Press Release
September 30, 2019

Drilon cites huge impact of pension on national budget
Drilon to Lorenzana: Solve the pension mess before it worsens

With the ballooning cost of military pension, will it be a matter of time before the Department of National Defense becomes a full-fledged Department of Pensioners?

Senate Minority Leader Franklin 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 the next year's appropriation, the pension requirement of military and veteran will reach P69.7 billion which represents 60.57% of the P115.077 billion total budget for active military personnel.

On the average, Lorenzana said the pension budget grows by P1 billion yearly.

The senator urged Lorenzana to come up with a solution on the growing problems in the military pension system, citing its serious implications on the national budget.

"It is time that we come up with a definite plan to solve it because if we don't, we would become a department of pensioners," he said.

Sen. Panfilo 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, that funds the pension requirement of uniformed personnel belonging to the Armed Forces of the Philippines and the Philippine National Police.

The uniformed personnel also has an early retirement program at 56 years old. The maximum retirement age for civilian personnel is at 65 years old.

In some years' time, Drilon believed the pension requirement will 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 may need legislation, particularly with regard to the possible amendment to the compulsory retirement age of AFP and PNP.

Drilon 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.

News Latest News Feed