The Armed Forces of the Philippines? Retirement and Separation Benefits System (RSBS) was established by virtue of Presidential Decree No. 361 that was signed in December 1973 and implemented in 1976. Its main aim was to create a fund scheme that would ensure the payment of pension to soldiers.
Starting with P200 million in seed money from the government, the RSBS was principally funded through contributions from members of the AFP equivalent to 5 percent of their monthly pay, and income from its investments.
The RSBS invested heavily in real estate that rendered its assets vulnerable to the 1997 financial crisis.
In 1998, the RSBS losses called the attention of the Senate blue ribbon committee, which conducted an inquiry into the pension fund.
The committee found that RSBS had favored certain companies and formed joint ventures with real estate companies headed by former AFP Chief of Staff Gen. Lisandro Abadia. The companies reportedly received P2 billion worth of loans from the RSBS.
In May 1999, Senate investigators asked government prosecutors to charge Abadia with violating the Code of Conduct and Ethical Standards for allegedly using the funds for his private businesses.
The committee also asked the prosecutors to charge former RSBS president Brig. Gen. Jose Ramiscal Jr. for having been a ?willing patsy? of Abadia in granting special favors to private investors who were able to use the funds.
Ramiscal was also said to have granted ?interest-free behest loans? amounting to P310 million to two companies, in violation of the anti-graft law.
In July 2003, the RSBS problem was among the issues raised by the Oakwood mutineers, who demanded that the government accelerate the investigation of the reported anomalies.
Along with Ramiscal, three former RSBS officials?Capt. Perfecto Quilicot Jr. and lawyers Meinrado Enrique Bello and Manuel De Satuito?face 17 counts of graft and 12 counts of falsification of public documents in various divisions of the anti-graft court for over P100 million in allegedly irregular real estate acquisitions between 1996 and 1997.
In December 2006, then President Gloria Macapagal-Arroyo signed Executive Order No. 590, which ordered the dissolution of the RSBS and the formation of the Cabinet oversight committee to supervise the winding down of the RSBS and the establishment of a new military retirement system.
The executive order also called for the transfer of RSBS assets to a government financial institution and the establishment of a trust account.
The AFP, however, needs the passage of a law to come up with another retirement system for its members. Inquirer Research