Rising military, police pension a growing risk

The economic team will pitch to President Duterte by the end of this month a package of proposed pieces of legislation that will allow the government to temper the ballooning pension benefits of uniformed personnel.

During a Senate finance committee hearing on the proposed P3.757-trillion 2019 national budget on Wednesday, Budget Secretary Benjamin E. Diokno said part of the proposal was to require new recruits to pay contributions.

Separately, Finance Secretary Carlos G. Dominguez III said the package would be presented to the President before this month ends or by early September for his approval.

The economic team wanted to get the President’s endorsement to the legislature of some legislative measures that will address the fiscal risk, Dominguez said.

“I’m not sure we can save it all, but at least we can start something,” the Finance chief said.

The proposals will be aimed at reducing the P4-trillion requirement to pay the benefits of retired military and police officers over the long term, he said.

Diokno noted that under this year’s budget, they allocated P33 billion for retired uniformed personnel’s pension payouts, on top of the P63 billion for the salaries of those in active service.

For next year, the allocation for pension was a similar P33 billion, while pay as well as arrears for those still in service will reach about P119 billion, Diokno said.

In June, Diokno said that the government intended to establish a separate pension fund for uniformed personnel to be administered by the state-run Government Service Insurance System “for efficiency and economy purposes.”

Dominguez had said that the current pension system for uniformed personnel was “not sustainable over the long run” as well as “already taking a toll” on the country’s fiscal position.

At present, uniformed personnel enjoy indexation of benefits, which means that even when they retire, they still get increases in benefits similar to what active members receive.