By Mario Casayuran
Senate Minority Leader Franklin M. Drilon asked on Monday the Department of National Defense (DND) and Department of Finance (DOF) to submit a roadmap on how to solve a problem in the future when the annual budget for pensioners could become more than that allocated for the country’s standing army and other uniformed services.
Drilon said he wanted this problem resolved before the June 2022 end of the 18th Congress to avoid a scenario in the coming years where the DND becomes a full-pledged Department of Pensioners.
This problem has a huge impact on the national budget, according to Drilon, a former Senate President and Justice Secretary.
Drilon expressed this sentiment in Monday’s public hearing by the Senate finance sub-committee chaired by Senator Panfilo M. Lacson that scrutinized the proposed 2020 budget of the DND and the Armed Forces of the Philippines (AFP).
The help of the DOF was sought because Drilon strongly suggested that the current retirement age of the rank and file of the uniformed services should be increased.
The current retirement age of the uniformed services is 56 years old versus that of 65 in the government civilian population.
The standard retirement of 65 years for policemen, soldiers and for other members of the uniformed services was reduced to 56 in 1990.
Former Senator Antonio F. Trillanes IV had filed a bill reinstating the retirement age for policemen and soldiers from 56 to 65.
Drilon asked this as he raised concerns that a large chunk of the department’s budget is used to pay for pension than to beef up its active military personnel.
“This has been a problem ever since and we keep sweeping it under the rug,” Drilon told Defense Secretary Delfin Lorenzana at the hearing on the proposed P188.6 billion budget of his department for 2020.
In next year’s appropriation, the pension requirement of military and veteran will reach P69.7 billion, which represents 60.57 percent of the P115.077 billion total budget for active military personnel.
On the average, Lorenzana said the pension budget grows by P1 billion year.
Lacson raised similar concerns and joined Drilon’s calls for a sustainable pension plan.
“This concerns all of us, because if you cannot solve this you have a lot of programs whose funds could be sacrificed in order to fund the retirement of uniformed personnel,” he said.
Drilon observed that there is no serious effort that has been put in place in the past years, which made the problem worse.
“It has been talked year in and year out and yet, we have not seen a definite solution. We want to see down the road that there is a solution. We need somebody who has the political will to address the issue,” he stressed.
The pension requirement of military personnel has ballooned over the years due to automatic indexation where pension entitlement is automatically adjusted based on prevailing scale of base pay of similarly ranked active personnel.
Also, unlike in the case of civilian personnel, it is the government, through the General Appropriations Act (GAA or national budget) that funds the pension requirement of uniformed personnel belonging to the AFP and PNP.
In some years’ time, Drilon believed the pension requirement would be more than the funding requirement for active uniformed personnel.
Lorenzana confirmed they are currently studying a pension plan and vowed to submit it immediately.
Drilon said the plan might need legislation, particularly with regard to the possible amendment to the compulsory retirement age of AFP and PNP.
He also said the budget requirement to address the pension could reach up to trillions of pesos, stressing that the DND should be more open to every possible source of funds to provide a stable pension system.
He cited the use of military assets in order to raise funds for the pension plan that DND is tasked to formulate.