‘MUP reform to ensure pension payoff in long run’

MANILA, Philippines — The economic team reiterated that the government would be able to pay off the retirement benefits of the country’s military and uniformed personnel (MUP) in the long run by reforming the pension system now.

Economic managers of the Marcos administration continued with its dialogue with MUP services.

The consultations, now on its 16th meeting, aim to discuss the MUP pension reform being pushed by the economic managers amid the need for a wider fiscal space moving forward.

This time around, non-commissioned officers of the Philippine National Police, Bureau of Fire Protection, Bureau of Jail Management and Penology, Philippine Coast Guard, Armed Forces of the Philippines, and the Bureau of Corrections were consulted.

Deputy treasurer Erwin Sta. Ana said the MUP pension reform, which is a priority measure of the Marcos administration, is an investment on peace and security.

During the consultation, MUPs raised questions on the government’s ability to pay for their pensions.

Sta. Ana said there is an urgent need to adopt an improved pension system in order to avoid future complications.

“There is no fiscal crisis now, but in the long run, we have data that the government cannot sustain [the pension fund],” Sta. Ana added.

The current MUP pension system is non-contributory and, as such, retirement pensions and benefits are fully funded by the government through annual appropriations.

“The government will make sure that it is ready to pay pension liabilities. That is why we have to reform it now,” he said.

It is estimated that the reform of the MUP pension could free up more than P200 billion in next year’s appropriations that could be allocated for other programs in the social sector.

This year, the Pension and Gratuity Fund (PGF) has an allocation of P272.94 billion, almost 50 percent higher than the 2022 level of P183.94 billion.

The annual fund is meant to pay off pension and retirement gratuity and terminal leave benefits, including separation benefits and incentives.

Given that the MUP pension system reform has yet to become a law, it remains included in the record P5.768 trillion 2024 National Expenditure Program.