(PHILSTAR) MANILA, Philippines — Active military and uniform personnel (MUP) rejected the proposed five percent contribution for their pension as proposed by the administration’s economic managers to address fiscal collapse, Sen. Jinggoy Estrada said yesterday.
During the Kapihan sa Senado forum, Estrada said stakeholders have a lot of concerns with the five to nine percent contribution as initially proposed by the Marcos administration’s economic team.
“Other stakeholders still have many concerns about the proposed contribution. They perceived it to be burdensome, especially among low-ranking MUPs. There are 163,000 enlisted personnel, they may not be able to afford the five percent contribution, the enlisted personnel are of low rank like casual laborers. Some of them have to borrow money even before they receive their salary. We can’t blame them,” Estrada said.
Under the proposal, MUPs in active service contribute five percent of their monthly pay to their retirement fund for the first three years of a plan to reform their pension system.
The new entrants to the uniformed services would be contributing nine percent of their basic salary and longevity pay.
Estrada said there are about 163,000 enlisted personnel who may not be able to afford the five percent contribution for their pensions.
“The five percent contribution might be too high. A low-rank enlisted personnel earns from P29,000 to P38,000, if you remove five percent that’s a big deal for them,” the senator noted.
Five percent of P29,000 to P38,000 is P1,450 to P1,900.
Estrada, chairman of the Senate committee on national defense, presided over a public hearing on the MUP pension to discuss reform in the system as Finance Secretary Benjamin Diokno earlier warned of an imminent “fiscal collapse” with total yearly payouts to MUP.
This year, the MUP pension payout is about P213 billion and it is expected to reach the P1-trillion mark by 2035.
Those covered by the current MUP pension system are members of the Armed Forces of the Philippines, Philippine National Police, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine Public Safety College, Philippine Coast Guard, Bureau of Corrections and National Mapping and Resource Information Authority.
Unlike other state and private employees, MUPs are not contributing any amount from their salaries to their retirement fund, which is allocated yearly from the national budget.
Estrada said the committee will not rush the passage of the measure as there are still a lot of concerns, which he hoped to address with the planned roadshow and further consultations.
The senator said he will still meet with Defense Secretary Gilbert Teodoro and the economic managers and he is open to conducting another hearing on the matter before this is tackled in plenary.
When asked whether the five to nine percent scheme can be adjusted and lowered, Estrada said the target of addressing the fiscal concerns might not be met. “Maybe we might not meet the target when we lower the scheme,” Estrada noted.
“They used to contribute to the RSBS (AFP Retirement and Separation Benefits System), that’s why when the RSBS became defunct, it stopped,” he explained.
Estrada said he recommended that since the RSBS has many properties, the economic managers can source funds from them.