President Duterte has ordered his economic team to immediately address the ballooning pension requirement of uniformed personnel, which the government intends to address by developing military properties and forming a new pension scheme.
Finance Secretary Carlos G. Dominguez III told reporters recently that the Department of Finance and its consultant, George Ongkeko, last week presented the problem concerning armed personnel’s pension to the President and the heads of the Departments of National Defense, the Interior and Local Government, Justice and Transportation, as well as the chiefs of the Armed Forces of the Philippines, Philippine National Police, Philippine Coast Guard, and Bureau of Jail Management and Penology.
“We laid out to them the problem and the way to solve the problem. But we have to sit down together to work out the mechanism for solving this problem, which will involve turning over some of the real estate assets of the organizations to be able to set up a retirement fund which we are recommending to be managed by the GSIS (Government Service Insurance System) separately from the current pension system for government employees,” Dominguez said.
“The President asked us to move forward quickly and we have to make another presentation to him on the progress by the end of August,” Dominguez added.
Dominguez earlier said the government was eyeing joint ventures with private groups in developing massive military land to secure additional funding for uniformed personnel’s pension costs.
During the meeting, Dominguez reiterated that the current pension system for uniformed personnel was “not sustainable over the long run.”
Dominguez said the ballooning pension was already taking its toll on the country’s fiscal position.
“So far it’s affordable, but pretty soon it won’t be affordable so we are just anticipating a large problem. And hopefully we don’t leave the next administration with this problem because the last administration left us with this problem with no plan—at least we have a plan,” he said.
Pension benefits of uniformed personnel increase alongside the hikes in their salaries.
The Duterte administration was worried about the ballooning pension of uniformed personnel, such that the interagency Development Budget Coordination Committee (DBCC) was pushing for a seed fund worth trillions of pesos that would generate income for retired military officers.