Pension needs to guide strategy for disposals of military land
BUDGET Secretary Benjamin E. Diokno said Armed Forces pension reform will help determine the government’s strategy in disposing of military land, with some properties to be sold and others to be offered for lease or joint development.
“Some we can sell, some we can offer for long-term lease or joint venture. For example Andrew Tan can be the developer of a certain asset,” Mr. Diokno told reporters, referring to the head of Alliance Global Group, Inc.
He added that joint ventures or leases produce annual cash flows that can be used to bolster the pension fund of the Armed Forces of the Philippines.
The law provides that the sale of military assets should be set aside for armed forces modernization, but Mr. Diokno said some proceeds can help fund pension reform.
The government’s economic managers are currently drafting a bill that will put the Government Service Insurance System ( GSIS) in charge of military pensions. The change would also require contributions to the military pension fund, rather than funding from the Treasury.
Mr. Diokno said payments for military pensions account for P90 billion, or about two thirds of the Department of National Defense’s P134.29 billion budget this year.
If unaddressed, the budget for military pensions could double to P187.9 billion.
GSIS will need at least P7 trillion to fully acquire the military pension fund.
The proposal is expected to be submitted to the Congress before the end of the year.
Military pensions are pegged to salaries earned by their counterparts still in active service. —