No increase in AFP pension – DBM

MANILA, Philippines — There will be no increase in the pension benefits of uniformed personnel despite the planned increase in the salaries of those in active service by 2018, according to the Department of Budget and Management (DBM).

In an interview, Budget Secretary Benjamin Diokno said the pension benefits of uniformed personnel would remain at their current level while the government is still studying the reforms needed in the military pension scheme.

This comes amid the proposed increase in the monthly salary base of soldiers, police, firefighters and jail guards as laid out in a draft joint resolution submitted by the DBM to Congress earlier.

   “There is a provision in the joint resolution (for the military salary hike) that the (pension) will be set at the 2017 level, it will not be automatically adjusted,” Diokno yesterday told reporters on the sidelines of the 43rd Philippines Business Conference and Expo in Manila.

Under the current military pension scheme, the pension entitlement of a retiree is automatically adjusted based on the prevailing scale of base pay for similarly ranked active personnel.

If not repealed in the joint resolution, this would entail further increase in the pension cost for uniformed personnel, an issue that has been identified by the inter-agency Development Budget Coordination Committee (DBCC) as a fiscal risk for the country.

Diokno said the studies for the possible military pension reforms may be finished by the first quarter of 2018.

“Maybe by first quarter next year we would already have a plan. Maybe that plan would involve the GSIS (Government Service Insurance System) because they (uniformed personnel) are government workers, after all,” the budget chief said.

Economic managers had been mulling the integration of the military pension system into the GSIS. The initial actuarial study of the GSIS showed the government may need to infuse some P7 trillion into the state fund for the takeover.

Diokno had said to fund this requirement, the government will ensure that part of the proceeds from the sale and lease of military assets will go to the GSIS.

“In addition, I am sure there will be a lump sum transfer to entice GSIS to take over, give them a one-time payment,” he had said.

Earlier, Diokno said President Duterte has endorsed to Congress a draft joint resolution calling for the raise in the salaries of military personnel.

If signed by both houses of Congress, the DBM said the joint resolution will result in a 58.7 percent average increase in base pay for all military and uniformed personnel ranks, effective Jan. 1 of next year.

In particular, the base pay of a police officer in the Philippine National Police (PNP), a private in the Department of National Defense (DND), and equivalent ranks in other law enforcement agencies will enjoy a 100 percent increase in their monthly base pay to P29,668 from the current P14,834, the DBM said.

According to DBM estimates, the increase in the base pay of soldiers, police, firefighters and jail guards will entail an additional cost of P63.4 billion.