Military pension system, external defense among Teodoro’s priorities

Newly appointed Defense Secretary Gilberto Teodoro Jr. revealed on Wednesday, June 7, his priorities for the defense sector shortly after he was accorded arrival honors at the Department of National Defense main building in Camp Aguinaldo, Quezon City, where he met outgoing DND officerin-charge Carlito Galvez Jr. In an interview with reporters, Teodoro said President Marcos’ marching order to him was to find a sustainable pension scheme for the military and uniformed personnel (MUP).

“The first marching order of the President to me is to work with our legislative partners and the Armed Forces of the Philippines to continue the work of Secretary Galvez and [Department of Finance] Secretary [Benjamin] Diokno to find a sustainable MUP scheme,” Teodoro said.

The finance department is eyeing to

reform the current MUP pension system, which Diokno described as “fiscally unsustainable.”

The current pension system is fully funded by the government which means it is appropriated annually in the budget, but there is no contribution from the retirees. Among the reforms being considered in the new system is the requirement for a mandatory contribution among active personnel and new entrants, similar to Government Service Insurance System (GSIS) pensioners, to make it self-sustaining. However, Galvez previously stated that the DND would anticipate the retirement of around 70 to 80 percent of enlisted personnel if this is implemented. Teodoro said he would consult all stakeholders in the

DND to come up with the most appropriate solution.

“Balance is really important in terms of sustainability, it’s a question of resource and fiscal management and finding innovative ways of financing the much needed and unavoidable expenses, of building a credible deterrent force,” he noted. “One of the jobs of the secretary of Defense is to attend to the welfare of our veterans and our retirees, and our current plantilla whether in the armed forces, the non-uniformed personnel and our employees, [and] to balance all those requirements and to make hard choices as to what goes where and how much,” he continued.

“I think it's altruism, if it’s participatory then naturally the fund becomes more sustainable. But that being said, there is no finalized agreement yet as far as I know,” he added.

WPS, modernization, DND budget

Teodoro also said the DND will continue the gains of his predecessors in protecting the country’s territory, especially in the West Philippine Sea (WPS).

Teodoro, who is the first DND chief with a civilian background since 2016, admitted he would have to consult with his counterparts in the national security cluster to better implement the policies of the department.

“The first thing that I would do in the first few weeks is to listen and to learn,” Teodoro said. “I can’t come in here with preconceived notions of what to do because national security is at stake.” “I’m here to listen and to learn, and then consult with the national security cluster, and then we shall evolve security policies,” he added. However, the defense chief said he will take into account Marcos’ orders to him: first is to ensure that national defense shall transition without sacrificing the gains in internal security to external defense; and second is to tell the world that “our territory is our territory.”

To do this, he said the AFP’S modernization program should continue as planned, which is now on the third horizon. Under the current phase, the military is aiming to acquire more sophisticated assets such as missile systems and multi-role fighters among others to defend the country from external forces.

Further, Teodoro will also ask Congress to allocate a separate budget for the DND’S capital outlay.

“We cannot continue to have a Department of National Defense without a capital outlay for our own department. We need to build up the capabilities of this department as part of the national defense family, and I would like to state that is one of my goals, to build up the capabilities of the national defense proper,” he said. “Nakita niyo ang aming opisina napakaliit, iilan lang ang empleyado dito kwatro syentos lang. Ang mina-manage natin na stakeholders dito ay aabot na ng milyon. Papaano ang manager to client ratio? Masyadong malaki (Look at our office, it's too small and we only have a few employees. We are managing millions of stakeholders. How is the manager to client ratio? It's too big).”

He said that by having a separate budget for their capital outlay, the DND will be able to develop the expertise of its own employees in program management, analytics, predictions, contracting, and international relations which will build up their career track.