NextGen Day

Finance Secretary Benjamin Diokno informed foreign investors on Thursday that the planned changes to the military and uniformed personnel (MUP) pension will increase the government’s fiscal flexibility.

Diokno stated that the military pension “is the elephant in the room” during the Philippine Economic Briefing held in Singapore, which was live-streamed through the Facebook pages of the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), National Economic and Development Authority (NEDA), and the Department of Budget and Management (DBM).

“Previous administrations are unwilling to discuss it. We are addressing it now, and we are almost certain of the answer. That will create a lot of financial room, he predicted.

The automatic indexation of pension to the salary of active personnel of single ranks will be eliminated; pensions will be granted once the MUP turns 57 years old rather than the current system where it is automatically granted once they reached 20 years of service and the active and new entrant will be required to pay the mandatory contribution to the Government Service Insurance.

Before this, Diokno stated that the total dividends to MUP are estimated to be over PHP213 billion for this year and are anticipated to surpass PHP1 trillion by 2035.

In addition to the MUP pension, Diokno said that reducing the size of the bureaucracy would increase available funds.

“Digitalisation goes hand in hand with that. Once more, that will create a lot of room on our financial side. We’re resolving the issues we can see, which is why I indicated that I sleep well at night,” he continued.

Arsenio Balisacan, the secretary of NEDA, stated that one of the reasons for encouraging the private sector to participate in the effort to upgrade the nation’s infrastructure is to ensure the government’s fiscal space improvement.

“There’s a lot of money there that’s supposed to be used for public infrastructure, but if (the) private sector can now implement this, then that limited resource could be used to support other priority areas, particularly in the social sector like social protection, health, education, and so on,” he said.

During the economic briefing, Balisacan persuaded the investors to invest in the 194 infrastructure flagship projects (IFPs), which are valued at approximately PHP9 trillion and include, among other things, water resources and physical and digital connectivity.

The Philippine government views the private sector as a crucial ally in advancing its socioeconomic goals. By utilizing the private sector’s financial strength, technological know-how, and management capabilities, we can improve public services, cut consumer costs, and improve the overall quality of life for all Filipinos, he continued. The private sector acts as the Philippines’ engine of growth and innovation.

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