Reforming the “defects” of the military and uniformed personnel pension system will free up more funds for the country’s growing expenses in defending its territory, Albay Rep. Joey Salceda said on Monday.
Salceda, the chairman of the House Committee on Ways and Means, issued the statement ahead of a technical working group meeting to come up with an MUP pension reform bill that provides for mandatory contributions, and annual salary hikes for ten years.
His remarks also came more than a week after the Chinese Coast Guard used water cannons on a Philippine resupply mission en route to the Ayungin Shoal.
The BRP Sierra Madre had been deliberately run aground in the shoal to serve as an outpost in the West Philippine Sea.
“We need to resolve the MUP pension system’s fiscal defects so that we can move forward with devoting more of the national budget to credibly defending the country’s territory,” Salceda said.
“We are set to discuss contributions as one of the potential areas for deliberation. Capacity to pay is critical, but parity with civilian pension contributions has moral weight,” he added.
“Our expenditures are growing for defense, even as our MUP pension liabilities also grow. That is untenable. We have [to have] a solution that inflicts the least pain possible on all stakeholders,” Salceda said.
Salceda said the budget for the modernization of the Armed Forces of the Philippines in the proposed P5.768-trillion 2024 national budget has increased by 81.8% compared to the 2023 allocations.
“You need a credible navy and air force to defend the West Philippine Sea. While land forces received a 9.7 percent increase year-on-year, the air force received a 25.7 percent increase. The navy received 17.2 percent,” Salceda said.
“So, we need to solve the MUP pension system issues so we can keep investing in a formidable national defense,” he added.
China has been asserting its claims in the West Philippine Sea even after the Permanent Court of Arbitration upheld in 2016 the Philippines’ exclusive economic zone.
The arbitral award invalidated China’s historical claims anchored on its nine-dash-line map.
Salceda reiterated that aside from the mandatory pension contribution among MUPs, the current pension structure providing for pensionable age, retirement at one rank higher, optional retirement will be retained and that there will be a guaranteed 3% annual salary increase to all active personnel.
“That’s win-win because most of the time, MUP do not get salary hikes, but when they do, it’s at unpredictable rates. Our proposal makes the salary adjustment assured at a stable rate. There will be no shocks to our fiscal system,” Salceda said.
“On top of that, indexation stays, meaning pensioners will also get an assured increase in pensions for ten years. We will only limit indexation to 50% of the salary increase,” he added.
In addition, Salceda said an MUP Trust Fund would be established to augment MUP pension funding needs, and that military assets not in use will be infused into the MUP Trust Fund. —NB, GMA Integrated News
