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 |
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“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) |
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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 |
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“We expect support for legislative initiatives aimed at strengthening defense related systems such as the proposed National Defense Act…” (SONA 2019) |
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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 |
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“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) |
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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 |
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“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) |
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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
- Senate of the Philippines, SB 1864: Military and Uniformed Personnel Services Separation, Retirement, and Pension Act, Sept. 30, 2020 (archived)
- Senate of the Philippines, SB 1785: Prescribing Fixed Terms for the Chief-of-Staff and other Key Officers of the AFP, Aug. 24, 2020 (archived)
- Senate of the Philippines, SB 1419: Military and Uniformed Personnel Services Separation, Retirement, and Pension Act of 2020, March 23, 2020 (archived)
- Senate of the Philippines, SB 1042: Military and Uniformed Personnel Retirement and Pension Reform Act of 2019, Sept. 11, 2019 (archived)
- Senate of the Philippines, SB 755: Military and Uniformed Personnel Insurance Fund Act, July 24, 2019 (archived)
- House of Representatives, Ad Hoc Committee on the Military and Uniformed Personnel (MUP) Pension System
- House of Representatives official Facebook, Ad Hoc Committee on Military and Uniformed Personnel (MUP), June 9, 2021
- Inquirer.net, Military pension scheme stays but House ad hoc panel puts cap on salary hike, June 23, 2021
- Business Mirror, House ad hoc body finds ‘win’ solution in MUP pension issue–lawmaker, June 23, 2021
- Philippine News Agency, House panel retains MUP pension scheme, adds ‘salary caps’, June 23, 2021
- Rappler, New House bill ‘simplifies’ MUP pension reform, seeks cut in salary hike, June 23, 2021
- Department of Budget and Management, Press Release: DBM Releases P2.85 Billion for the FY 2018 Pension Differential of Retired MUPs, Feb. 20, 2021 (archived)
On enact a national defense law
- Senate of the Philippines, SB 1871: Self-reliance Defense Posture Revitalization Act,, Oct. 5, 2020
- Senate of the Philippines, SB 1707: Defense Procurement Act, July 20, 2020
- Senate of the Philippines, SB 249: The National Defense Act of 2019, July 8, 2019
- Senate of the Philippines, SB 304: Philippine Defense Industry Development Act of 2019 or PDIDA, July 10, 2019
- Senate of the Philippines, SB 1046: Granting the Bases Conversion Development Authority in the Creation of New Military Bases, Sept. 16, 2019
- Senate of the Philippines, SB 1143: Philippine Navy Archipelagic Defense Act, Nov. 5, 2019
- Senate of the Philippines, SB 1321: Special Defense Economic Zone (SPEDEZ) Act, Feb. 4, 2020
- House of Representatives, HB 206: Philippine Defense Industry Development Act of 2019, July 1, 2019
- House of Representatives, HB 550: The National Defense Act of 2019, July 1, 2019
- House of Representatives, HB 554: Act Amending Administrative Code of 1987 by prohibiting a person from being appointed as secretary of DND within three years after relief, July 1, 2019
- House of Representatives, HB 3085: The National Defense Act of 2019, July 30, 2019
- House of Representatives, HB 3157: The National Defense Act of 2019, July 30, 2019
- House of Representatives, HB 3211: Military Transition Assistance Act, July 31, 2019
- House of Representatives, HB 3298: The National Defense Act of 2019, July 31, 2019
- House of Representatives, HB 4304: Strategic Areas for Security and Development Act, Sept. 2, 2019
- House of Representatives, HB 4703: Defense Acquisition Act of 2019, Sept. 19, 2019
- House of Representatives, HB 4708: National Defense and Security Act of 2019, Sept. 19, 2019
- House of Representatives, HB 4788: Defense Acquisition of 2019, Sept. 23, 2019
- House of Representatives, HB 5928: The National Defense Act of 2019, Jan. 8, 2020
- House of Representatives, HB 6490: Defense Acquisition Act of 2019, March 4, 2020
- House of Representatives, HB 6630: Defense Acquisition Act, April 28, 2020
- House of Representatives, HB 7594: The National Defense Act of 2020, Sept. 7, 2020
- House of Representatives, HB 9414: Philippine Defense Industry Development Act of 2021, May 24, 2021
On providing free legal assistance to unjustly sued uniformed personnel
- Senate of the Philippines, SB 393: Free Legal Assistance to Any Officer or Enlisted Personnel of the AFP and PNP, July 11, 2019
- House of Representatives, HB 2499: Providing legal assistance to any officer or enlisted uniformed personnel,, July 23, 2019
- House of Representatives, HB 3141: Providing legal assistance to any officer or enlisted uniformed personnel,, July 30, 2019
- House of Representatives, HB 3929: Providing legal assistance to any officer or enlisted uniformed personnel,, Aug. 14, 2019
- House of Representatives, HB 4312: Providing legal assistance to any officer or enlisted uniformed personnel,, Sept. 2, 2019
- House of Representatives, HB 5972: Free Legal Assistance Act for Enlisted Personnel of the Armed Forces of the Philippines and the Philippine National Police, Jan. 21, 2020
- House of Representatives, HB 7842: Police Officers’ Legal Assistance Act, Oct. 6, 2020 (archived)
On rehabilitating military hospitals
- Armed Forces of the Philippines, Press Release: Completion of New Barracks, Station Hospital to enhance quality health service in Camp Aguinaldo, June 17, 2021 (archived)
- Philippine News Agency, Hospital to rise in military camp in Capiz, July 6, 2021 (archived)
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