Ignoring the ballooning military pension costs could lead to a fiscal collapse, the country's finance chief warns. Failure to find a delicate balance on the reforms, however, could trigger a mass retirement among uniformed personnel.
— Less than a year in, grievances over major changes within the military have already hounded President Ferdinand Marcos Jr.’s term.signed by his predecessor, Marcos now has to tread carefully as he backs the proposal to reform the pension system for the military and other uniformed personnel , which economic managers said is unsustainable.
As Diokno argued as early as a decade ago:"Nobody's contributing, yet the number of claimants is rising." Its current structure has unique features that economic managers said hurt the nation's fiscal health, and which they want changed. Diokno said they propose that reforms apply to all active personnel and new entrants.
Another unique feature – which Marcos' team wants removed – is that the MUP pension is automatically indexed to the salary of active personnel of the same rank. This means that if the salary of those in service is doubled, retirees would see their pension jump by 100%. Unlike most other Filipinos who have to reach 60 to 65 years of age in order to retire, there is currently no minimum pensionable age for MUP, so long as they have rendered at least 20 years in active service. This means that if someone has been in duty at 20 years old, he can already receive a monthly pension at 40 years old if he opts to avail of an optional retirement.
De Leon pointed out that last year, government spending for MUP pension was bigger than for MUP agencies' capital outlays, and maintenance and other operating expenses . Capital outlays are appropriations spent for the purchase of goods and services, the benefits of which extend beyond the current year and which add to government assets.
"'Yung bill na bago ngayon, Sir, just in case na magkaroon din ng ganung mga kwento, bababa 'yung benefit, baka magkaroon din ng additional…Mag optional retirement na, Sir [The new bill now, Sir, in case there are similar stories that there will be lower benefits for pensioners, the number of optional retirees may increase]," PMGen. Robert Rodriguez, head of the PNP Directorate for Personnel and Records Management, also told a Senate hearing.
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