Economic team meets with PHL Air Force on MUP pension reform

The economic team met with members of the Philippine Air Force (PAF) to discuss the proposed reforms to balance the creation of a fair military and uniformed personnel (MUP) pension system while preserving the country’s overall fiscal health during a dialogue held at the Colonel Jesus Villamor Air Base in Pasay City on May 26, 2023.

“As we continue to deliberate this proposal, our primary focus is the morale and welfare of our uniformed personnel, honoring their service and the valuable contributions they have rendered to our nation. At the same time, we must continue to give ample opportunities for our future generation of soldiers,” Colonel Sheillah Grace E. Vicente said in her remarks.

Several PAF members came forward to seek clarifications on the proposed reforms. Around 200 PAF members attended the event, while 600 participated virtually.

The economic team, led by Department of Finance (DOF) Undersecretary for Fiscal Policy and Monitoring Maria Cielo D. Magno, along with representatives from the Department of Budget and Management (DBM) and the office of Senator Jinggoy Estrada attended the dialogue.

“Our collective aim is to support the wellbeing of our military personnel while also considering the financial health of our nation. Your participation and input have brought us one step closer to achieving this goal,” Colonel Vicente said in appreciation for the dialogue.

During her presentation, Undersecretary Magno explained the rationale behind the proposals and stressed the importance of having vested rights for a secure and predictable pension system.

“Huwag po natin siyang isipin na as parang tax na kinuhanan na hindi na babalik sa atin. Ito po ay parang forced savings, kasi pera po natin ito na pinepwersa lang tayo na mag-save para…meron tayo mahuhugot kapagka nag-retire tayo,” she said, clarifying misconceptions about the fund.

Let us not think of this as tax that won’t be returned. This is like forced savings on our part so that we will have something ready upon retirement.

She also explained the danger behind the current pension system which solely relies on the national budget. An economic crisis, budget problems, and a ballooning deficit may affect the pension to be given to retirees if there are no vested rights assigned to the retirement fund.

“We support this move of the government to have a secure pension system that will protect us once we bow out of the service…I’m hoping––we are hoping that we will meet halfway for the betterment of our government and also for the betterment of the morale and welfare of our entire members of the Armed Forces of the Philippines,” Chief Sergeant Major John I. Roxas said.

An AFP-wide survey is also being conducted to help the economic team craft a balanced proposal.

The economic team is committed to engage in dialogue with affected MUP stakeholders to ensure that the policy directives of President Ferdinand R. Marcos, Jr. are built on consensus and participatory policymaking.

The team has scheduled a lineup of consultations with the Armed Forces of the Philippines (AFP)’s Presidential Security Group (PSG), Health Service Command, Philippine Navy (PN), Philippine Army (PA), Visayas Command, Eastern Mindanao Command, Western Mindanao Command, Western Command, Philippine Military Academy (PMA), Northern Luzon Command, and Southern Luzon Command.

Talks are also lined up with the Philippine National Police (PNP), Bureau of Fire Protection (BFP), Philippine Coast Guard (PCG), Bureau of Corrections (BuCor), Bureau of Jail Management and Penology (BJMP), and National Mapping and Resource Information Authority (NAMRIA).