Gov’t undertaking inventory of military, police assets to fund pensions

September 20, 2017

The Duterte administration is conducting an inventory of all assets of the military and police to fund their pensions, which continue to balloon, an official said on Wednesday.

In a breakfast forum, Budget Secretary Benjamin Diokno said the  government is determined to address the problem by passing a law and allowing the Government Service Insurance System to handle their benefits.

"We are actually making an inventory of all the assets of the military...we have to identify the assets that we can use to minimize the budgetary cost of that act of (former President Fidel) Ramos...he's responsible for that," he said.

The pensions for the retired members of the Armed Forces of the Philippines and the Philippine National Police have been increasing after a law was passed during the Ramos administration indexing the pensions to the base pay of those in active service.

The GSIS estimates it needs as much as P7 trillion in additional funding if it would take over the management of the uniformed personnel pension fund.

Diokno said the P7 trillion could even be an "understatement."

He said the Bureau of Treasury is conducting an actuarial, with P7 trillion as the working number.

"I call this (pension) the elephant in the room. Nobody would like to talk about it," Diokno said, noting that the Estrada, Arroyo and Aquino administrations did not do anything to address the problem.

But he said the Duterte government is committed to find a solution to the "monumental problem."

Diokno said they will file the bill before the end of the year.

He said the government is eyeing that new entrants in the military and the police would have a different pension scheme and this will be managed by the GSIS.

Under the present scheme, he noted the government is spending about P90 billion for the pensions of the retired military and police personnel. Celerina Monte/DMS