MANILA — President Ferdinand Marcos, Jr. will push for reforms on the pension scheme for military and uniformed personnel to prevent a possible "fiscal collapse," Finance Secretary Benjamin Diokno said on Tuesday.
Diokno noted that for this year alone, government allotted around P120 to 130 billion for the pension of unformed personnel, which he said was no longer sustainable.
"[The] situation is so bleak. For example, that if you compare the current operating expenditures or maintenance operating expenditures of the whole AFP and the capital outlays, the money they buy for airplanes etcetera, it is actually much less than the amount of pension that we are allocating for the retirees," Diokno told Palace reporters.
"There will come a time when the current budget will only be about one-third or one-fourth of the money that we are paying for the pensioners. 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.
Marcos "is recognizing the need" for the proposed military and uniformed personnel pension reform, said Diokno.
"Talaga ipu-push niya," he added.
(He will really push for it.)
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Under the current scheme, the pension of retired personnel increases by 100 percent when the "salary of the incumbent [personnel] is doubled," noted Diokno.
Uniformed personnel who have rendered at least 20 years of active service could also opt for an optional retirement. This means that those who enter the service at 20 years old could be eligible for pension in their 40s, Diono added.
"Military people live longer than us, some at the age of 90. So they retire at 40, they get their pension up to age 90, isn’t that ridiculous?" said the official.
The average monthly pension of a military personnel is around P40,000, Diokno said.
"Compare that to what SSS retirees get, it’s 4,528 and what a GSIS personnel get, 13,600. So that the pension that is received by a military pensioner is 9 times higher than the average pension of a pensioner under SSS and three times higher than the average pension under GSIS," he added.
The pension scheme for uniformed personnel covers the Armed Forces of the Philippines, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine National Police, Philippine Public Safety College, Coast Guard, and Bureau of Corrections.
Diokno said during his recent meeting with Marcos Jr., Defense officer-in-charge Carlito Galvez and Interior Secretary Benhur Abalos, they agreed on the following:
- Removal of automatic indexation of pension to the salary of active personnel of similar ranks
- Grant military and uniformed personnel their pension at 57 years old from the current 56 years old
- Mandatory contribution for all active personnel and new entrants "similar to the GSIS pensioners" or depending on their salary
- Apply the proposed reform to all active personnel and new entrants
"All those who are in active service and new recruits will have to pay their way, no longer free," said Diokno.
"There's unanimity. We talked to Sec. Galvez, we talked to Sec. Benhur Abalos and they generally agreed with all the 4 [options]" the official added.
While Marcos Jr. has approved the proposal, it has to pass Congress, Diokno said.
Diokno said he did not believe the proposed reforms would demoralize military personnel.
"Hindi naman, kasi as you know, in 2018 dinoble yung sweldo nila... I think maiintindihan nila that they have to cooperate with the rest of society. Otherwise, magbo-blow up, magba-balloon talaga 'yung deficit natin," he said.
(It won't because as you know, their salary was doubled in 2018. I think they also understand that they have to cooperate with the rest of society. Otherwise, our deficit will blow up, balloon.)
The military pension covered 137,649 retired personnel in the first quarter of 2023, the Department of Budget and Management said.
In 2019, Marcos' predecessor, President Rodrigo Duterte certified as urgent a bill that would reform the pension system for uniformed personnel. It failed to pass the 18th Congress.