Louise Maureen Simeon – The Philippine Star | July 18, 2023 | 12:00am
MANILA, Philippines — The government’s economic team is targeting to come up with a consensus bill for the military and uniformed personnel (MUP) pension system reform next month following the conclusion of dialogues with troops and cops.
On the sidelines of the British Chamber of Commerce of the Philippines forum, Finance Undersecretary and spokesperson Maria Luwalhati Dorotan-Tiuseco said the economic team has completed over 20 roadshows with MUP.
The consultations were done to discuss the MUP pension reform being pushed amid the need for a wider fiscal space moving forward.
The Department of Finance is now awaiting the updated actuarial study being conducted by the Government Service Insurance System (GSIS).
“We promised our MUP that whatever proposal we will present will be based on data and of course taking into consideration their suggestions during our dialogue,” Dorotan-Tiuseco told reporters.
Based on the existing GSIS actuarial study, the government must spend nearly P850 billion annually over the next 20 years to finance the current pension system.
It is also estimated that the level of total unfunded pension liabilities is at P9.6 trillion, which is nearly half of the country’s economy last year.
Dorotan-Tiuseco noted that the actuarial study will be finished in the coming weeks in time to meet the economic team’s target of presenting a consensus bill to lawmakers by August.
“Once the study is done, the economic team will sit down to draft the proposal and present it to the technical working group (TWG) where there could still be some negotiations,” Dorotan-Tiuseco said.
“We will then finalize the consensus bill, present it to the President and then to lawmakers,” she said.
Dorotan-Tiuseco is hopeful that all the agenda for August will be completed following the dialogues with MUP.
“We are very optimistic that we will have a consensus bill because the MUP has been very gracious in engaging in dialogues with us,” Dorotan-Tiuseco said.
“The issues were clarified especially where the economic team is coming from and we also saw what’s the most important for our MUP,” she said.
The current MUP pension system is non-contributory and, as such, retirement pensions and benefits are fully funded by the government through annual appropriations.
It is estimated that the reform of the MUP pension could free up more than P200 billion in next year’s appropriations that could be allocated for other programs in the social sector.
Overall, Dorotan-Tiuseco said the reception from the MUP is “much better” now compared to when the proposal was first announced in March.
“I think because we listened to their issues and then we thresh out. Whenever they have suggestions, we run the numbers and check if we can [adjust],” Dorotan-Tiuseco said.
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