MANILA, Philippines—Defense Secretary Delfin Lorenzana on Tuesday (Feb. 2) said the Armed Forces of the Philippines (AFP) wanted to have its own pension plan for retirees.
At a Senate hearing, the defense chief said the military was unlike other uniformed service agencies which are civilian in nature.
Other uniformed service agencies included the Philippine National Police, Philippine Coast Guard, Bureau of Fire Protection, Bureau of Jail Management and Penology, Bureau of Corrections and National Mapping Resource Information Authority.
“We do our duties 24 hours a day, we are assigned to many missions abroad, or at war. The AFP will be there,” he said.
Lorenzana said AFP was planning to submit a new position again on the pension retirement scheme.
He also said he supported the removal of the indexation system, where a retiree’s pension is automatically increased to the prevailing salaries of active personnel. But he said it should be adjusted to current inflation rates.
“That would be possible, but let’s put something in the law that would increase the pension of the pensioners based on the consumer price index, maybe 5 percent that corresponds to inflation,” he said.
“No longer automatic indexation but based on inflation so the pension fund will not be left behind,” he said partly in Filipino.
Because salaries of military men and civilian employees had increased through the years, Lorenzana said it would be acceptable to end the practice of providing to retirees pension levels that are for a higher rank.
“I think when this law was passed in 1979, the salary of police and military was small so there would be additional funds,” Lorenzana told senators. “At present one rank higher is no longer needed because their salaries are already high,” he said.
Lorenzana said the military also planned to reduce manpower by half if the insurgency is solved.
“The strength now is 147,000 but if we are able to solve the insurgency we can reduce it by half. That’s what the AFP wants to happen,” he said.
Lawmakers are currently crafting reforms in the current pension system in the military and of uniformed personnel to make pension funds manageable as amounts for retirement pay and pensions continued to balloon.