By Ruth Abbey Gita-Carlos | Philippine News Agency
The government is continuing its review of proposed reforms to the Modified Uniform Pension (MUP) program amid growing concerns over fiscal sustainability, the Department of Budget and Management (DBM) said Wednesday.
Acting DBM Sec. Rolando Toledo said a technical working group, created under Executive Order 187 issued in December 2025, has been tasked to study pension requirements and assess the impact of pension indexation, which automatically adjusts retirees’ benefits in line with salary increases of active personnel.
Speaking to Palace reporters, Toledo said any reform under consideration would be carefully evaluated to ensure the long-term sustainability of the pension system while balancing fiscal constraints.
“As of now, they are still conducting a study as far as the reforms in terms of the pension [are concerned],” Toledo said.
He noted that funds have already been allocated to meet current pension obligations, including recent increases.
“Sa ngayon, sasabihin ko lang na mayroon po tayong nakalaan na pondo para doon sa kanilang mga pension requirements, around P6.2 billion ang requirements po para doon sa increase in pension,” he said.
AFP Deputy Chief of Staff Lt. Gen. Rommel Roldan assured current pensioners and personnel nearing retirement that any proposed reforms would not affect them, stressing that changes would apply only to new entrants.
The government’s review follows recommendations made in 2023 by former Finance Secretary Benjamin Diokno to amend the MUP law, warning that failure to reform the system could lead to a steady “bloating” of pension requirements over time.
Toledo acknowledged that under the current indexation mechanism, pension benefits automatically rise as the base pay of active uniformed personnel increases.
While this ensures retirees’ benefits keep pace with salary adjustments, he said the system could place significant strain on government finances if left unchecked.
“There will come a time that those pension requirements, of course, tataas and tataas at hindi na magiging sustainable, but that is why there is a continuing study as far as the pension requirements of the MUP are concerned,” Toledo said.
“Talagang malaki ang fiscal implication niya, and as mentioned, talagang, there will come a time, sabi nga nila, there was a study that I saw, that there will come a time na even mas mataas pa iyong magiging pension requirements from the base pay,” he added.
Toledo said the TWG is analyzing actuarial data, historical trends, and projected costs to determine the most viable reform options.
Roldan said the military supports the ongoing review and recognizes the need to balance the welfare of uniformed personnel with responsible fiscal management.
