(MALAYA) THE Senate yesterday passed on third and final reading a proposed measure seeking seeks to increase the monthly disability pension of veterans and their beneficiaries.
Voting 21-0-0, the Senate approved Senate Bill No. 1480 or the proposed Act Rationalizing the Disability Pension of Veterans which seeks to amend RA 6948 or an Act Standardizing and Upgrading the Benefits of Military Veterans and their Beneficiaries.
Once passed into law, the P1,000 monthly disability base rate will be increased to P4,500 or a hike of 350 percent.
Those receiving monthly disability pension of P1,200 will get P6,100 while those receiving P1,300 will get PP6,900; P1,400 to become PP7,700; P1,500 to P8,500; and 1,600 to P9,300.
Those presently receiving P1,700 a month, which is the highest disability rate, will get P10,000 or an increase of 488 percent.
The P500 monthly pension for the spouse and each unmarried minor child will be adjusted to P1,000.
Sen. Jose “Jinggoy” Estrada, principal author of the proposed measure, said the increase in disability pension is “long overdue.
“Our veterans who sustained disabilities and injuries in the line of duty have long waited for this legislation to update their monthly disability pension rates which have remained unchanged for 29 years,” said Estrada.
“This legislation is one way of honoring our military and veterans who served and defended our country in their prime and ensuring that in their twilight years, they and their families are accorded benefits and assistance,” he added.
He also thanked his colleagues in the Senate for supporting the passage of the bill, especially Senate minority leader Aquilino Pimentel III, who helped in refining the provisions of the measure.
A similar measure was filed at the House of Representatives (House Bill No. 2490) on July 27 last year and is still pending at the committee level.
Department of National Defense officer-in-charge Carlito Galvez Jr. yesterday appealed to lawmakers “to look into the possible middle ground” in the proposed reforms on the pension of military and uniformed personnel (MUPs) since it may have an adverse impact on the morale of MUPs.
Appearing before the Senate Committee on National Defense and Security, Peace, Unification and Reconciliation, Galvez said that President Marcos Jr. is “very much concerned” on the effects of the proposed reforms in the MUP pension plan.
“The President also gave an instruction, that he is very much concerned on the impact of this MUP (pension system) on the morale and welfare of our personnel and policemen and he wanted that there should be continuous discussion to have a common ground,” Galvez said.
Reforms in the MUP pension plan have been proposed by the Department of Finance since the government must spend P848.39 billion annually for the next 20 years to finance the current pension system.
The DOF also said that the present level of pension spending exceeds the spending to equip personnel who are in active service.
In 2021, the spending for MUP pension reached P160 billion, which is higher by 38 percent than the budget for maintenance and other operating expenses (MOOE) and capital outlays (CO) at P116 billion, adding that the present system is “simply not fiscally sustainable.”
The DOF said a unified separation, retirement, and pension system for MUPs is proposed in place of the piecemeal reforms which will apply to those in the active service, new entrants, and members of the MUP agencies.
The DOF said that under one proposal, MUP contribution to the pension system will be three percent of their salary for the first three years, and will increase to six percent after three years, and nine percent the years thereafter.
It said that there will be a government counterpart “so there’s an employee-employer contribution.”
The DOF also proposed that MUPs who will retire, regardless if they availed of the early retirement, will receive their pensions upon reaching the age of 57.
The DOF said Marcos is “okay” with the proposals to reform the MUP pension system since failure to do so would lead to a fiscal collapse
Galvez said the proposal created “some sort of apprehension” among the MUPs.
“At present, mere discussions of proposal related to retirement benefits, most especially the imposition of pensionable age, has already affected the morale and caused uneasiness not only from within the active ranks of the armed forces, but even from our veterans and retirees, (as well),” Galvez said.
“…We anticipate around 70 to 80 percent of enlisted personnel eligible for optional retirement, ito po yung naka 20 years na sa serbisyo (these are those who have reached 20 years in the service), to avail of the same given the uncertainty of them immediately receiving pension upon retirement should the system be overhauled,” he added.
Galvez said the proposal to cut the lump sum to retirees from 36 months of their salaries to 18 months is also being opposed by the MUPs.
He said that the MUPs “are amenable and open to modifications” in the pension system “so as long as these are fair and equitable (to) the military.”
“At the end of the day, ensuring a fair and equitable retirement and pension is the least we can for the brave men and women of the AFP who continue to lay their lives on the line protecting the Filipino people and defending the Philippines,” Galvez said.
In the same hearing, National Treasurer Rosalia de Leon said the government’s economic team is proposing to apply the new system to active and new entrants.
She said the adjustment of pension benefits will be up to 1.5 percent within a given year subject to the evaluation of economic conditions and actuarial life of the pension funds.
She said the dependence on full government funding makes the pension system susceptible to economic and fiscal downturns, which will create unstable and unpredictable benefit system for MUPs and their dependents.
“The threat that the government will be unable to meet its pension commitments or improve the country’s defense posture is real. We are already spending more on pension liabilities than on keeping our military and uniformed services safe, competent, and in fighting shape,” De Leon said.
She said pensions and adjustments are “granted as a gift under full discretion of the national government, without vested ownership of military and uniformed personnel.”
She said that the unfunded liabilities of the MUP pension is around P9.6 trillion or 53.4 percent of the country’s Gross Domestic Product in 2020, adding that the pension liabilities is expected to increase further in the coming years.
PENSION REFORM BILL
The government’s economic team is set to convene a technical working group (TWG) to discuss and craft a bill that will address the proposed reforms to the military and uniformed personnel (MUP) pension system.
The Department of Finance (DOF) said in a statement that the TWG will be composed of representatives from involved agencies and stakeholders.
National treasurer Rosalia De Leon stressed the economic team’s desire to work closely with the MUP agencies as reform partners.
“In the spirit of cooperation, the economic team has and will continue to engage our military and uniformed personnel and stakeholders in shaping this reform,” she said.
There are currently two bills on MUP pension reform filed in the Senate: Senate Bill Nos. 284 and 1421 proposed by Senators Jinggoy Estrada and Bong Revilla Jr., respectively.
De Leon, during a public committee hearing at the Senate yesterday, underscored the intention of the proposed reforms to enhance pension security and predictability.
“First, we must establish a strong, sustainable and robust social protection system that all MUP can rely on in old age. The proposed MUP pension reform aims to establish a strong social protection system that can provide a dignified post-retirement income that MUP retirees can rely on in their old age,” de Leon said.
The hearing was convened by the Senate Committees on National Defense and Security, Peace, Unification and Reconciliation joint with Government Corporations and Public Enterprises; Ways and Means; and Finance.
Representatives from various MUP agencies, such as the Department of National Defense, Philippine National Police, Philippine Coast Guard, Bureau of Jail Management and Penology, Bureau of Fire Protection, Bureau of Corrections, as well as stakeholders from the National Mapping and Resource Information Authority and Philippine Veterans Affairs Office, shared their views on the reform and proposed recommendations. – With Angela Celis