August 14th, 2023
House Ways and Means Chair 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 Military and Uniformed Personnel (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.
“We need to resolve the MUP pension system’s fiscal defects so that we can move forward with devoting more of the national budget to credibly defending the country’s territory,” Salceda said.
“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.”
“Win-win solution” to be discussed
Salceda says that the House leadership, which met representatives of the economic managers on August 2, 2023, is keen on discussing the “win-win solution” that was agreed to during the meeting.
“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, indexation stays, meaning pensioners will also get an assured increase in pensions for ten years. We will only limit indexation to 50% of the salary increase, but again, 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.”
“Definitely we will create a MUP Trust Fund to augment pension funding needs. Military assets not in use will be infused into the Fund. We will just work out the policies and administrative details. 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.”
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 we have real geopolitical risks to address. Although our 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% this year compared to the 2023 budget, adding that he fully supports “this timely investment in national security.”
Salceda also says that he is “pleased that the air force and the navy received hefty budget increases this year.”
“You need a credible navy and airforce to defense 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,” Salceda said.