MANILA, Philippines—A law that would revise the pension system for new uniformed personnel would reduce the defense budget for pensioners, which had been gnawing at defense spending for many years now.
The Armed Forces of the Philippines (AFP) on Monday (July 27) said it welcomed President Rodrigo Duterte’s call on Congress to give priority to passing a law to address the bloating pension for uniformed services.
Maj. Gen. Edgard Arevalo, AFP spokesperson, said the proposed law would address concerns of current pension and retirement pay of the AFP which come from the defense budget.
“We welcome that pronouncement, and thank the President and Commander-in-Chief, directing the institution of a new retirement and separation benefits system for new AFP recruits and officer candidates,” he said in a statement.
The Department of National Defense (DND) is one of the government agencies with the biggest budget allocations, but it does not often translate into new weapons or modern platforms.
For years, bulk of the proposed defense spending is allocated for personnel payroll and pensions for retirees and veterans.
The uniformed personnel covers the Armed Forces of the Philippines, Philippine National Police, Philippine Coast Guard, Bureau of Fire Protection, Bureau of Jail Management and Penology and National Mapping and Resource Information Authority.
Pension benefits of retired personnel increase alongside pay raises of those in active service.
Duterte, in his penultimate State of the Nation Address on Monday, said “there is a need to adjust the pension system which will be applicable only to newly-hired uniformed personnel so as not to cause a ‘ballooning effect’ against the budget of the military in the years to come and yet maintain the pension benefits of those already in service under the present law.”
“This issue needs a solution now,” he said.
At the Senate budget hearing last year, lawmakers expressed concern that defense programs could be sacrificed to fund the pension of retired personnel. They also raised the possibility of funds needed for retirees overtaking those for active personnel.