A PLAN tackling how to address the ballooning problem of military pensions will be reported to the President by August, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III told reporters the initial presentation of a plan to address the problem was recently presented at the Bureau of the Treasury (BTr), with President Duterte and other government officials in attendance.
“The President asked us to move forward quickly, and we have to make another presentation to him on the progress by the end of August,” Dominguez said.
Among the agencies represented at the meeting were the Department of National Defense in charge of the Armed Forces of the Philippines, the Department of the Interior and Local Government for the Philippine National Police (PNP), the Department of Transportation for the Philippine Coast Guard and Department of Justice for the jails.
The Government Service Insurance System (GSIS) is being eyed to manage the military pension system.
In January this year, the Department of Budget and Management (DBM) reported that from P7 trillion to P9 trillion is seen as the cost of taking over the military pension system.
Should the GSIS take on the challenge of managing the pension system of the Armed Forces, the government would have to infuse funds to the agency to make the deal more attractive, Budget Secretary Benjamin E. Diokno said
In 2017 budget officials and the DOF began addressing the need for a sustainable retirement system for military personnel. One proposal was to incorporate such an entity with the GSIS and do away with subsidies from the government.
Diokno categorically said earlier that addressing the cost of military pension through the annual budget was not sustainable.
Without a self-sustaining military pension system, the cost of extending pension benefits to the uniformed services will have to be taken out of the annual budget of the military—a cost estimated at 50 percent to 60 percent of such budget. Extending a subsidy to the military is also very expensive for taxpayers, as the cost amounts to some P90 billion a year.