SENATE President Juan Miguel Zubiri predicts the measure reforming the pension system for the military and uniformed personnel (MUP) will likely be the “bloodiest” that lawmakers will tackle in the second regular session of the 19th Congress.
This is why, he said, several agencies are holding dialogues with both military and police personnel while Congress keeps refining the controversial bill, which is meant to forestall a “fiscal nightmare” of government funds being drained just to pay MUP pensions entirely from the budget, because cops and soldiers have never been asked to contribute to their pension fund, unlike members of the Social Security System (SSS) and the Government Service Insurance System (GSIS).
Zubiri said in a weekend interview with DWIZ’s Cely Ortega Bueno that Defense Secretary Gilbert Teodoro Jr., “is doing his best” holding dialogues with military men to explain the situation and the inevitability of exacting even modest contributions from future pensioners.
Interior Secretary Benhur Abalos, on the other hand, is also holding dialogues with members of the Philippine National Police (PNP).
The chairman of the Senate defense committee, Sen. Jinggoy Estrada, is also holding nonstop consultations with stakeholders in order to come up with the best possible version of such a controversial, “but necessary” measure, according to Zubiri.
“I think this will be the bloodiest [measure to tackle]…. We don’t want the military and police to resent having deductions” to contribute to their pension fund, Zubiri said, partly in Filipino.
And yet, Zubiri explained, “if we don’t do this, all government funds
will be lost to paying MUP pensions because there’s no personal contribution.”
The Department of Finance and Department of Budget and Management have estimated that in five years or so, the government could be paying, entirely from budget, for pensions of MUPs in a sum exceeding the budgets for operating the AFP and PNP.
“Everything will go to pensions,” Zubiri warned, adding, “this is not sustainable,” echoing earlier warnings by Finance Secretary Benjamin Diokno.
In a separate interview, Zubiri said, partly in Filipino, that the dire projections need to be heeded because “with a P6-trillion budget, for instance, P1 trillion could be used just for pensions alone.” Much of that one-sixth budget expense could go to fund health, education and other vital human services, he added.
Zubiri said Teodoro has assured the military that the most just and fair arrangement will be crafted, and, Zubiri said, there will probably be “just small deductions” from the salaries of the current crop of uniformed personnel.
Deductions, liquify assets
There are “many proposals on the table, but we’re saying to make it as painless as possible,” the Senate chief added.
“Right now, the magic number is 5 percent [deductions from MUP pay]” to go to their pension fund. So far, he said, the military top brass he has talked to “are amenable to it.”
Besides imposing mandatory but modest pay deductions on MUPs for the first time, policy makers are also looking to tap idle assets in military reservations in order to create wealth to augment the seed resources for a sustainable pension fund, Zubiri revealed.
“Some people are asking, ‘why don’t you also use military reservations’ [to raise funds]?” The AFP, he said, “can use PPPs [private-public partnerships]” and resort to “joint development” with conglomerates so they can have another revenue stream for their pension seed fund.
While the MUP bills are projected to be “bloody,” Zubiri said the target for passage of the measure is “hopefully, before December, or at the very least, by first quarter of next year.”