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SONA 2020 Promise Tracker: Armed Forces

By Elijah Roderos
Jul 22, 2021 7:04 PM

In his 2020 State of the Nation Address (SONA), President Rodrigo Duterte asked Congress to prioritize the approval of a bill that will provide a unified system of separation, retirement, and pension for the military and uniformed personnel (MUP).

“There is a need to adjust the pension system which will be applicable only to newly hired uniformed personnel so as not to cause a ballooning effect against the budget of the military in the years to come and yet maintain the pension benefits of those already in service under the present law. This issue needs a solution now. Umpisahan natin ngayon para hindi na maging problema sa susunod na mga taon (Let’s begin it now so it won’t become a problem in the years ahead),” Duterte said.

This was the only mention in the president’s previous SONA that involved the Armed Forces of the Philippines (AFP). He has been asking Congress to legislate the MUP pension reform since 2016.

In his budget message for 2017, Duterte said the pension reform “shall be pursued in view of the ballooning budget burden where the total cost of the pensions of retired soldiers will exceed the compensation of those in the active service.”

The proposed law, he said, will “create a pension fund that is similar to or part of the Government Service Insurance System (GSIS)” that will replace the current system where the pensions of the military and other uniformed personnel come from the annual General Appropriations Act.

The proposed MUP pension reform was in line with the findings of the Development Budget Coordination Committee (DBCC), in its Fiscal Risks Statement (2015-2016), that pension cost of all uniformed services was rapidly increasing every year. From a pension budget of P71 billion in 2016, it was projected to reach P187.9 billion, or more than double, in eight years.

In a statement released on June 15, the DBCC said actual MUP pension spending has grown at an average rate of 12.3% from 2010 to 2019. As a result, spending for the MUP pension has already exceeded those for capital outlay and maintenance and other operating expenses of the military and uniformed service.

Bills on the MUP pension system are still pending at the committee level both in the Senate and the House of Representatives.

In the Senate, Sen. Ralph Recto filed the first bill when the 18th Congress was convened in July 2019, followed by Sen. Imee Marcos two months later. Duterte’s closest allies, Sens. Christopher “Bong” Go and Ronaldo “Bato” Dela Rosa, separately filed similar bills in March and September 2020, respectively. The committee on national defense and security, peace, unification and reconciliation has been conducting public hearings on the bills.

In the House, an ad hoc committee has consolidated 16 bills and one resolution which provide, among others, the disposition of selected government assets to raise funds for the pension system.

The bill covers not only soldiers but also the uniformed personnel of the Philippine National Police (PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP), Bureau of Jail Management and Penology (BJMP), Bureau of Corrections (BuCor), and the hydrography branch of the National Mapping and Resource Information Agency (NAMRIA).

The current MUP pension scheme has an estimated accumulated unfunded liabilities amounting to P9.6 trillion or 53.4% of the 2020 gross domestic product (GDP), according to Rep. Joey Salceda, chair of the House ad hoc panel.

If reforms would not be implemented, Salceda warned, the MUP pension liabilities will continue to balloon and result in an economic contraction of 7.2% in the country’s GDP by 2030, which is far worse than the impact of the financial crisis in 2008. Also, public debt will increase by as much as 25% in nine years.

In the June 15 statement, the DBCC — composed of the secretaries of the budget and finance departments, socio-economic planning secretary, and governor of Bangko Sentral — pressed on Congress to pass a ”fiscally sustainable version” of the MUP pension reform to “protect the gains” made from other “game-changing fiscal and economic reforms” that enabled the country to weather the worst impacts of the coronavirus disease 2019 (COVID-19) pandemic.

“Without funding sources to support this growing expenditure, the MUP pension system, as well as the fiscal stability of the national government, is at serious risk,” the DBCC said.

Apart from the MUP pension, some of the president’s other promises involving the AFP in previous years have yet to be fulfilled.

See how the Duterte administration fared in this sector:

PROMISE: Pass law on unified pension system for uniformed personnel

“I call on Congress to prioritize the passage of a law for the Unified System of Separation, Retirement and Pension of the Military and Uniformed Personnel without however diminishing the benefits that our uniformed personnel are entitled to under existing laws.” (SONA 2020)

“We expect support for legislative initiatives aimed at strengthening defense related systems such as the proposed … the Unified Military and Uniformed Personnel Separation, Retirement, and Pension Bill…” (SONA 2019)

IN PROGRESS

At least five measures are pending in the Senate committee on national defense.

In early June, the House of Representatives created an ad hoc panel on the military and uniformed personnel (MUP) pension system.

Chaired by Albay Rep. Joey Salceda, the committee consolidated 16 bills and one resolution in House Bill No. 9654 last June 9.

Two weeks later, the committee approved the substitute bill, retaining the MUP pension scheme but setting a cap on the salary increases.

“The average nominal wage increase over the last 5 years is 4.2%. Over the last 10 years, the growth has been 4.4%. So, if that cap is imposed, the MUP (is) still in a privileged place compared to others. This is part of our commitment to recognizing the inherent risks of their job,” Salceda was quoted as saying in various news reports.

On Feb. 20, the Department of Budget and Management released P2.85 billion for the 2018 differential of retired MUPs, according to a press release.

“The total requirement to cover the 2018 pension differential of retired MUPs amounts to P34.20 billion. This leaves a balance of P31.35 billion which is yet to be released subject to the availability of funds and in compliance with applicable rules and regulations,” it added.

PROMISE: Enact a National Defense Act

“We expect support for legislative initiatives aimed at strengthening defense related systems such as the proposed National Defense Act…” (SONA 2019)

IN PROGRESS

Seven bills seeking to strengthen the DND remain pending in the committee on national defense and security, peace, unification and reconciliation since those were filed in 2019 and 2020.

In the House, at least 16 similar proposals are pending in the committee on national defense and security.

PROMISE: Provide free legal assistance to “unjustly sued” uniformed personnel

“We are aware of the fact that there are times in which the AFP and PNP personnel, while in the performance of their duties, get unjustly sued. Providing them with free legal assistance to help and boost their morale.” (SONA 2019)

IN PROGRESS

The bill filed by Sen. Christopher “Bong” Go has remained untouched since Duterte’s SONA in 2019 while six proposals are pending in the House of Representatives.

PROMISE: Rehabilitate military hospitals

“July nagpunta na ako sa Davao … sa AFP Medical Center… then I saw the building and I went inside. Iyong drainage nila bumabalik, so I said … you know I’m really surprised. You know, military men, why would you allow that kind of thing? The dirt is going back to the … how do you expect the sailors to—the soldiers to get well? Tapos that’s the only building, the oldest. I said, okay, you rehabilitate it, I’ll give you a new one, in the meantime.” (SONA 2017)

IN PROGRESS

On June 17, Camp General Emilio Aguinaldo Station Hospital with 25-bed capacity was inaugurated by Armed Forces of the Philippines (AFP) Chief Gen. Cirilito Sobejana.

The project was completed through inter-agency fund transfer from DOH and TIKAS (Tatag ng Imprastraktura para sa Kapayapaan at Seguridad) Project 2020 under the DND-DPWH “Build, Build, Build” program.

Meanwhile, a 50-bed hospital in Capiz is in the pipeline.

Sources

Presidential Communications Operations Office, 5th State of the Nation Address of Rodrigo Roa Duterte, July 27, 2020 (archived)

RTVMalacañang YouTube, President Rodrigo Duterte’s 5th State of the Nation Address (SONA), July 27, 2020 (archived)

Department of Budget and Management, The President’s Budget Message: Fiscal Year 2017 pg. 24-25, Aug. 15, 2016 (archived)

Department of Budget and Management, About the DBCC, Jan. 7, 2020 (archived)

Department of Budget and Management, Fiscal Risks Statement (2015-2016) pg. 28 (archived)

Department of Finance, Joint DBCC Statement on the MUP Pension System Reform, June 15, 2021 (archived)

House of Representatives, Committee Daily Bulletin: Ad Hoc Committee on Military and Uniformed Personnel (MUP) Pension System, Briefing on HB 9271, May 31, 2021

On passing a unified MUP pension system act

On enact a national defense law

On providing free legal assistance to unjustly sued uniformed personnel

On rehabilitating military hospitals


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)

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