Exclusive by Raïssa Robles
When I interviewed President Benigno Aquino III on April 16, 2015, one of the very first things he told me was that he intends to fix the pension system for the military and policemen. This includes passing an amended law and identifying ways to fund its seed capital, which is estimated to cost over P1.7 trillion.
According to news reports, as of the year 2000, unpaid pensions had reached a total of P18 billion. A Senate study, posted at the end of this piece, warns of a “looming pension crisis.”
I did not write about this for South China Morning Post since my main topic for the one-on-one interview with President Aquino was the South China Sea dispute.
So I asked my SCMP editor if I could write about this on my blog and he said yes.
I am not very familiar with the pension system for the uniformed services. So I’ve decided to simply post word-for-word what Aquino told me about it. Here it is below:
PRESIDENT AQUINO: Then, I’m tackling ‘yung pension system… Pension system for the uniformed services does not have a pension system per se. They are not members of GSIS (Government Service Insurance System), not the SSS (Social Security System). They used to have their own. In the AFP (Armed Forces of the Philippines), it was RSBS (Retirement Separation and Benefit System), and then mismanaged.
So, by next year, I think the figure they are demanding about that will come from the budget and no contributions from the members — about 80-plus billion. When you look at the budget… Can we just use last year’s budget of about two trillion? Iyong figure between 25 to 35 percent is the one that you can use. Everything else is parang override expenses, ‘yung personal service or MOOE (maintenance and other operating expenses). So assumed 25 percent, so 500 [billion] tapos 80 [billion] of the 500 [billion] is already earmarked for just paying the pensions and benefits.
Now, so there’s no system then it’s index to current salaries and wages. Every time you increase for the active, you increase, correspondingly, for the retired. The whole concept of pension system is, you have seed capital, you invest; by the time there are obligations, the interest, parang the growth of that fund based on the obligations…Iyong contrast to the pay as you go systems that we are…Now, we don’t have it.
So, we’re asking for amendments to the law. Number one, take away the indexing feature, then… In the sum kasi, for seed capital is from a low of about 1.7 trillion to 4.3 trillion and the national budget is 2.6 trillion. So how do we fund it? ‘Yung we will reclaim land, the coastline, et cetera, then sell this as one of the principal methods for funding their pension system.
Raissa Robles: For the military?
PRESIDENT AQUINO: Military, the police. Uniformed services kasama na BuCor (Bureau of Corrections), BJMP —
Raissa Robles: Just to clarify, sir. Are you saying that they have never been under GSIS?
PRESIDENT AQUINO: I don’t know if they have never been. Basta, by that time, it was my responsibility. ‘Yon nga may RSBS, and then to some, parang may mga savings and loan yata e.
Raissa Robles: AFPSLAI (Armed Forces and Police Savings & Loan Association, Inc.)?
PRESIDENT AQUINO: AFPSLAI is not, ano, is not actually part of the Armed Forces. I’m not even sure kung sa GOCC (government-owned and controlled corporation). Parang it’s their savings and loan association. They elect their members. So ‘yon ang problema. That was left to me; and it keeps on growing.
Raissa Robles: And so you’re trying to rectify that?
PRESIDENT AQUINO: Yeah. It is also a hindrance to increasing the number of our security sector. Iyong our security sector is exactly the same number it was in EDSA, where our population was half. So, ‘di ba, parang you’re asking the same number of people to do a lot more work.
Pakikuha pala kay Mar ‘yung latest sa crime statistics niya. Ipinakita niya sa akin noong isang ‘yung rundown niya. Really impressive. We don’t know about half to a third of the crime rate incidences and really… They have this… I forgot the catchy name for the project pero all of these most wanted. We’ve been catching a lot of them. I’m just getting this really most wanted brought a substantial decrease in the number of crime incidences.
Now, I am digressing. Any question you want? Sonny (Coloma) is so eager to answer all of them.
Aquino’s critics would probably say this is a political move on his part, to garner votes for his anointed in next year’s polls. Tell that to the Marines. And the cops who are about to retire and are worried about their pension.