Marcos wary of military pension reform's impact despite approval

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Metro Manila (CNN Philippines, May 15) – President Ferdinand Marcos Jr. is "very much concerned" about the impact of the proposed reform to the pension system of military and uniformed personnel (MUP) despite agreeing to the recommendations of his finance secretary.

Defense officer-in-charge Carlito Galvez Jr. appealed to senators during a hearing on Monday that the morale and welfare of Filipino soldiers be given due weight in the deliberation, "considering that the mere notion of modernizing our pension system it created already some sort of apprehension."

"In fact, the President also gave an instruction that he is very much concerned on the impact of this MUP [reform] on the morale and welfare of army personnel and policemen," Galvez said. "He wanted that there should be a continuous discussion to have the common ground."

In March, Finance Secretary Benjamin Diokno said he hopes the current administration agrees to overhaul the MUP pension system as the situation is "not sustainable." 

"I said if this goes on, there will be a fiscal collapse," he previously said.

Diokno's call was not new, as he also pushed for reform in the MUP's pension system during his budget secretary stint in the administration of former President Rodrigo Duterte, who approved the almost doubling of MUP's base pay.

Proposals for the reform include mandatory contributions, removal of automatic indexation of pension to the salary of active personnel of similar ranks, raising the pensionable age to 57 years old, and that these would apply to all active personnel and new entrants.

The proposals were agreed upon by Galvez and Interior Secretary Behur Abalos during a meeting with Marcos.

According to Diokno, the chief executive "approved" the proposals and that he was "part of the decision making."

"The President is recognizing the need for this. Talagang ipu-push niya [He would really push for it]," Diokno earlier said.

Economic managers reiterated in the Senate hearing that they were alarmed that expense for pension is bigger than the defense department's capital outlay.

Galvez said the Department of Defense is anticipating around 70% to 80% of enlisted personnel to retire if the pension system is reformed.