The Philippines’ House of Representatives has legislation to reform the military and uniformed personnel pension system, including mandated contributions for new fund members.
The bill was approved at the final reading on September 28.
Philippine military and uniformed personnel do not currently contribute to pensions. That will change once the new law becomes effective. New military members will then have to contribute 9% of their salaries to their pension fund, while the government will contribute 12%.
The pension reform bill also guarantees military personnel an annual salary increase of 3% over ten years.
It also raises their compulsory retirement age from 56 years to 57 years, or once they have accumulated 30 years of active service, whichever is later. They will also be able to retire voluntarily after 20 years of service.
According to House Speaker Martin Romualdez, a principal author of the bill, the legislation will “rationalise the pension system of granting monthly pension and other benefits to military and uniformed personnel in a way that is fair to them and the national government.”.
“This landmark legislation demonstrates our unwavering commitment to the men and women in uniform, who risk their lives daily to maintain peace and order,” he said.
Finance Secretary Benjamin Diokno had earlier this year warned of fiscal collapse if the military pension system was not reformed.
Diokno said the government spends more on military pensions than on the operating and capital expenditure of the Philippine Armed Forces, with 120 billion pesos-130 billion pesos (US$2.2 billion-$2.39 billion) set aside for the pensions this year, up from 114.7 billion pesos in 2020.