Palace hopes for solution to MUP fund sources

MANILA, Philippines — Malacañang hopes the funding sources for the proposed reforms in military and uniformed personnel (MUP)’s pension may be resolved “within the coming months.”

“The operationalization of this program will be posing difficulties regarding the source of funding, etc. because the amount that was discussed even during the past administration was so big,” Executive Secretary Lucas Bersamin told CNN Philippines.

Bersamin said Malacañang is leaving it up to Congress to decide on the details of the bill that will reform the pension system of MUPs.

At the Senate, Sen. Jinggoy Estrada said lawmakers have yet to find a win-win solution in reforming the pension scheme of MUPs.

“I am not rushing things because this is a sensitive issue. I want to have a resolution which will be fair to MUPs,” Estrada said at a press conference yesterday.

Estrada hinted that Albay Rep. Joey Salceda has come up with an agreeable proposal. He did not elaborate.

Senators have agreed to restructure the MUP pension system to prevent a fiscal collapse. The MUP pension payout this year is around P213 billion, projected to reach P1 trillion by 2035.

Economic managers have proposed MUPs in active service should contribute five percent of their monthly pay to their retirement fund for the first three years of a plan to reform their pension system.

New entrants to uniformed services will be contributing nine percent of their basic salary and longevity pay.

“It is no longer debatable that the MUP pension system should be changed,” said Senate Minority Leader Aquilino Pimentel III.

“The five percent contribution might be too high. Low-rank enlisted personnel earn P29,000 to P38,000. If you remove five percent that’s a big deal for them,” Estrada said.

Savings

Ako Bicol party-list Rep. Elizaldy Co said the lower chamber is looking into the government’s savings as a funding source for the pension of MUPs.

“Before the hearings for the 2024 national budget, we will look at where we can source funds for the pension of our soldiers, policemen and other uniformed personnel,” he said.

The government will need P3.6 trillion in the next 30 years to resolve the MUP pension fund’s issues due to “backlogs and the growing number of retirees every year,” according to Co.

Co said Speaker Martin Romualdez instructed him and other House leaders to ensure a resolution within the year.

“Speaker Martin’s position that this can be done in installments and not as a one-time expense is well-taken. We will not dilly-dally on this issue. We will find a solution this year,” he added.

Romualdez had directed members of the House appropriations committee to look for ways to raise P120 billion this year for the MUP pension fund.

Co said they are eyeing the Government Service Insurance System to manage the fund.

The Retirement Savings and Benefits System which had managed the MUP’s pension was shut down due to corruption.

President Marcos earlier pushed for “self-regenerating” pension plans for the Armed Forces and Philippine National Police to avoid the fund’s depletion.

The House of Representatives is expected to start deliberations on the proposed 2024 budget in September or before Congress goes on recess in October. – Cecille Suerte Felipe, Sheila Crisostomo