MANILA, Philippines — The government wants to reform the uniformed military personnel (MUP) pension system to avoid a “fiscal collapse,” Finance Secretary Benjamin Diokno said on Tuesday.
The government proposed four reforms:
- Receipt of pension by 57 years old
- Mandatory contributions for active personnel and new entrants
- Removal of automatic indexation of pension to the salary of active personnel of similar rank
- Application of reform to all active personnel and new entrants
“We want to reform them. Right now, the situation is so bleak… There will come a time when the current budget [of the military] would only be about one-third or one-fourth of the money that we’re paying for the pensioners,” Diokno said in a Palace press briefing.
“So, we have to really address that issue. It’s not sustainable. I said, if this goes on, there will be a fiscal collapse,” he added.
Defense Secretary Carlito Galvez and Local and Government Secretary Benhur Abalos agreed to the government’s proposal.
“There’s unanimity… They [Galvez and Abalos] generally agreed with all the four [reforms],” Diokno said.
The pension system covers those in the Armed Forces of the Philippines, the Bureau of Jail Management and Penology, the Bureau of Fire Protection, the Philippine National Police, the Philippine Public Safety College, the Philippine Coast Guard, and the Bureau of Corrections.
Currently, the MUP pension system is funded by the national government, and there is no contribution from the retirees.
When personnel retires, he/she is given a rank higher, Diokno said, and the pension is “automatically indexed to the salary of the personnel of the same rank.”
The personnel can also receive a pension after 20 years of service, regardless of age.
A military personnel’s average monthly pension is P40,000, said Diokno, noting that it is nine times bigger than those under the Social Security System and three times higher than those under the Government Service Insurance System.
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