Duterte to certify military pension reform bill as urgent

Dharel Placido, ABS-CBN News

Posted at Feb 07 2019 01:23 PM | Updated as of Feb 07 2019 02:56 PM

MANILA - President Rodrigo Duterte will certify as urgent a bill reforming the country’s pension system for military and uniformed personnel, his spokesperson said Thursday, as government relied on yearly appropriations to cover regular payments to retired soldiers.
Presidential Spokesperson Salvador Panelo said the President agreed to certify the bill as urgent during Wednesday’s Cabinet meeting. 

The Department of Finance earlier said the President has already approved a proposed pension plan legislation for the military which shall create a new unit that will be managed by the Government Service Insurance System (GSIS).

Finance Secretary Carlos Dominguez III said the basic capital for the unit will be military-owned land which is subject to joint development.

A bill filed by Sen. Ralph Recto in 2017 also creates the Military and Uniformed Personnel (MUP) Insurance Fund. It also makes GSIS membership compulsory for new entrants to the uniformed services.

The proposed measure mandates a government agency concerned to contribute to the MUP Insurance Fund 21 percent of the monthly base pay of their uniformed personnel.

In filing the bill, Recto said the current system to finance the pension requirements of military and uniformed personnel retirees is “unsustainable, if not fiscally irresponsible.”

“The pension system is entirely dependent on the funds appropriated for pension requirements in the annual general appropriations,” he said.

“Apart from the resulting delays in the payment of pension claims, the government is also appropriating funds for a ballooning pension requirement without a viable fund source.”

Recto noted that for 2017 alone, the government set aside P102.44 billion, or 4.1 percent of its total new appropriations, for military and uniformed personnel pension, equivalent to 321 percent of the amount appropriated for the same purpose just a decade ago.

Recto said the bill seeks to arrest the “impending fiscal hemorrhage” by establishing a government-guaranteed insurance fund to cover needs of new entrants to the uniformed services.

The fund shall be used for separation and retirement benefits of qualified uniformed personnel.

The bill also ensures that existing pensioners and uniformed personnel in active service prior to its approval shall enjoy the prevailing retirement benefits at the time of their initial appointment, recruitment, or admission to the uniformed services.