By Kyle Aristophere T. Atienza, Reporter
THE FINANCE DEPARTMENT on Tuesday warned of a potential “fiscal collapse” ought to the federal government fail to reform the pension system for retired army and uniformed personnel (MUP).
At a Palace information briefing, Finance Secretary Benjamin E. Diokno mentioned President Ferdinand R. Marcos, Jr. will push for the passage of the invoice looking for to reform the MUP pension program, saying the present setup is unsustainable and will result in “fiscal collapse.”
The authorities has put aside P120-130 billion for the pension program for this 12 months alone, Mr. Diokno mentioned.
“Right now, the situation is so bleak. For example, if you compare the current operating expenditures, the maintenance and operating expenditures of the whole AFP (Armed Forces of the Philippines) with the capital outlays… it is actually much less than the amount of pension that we are allocating for the retirees,” he mentioned.
Mr. Diokno warned that the pension for retired army and uniformed personnel may account for as a lot as one-third or one-fourth of the AFP’s finances sooner or later.
“It’s not sustainable. I said if this goes on, there will be a fiscal collapse,” he added.
The MUP pension program covers members of the AFP, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine National Police, Philippine Public Safety College, Coast Guard, and Bureau of Corrections.
‘RIDICULOUS’
Mr. Diokno mentioned that below the present setup, the pension of retired personnel will increase by 100% when the wage of the incumbent personnel is doubled.
He famous {that a} army or uniformed personnel who chooses to retire after 20 years of service can already obtain a pension, since there isn’t a minimal “pensionable” age. Some personnel even get recruited on the age of 20 to allow them to retire by 40, he added.
“Military people, they live longer than us…some at the age of 90. So, they retire at 40 to get their pension up to age 90. Isn’t that ridiculous,” Mr. Diokno mentioned.
The common month-to-month pension of a army personnel is round P40,000, in accordance with the Finance chief.
“Compare that to what SSS (Social Security System) retirees get, it’s P4,528 and what a GSIS (Government Service Insurance System) personnel get, P13,600,” he mentioned. “So the pension that is received by a military pensioner is nine times higher than the average pension of a pensioner under SSS and three times higher than the average pension under GSIS.”
POLITICAL CAPITAL
As a part of the MUP pension reform, Mr. Diokno mentioned they need to require all energetic army personnel and new entrants to contribute to their pension, as an alternative of the federal government totally funding it.
“All those who are in active service and new recruits will have to pay their way, no longer free. There’s unanimity. We talked to [Defense] Sec. [Carlito G.] Galvez, [Jr.], we talked to [Interior] Sec. Benhur Abalos and they generally agreed with all the four [options],” he mentioned.
The Finance chief additionally proposed to cease routinely indexing the retirees’ pension to the wage of energetic personnel of comparable ranks, and to lift the age that army and uniformed personnel get their pension to 57 from the present 56.
The proposed reform can be utilized to all energetic personnel and new entrants, he added.
Mr. Diokno expressed confidence that the invoice can be handed by Congress this 12 months, saying the President is “willing to risk his political capital for this.”
“Mr. Marcos also has very strong control of both Houses of Congress — so it’s going to be less problematic for him to push forward such a major reform.”
The Finance chief doesn’t imagine the proposed reforms would demoralize army and uniformed personnel, saying the federal government had already doubled their wage in 2018.
“I think they also understand that they have to cooperate with the rest of society. Otherwise, our deficit will blow up.”
The MUP pension program lined 137,649 retired personnel within the first quarter of 2023, the Budget division mentioned in January.
The proposed MUP pension reform is among the many legislative priorities of the Marcos administration. It remains to be pending on the committee degree in each homes of Congress.
“We need to pass the MUP pension bill as the current set up might lead to disintegration of the pension as a whole,” House Public Order and Safety Committee Chairman and Santa Rosa City Rep. Dan S. Fernandez mentioned in a Viber message.
Mr. Fernandez mentioned they’re simply ready for the House protection panel, the lead committee, to name for a listening to on the invoice.
“The pension for AFP-DND (Department of National Defense) for 2021 was 112% of base pay while in the PNP, the pension was 50% or one half of base pay of active policemen. The average pension of all MUP was 70% of [their] base pay,” he mentioned.
The lawmaker famous that the pension of a retired AFP member is bigger than the bottom pay of an energetic soldier.
“A retired general can get as much as P190,000 monthly pension for life which will redound to a P800-billion budget for the next 20 years,” he mentioned.
An identical invoice was licensed as pressing by former president Rodrigo R. Duterte in 2019, nevertheless it didn’t move the 18th Congress.
“The challenge might be on retiring personnel who do not have enough safety nets or have not transitioned towards managing investments,” Hansley A. Juliano, a political financial system researcher, mentioned through Facebook Messenger chat.
“This doesn’t even include retiring officers who are receiving larger sendoffs. If there’s a sizable [number] of them complaining or who are serving as the constituencies of certain politicians or political parties, you can expect them to be the basis of opposition to the bill,” he mentioned.
Mr. Juliano mentioned the invoice may additionally set off opposition from households of army and uniformed personnel.
“It is very likely that families who will be vulnerable will lobby against the bill. House members who tend to maintain ‘clientelistic’ ties to these communities will likely be forced to choose to either please the constituency or obey the President.”
