policy body is to make a policy on this,” said Drilon. “Is it our policy to ultimately integrate or fund under a funded retirement plan the retirement plan of our men in uniform?”
Lacson said among the proposals being considered to fund the MUPs pension is to reduce benefits received by existing pensioners, as well as those currently in the service.
“In this regard, we may have to request for a legal opinion from the Department of Justice,” said Lacson.
GSIS is also looking into selling assets of the MUPs including those of the police, coast guard, military and the Bureau of Jail Management and Penology.
“The yet-to-be-completed actuarial study has also taken into consideration the one-time infusion of the proceeds from the total sales of the MUP assets, which at present is pegged at ₱14.98 billion, with a note that other MUP services have not submitted the appraised or assessed value of their assets,” said Lacson.
He added that other schemes that could substantially reduce total funding requirement include mandating the minimum pensionable age of 56 years old, and pegging the salary increase of MUPs to only 5% per year rather than 10%.
