A TOP legislator in the House of Representatives said the fiscal defects in the country’s Military and Uniformed Personnel (MUP) pension system should be resolved immediately so that the country can move forward with devoting more of the national budget to credibly defend the country’s territory.
The House Committee on Ways and Means Chairman Joey Sarte Salceda (Albay, 2nd district) says that the House is committed to approving its version of what it calls a “win-win solution” to the MUP pension system’s fiscal issues “so that we can move forward with financing a credible defense posture especially in the West Philippine Sea.”
The Ad Hoc Committee on the MUP Pension System meets tomorrow to discuss bills on the pension system.
“Our expenditures are growing for defense, even as our MUP pension liabilities also grow. That is untenable. We have a solution that inflicts the least pain possible on all stakeholders,” he said.
“Win-win solution” to be discussed
Salceda says that the House leadership, which met representatives of the economic managers early this month, is keen on discussing the “win-win solution” that was agreed to during the meeting.
He said the pension structure will be retained in full – pensionable age, retirement at one rank higher, years before optional retirement, the benefits structure, everything stays.
“We will also assure a 3-percent 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. No shocks to our fiscal system.”
On top of that, he said indexation stays, which means pensioners will also get an assured increase in pensions for ten years. Indexation will be limited to only 50 percent of the salary increase. But again, he said that is better the usual case, where there is no guarantee of pension hikes.
“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 pointed out.
He said that a MUP Trust Fund will be created to augment pension funding needs, and military assets not in use will be infused into said fund. He explained that they will just work out the policies and administrative details but at least, there will be some sure source of funding for the pension system.
“To reiterate, it’s our ‘Three Guarantees’ version. Guaranteed pension hike. Guaranteed salary hike. Guaranteed funding source,” Salceda emphasized.
Solving MUP pension issues will help PH “move forward” with defense spending
Salceda highlighted that the urgency of solving the MUP pension system issues is that there are real geopolitical risks to address. He said that although their attitude is to solve these risks diplomatically, diplomacy is hollow without credible defense capabilities.
Salceda notes that the AFP Modernization Program increased by 81.8 percent this year compared to the 2023 budget, adding that he fully supports this timely investment in national security, and expressed pleasure that the air force and the navy received hefty budget increases this year.
“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. The President’s budget gets its defense priorities right,” Salceda added.
“So, we need to solve the MUP pension system issues so we can keep investing in a formidable national defense,” he reiterated.