The Philippines’ House of Representatives is expected to approve legislation to reform the military and uniformed personnel pension system when the bill comes up for final reading next week, CNN Philippines reports, citing House Speaker Ferdinand Martin Romualdez.
Key provisions in the bill include mandating new members to contribute 9% of their salaries to their pension fund, and for the government to contribute 12%. Currently, Philippine military and uniformed personnel do not make pension contributions.
The pension reform bill also provides a guaranteed annual salary increase of 3% over ten years.
“We are on track to approve the bill before the October recess (of the House),” Romualdez is quoted as saying in the report on September 21.
Finance Secretary Benjamin Diokno had earlier this year warned of fiscal collapse if the military pension system was not reformed.
He said the government now spends more on military pensions than on the operating and capital expenditure of the entire Philippine Armed Forces, with 120 billion pesos-130 billion pesos (US$2.2 billion-$2.39 billion) set aside for pensions this year, up from 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,” Diokno said in March.