The Philippine government is pushing to reform pensions for military and uniformed personnel, with Finance Secretary Benjamin Diokno warning of fiscal collapse otherwise.
The reform includes raising the retirement age for uniformed personnel from 56 to 57 years, as well as mandatory contributions for all active members and new entrants, like in the civil service and private sector pension funds.
According to Diokno, President Ferdinand Marcos Jr, Defence officer-in-charge Carlito Galvez and Interior Secretary Benhur Abalos agreed to the plan at a recent meeting.
“President Marcos Jr has approved the proposal, it has to pass Congress,” he told reporters at a media briefing on March 28.
He said the government now spends more on pensions for uniformed personnel than the operating and capital expenditure of the entire Armed Forces of the Philippines, with 120 billion-130 billion pesos (US$2.2 billion-$2.39 billion) set aside for this year compared with 114.7 billion pesos in 2020.
“Right now the situation is so bleak…So, we have to really address that issue. It is not sustainable. If this goes on, there will be a fiscal collapse,” he said.
He said the average monthly pension for military personnel is around 40,000 pesos compared to 13,600 pesos for members of the Government Service Insurance System, a pension fund for civil servants. The average for the Social Security System, a pension fund for private sector employees and the self-employed, is just 4,528 pesos.
Diokno pointed out that uniformed personnel who have been in active service for at least 20 years can currently opt for optional retirement, which means those entering the service at 20 can become eligible for pension in their 40s.