The proposed reform in the military and uniformed personnel's pension system, being pushed by Finance Secretary Benjamin Diokno, is crucial in stabilizing the country's fiscal position, Moody's Investors Service Sovereign Risk Group Senior Vice President Christian De Guzman said on Friday.

Diokno told the Senate Finance Committee that the current pension system, where the government shoulders the pension of MUPs, must be revisited since it could cause a "huge problem" in the future.

Diokno said the government's liability to the MUP pension is at P9 trillion as of May.

"Military pension reform is indeed going to be one of those things that will send the fiscal path on a more sustainable trajectory," Moody's Investors Service Sovereign Risk Group Senior Vice President Christian De Guzman told ANC.

"This does not cause immediate risk in 2023 or 2024 but as you go out, as these pensions start to escalate over time, that is going to weigh on the government's ability to get that debt back down. So I'm not sure If we're talking about a crisis in 2023 or 2024... but clearly, it's an important part of fiscal repair," he added.

Meanwhile, De Guzman said Moody's is looking at revising its 2023 gross domestic product forecast for the Philippines "to something more realistic" following a lower-than-anticipated second quarter economic growth.

The country's economy expanded by 4.3 percent in Q2, lower than the 6.4 percent in the first quarter of 2023.

Growth could be "under 6 percent" for the full year, De Guzman said. Meanwhile, the government expects the economy to grow by 6 to 7 percent.