Funds released for pension arrears for AFP, PNP retirees

By Elijah Joseph C. Tubayan, Reporter
THE Department of Budget and Management (DBM) in a statement Thursday, Aug. 9, said it has released the pension differential arrearages for retirees of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP).
DBM said it has released P532.54 million for 4,392 AFP retirees, covering the period July 2008 to February 2013.
The agency also released P267.82 million for 13,157 PNP retirees covering the period July to December 2009.
The releases are chargeable against the pension and gratuity fund of the 2018 budget.
“Notably, part of the computed pension differential claims refer to the 36-month lump sum provided to retirees once they retire at age 56, or completed at least 20 years of military service, covering the period 2008 to 2013,” the DBM said in its statement, adding:
“This is pursuant to Section 17 of Presidential Decree (PD) No. 1638 dated September 10, 1979, which states that at the option of the retiree, he shall be entitled in advance and in lump sum a retirement gratuity equivalent to the first three years and thereafter receive his monthly pension.”
The government is seeking to reform the pension of uniformed personnel and make them contributory, as the pension payouts are starting to take a toll on the country’s fiscal position.
The government has to pay P33 billion to AFP and PNP retirees by 2019. This is expected to double in eight years, as pensions are indexed to any increases in the salaries of those in active service.
President Rodrigo R. Duterte signed in January a resolution to increase, even double, the salaries of uniformed personnel.
Budget Secretary Benjamin E. Diokno has said the government is crafting a pension scheme and will submit a proposal to Congress before September.
This will involve the creation of a new separate pension fund to be managed by the Government Service Insurance System, where new recruits will start to contribute to the pension fund, while existing pensioners will continue to enjoy the current scheme.