Gov’t plans disposition of military assets to augment ballooning pension

Besides the plan to establish a new pension system for uniformed personnel, the government will also sell, lease or enter into joint ventures to commercially develop former military camps to augment ballooning costs for benefits of retired officers, Budget Secretary Benjamin E. Diokno said.

During a Cabinet meeting this month, economic managers presented to President Rodrigo Duterte military assets in Fort Bonifacio, the Visayas, as well as Mindanao that can be disposed of to fund not only the Armed Forces of the Philippines’ modernization program but also uniformed personnel’s pension.

Asked what was the President’s response, Diokno said they have yet to discuss with Mr. Duterte the problem on ballooning military pension, which could cost as much as P7-8 trillion.

“I am sure he [the President] will appreciate that. In fact, the military appreciates it that we’re addressing this problem. We want a secure, sustainable pension system for them,” Diokno told reporters recently.

The Budget chief said there was close to 200 hectares of military land in Fort Bonifacio in Taguig City, huge chunks of land in the Visayas, as well as about 200,000 hectares of property near Bukidnon, some which can be sold, leased for long term, or developed through a joint venture with the private sector.

At present, proceeds of the properties being disposed by state-run Bases Conversion and Development Authority (BDCA) go to the AFP modernization program, as mandated under the BCDA charter.

Diokno said they needed to pass a law that will also allow part of the proceeds from disposition of properties to fund military pension.

The Budget chief was optimistic they soon can find a sponsor in Congress for the proposed legislation. “It’s really urgent.”

The government was also looking into a new pension system for uniformed personnel, possibly by including them under the coverage of the state-run pension fund Government Service Insurance System.

For next year, P75 billion will go to uniformed personnel’s pension payments, and could balloon to up to 80 percent of the AFP’s annual budget if left unaddressed, Diokno said.

The Duterte administration was worried about the ballooning pension of uniformed personnel, such that the interagency Development Budget Coordination Committee (DBCC) is pushing for a seed fund worth trillions of pesos that will generate income for retired military officers.

In its Fiscal Risks Statement 2017 report, the DBCC noted that the “problem” on ballooning pension costs for uniformed personnel was “mainly attributable to the features present in all existing retirement laws of the uniformed services—pension entitlement of a retiree is automatically adjusted based on the prevailing scale of base pay for similarly ranked active personnel; pension is non-contributory in nature hence budget comes from the annual general appropriations of the government; and early entitlement to pension benefits even before attaining the compulsory retirement age of 56.”

Early this month, President Duterte urged the military to lease out its remaining lands in Fort Bonifacio to raise more funds for its modernization program.

The President said leasing out military land in Fort Bonifacio—the location of the headquarters of the Philippine Army and the Philippine Marines, as well as Bonifacio Naval Station—would raise “trillions” of pesos for the AFP.

The government privatized 240 hectares of military land in Fort Bonifacio in the early 1990s to support the AFP modernization program. /je