THE Finance department said that it will tap land sales by the Bases Conversion and Development Authority (BCDA) to help fund military pensions.
Finance Secretary Carlos G. Dominguez III said that he has asked the BCDA to sell its military bases to aid in plugging the pension gap.
“We are working with BCDA… it was set up basically to help modernize the military so we are discussing with them what kind of assets they can assign to cover these liabilities,” Mr. Dominguez told reporters last week.
The government plans to transfer the pension scheme of uniformed and military personnel to the Government Service Insurance System (GSIS).
GSIS Chairman Francisco T. Duque III has said that the system will require a seed fund of up to P7 trillion for it to operate the new pension scheme.
Asked whether potential BCDA assets are enough to cover the funding requirement, Mr. Dominguez said: “We don’t know. We don’t know the figure yet, we don’t know what assets they have. But we are starting to talk to them already.”
“They own a lot of land, they own land in Fort Magsaysay, in Fort Bonifacio, so we’ll see what assets are there that can be utilized for this,” he added.
BCDA did not respond when sought for comment on the value of its land holdings.
Economic managers have been poised to propose the new pension scheme since taking office in June last year.
In the 2017 Development Budget Coordinating Committee fiscal risk report, they flagged the “ballooning uniformed personnel pension cost,” as it is non-contributory, meaning that the pensions for uniformed individuals are taken solely from the appropriated budget.
“In 2016, the pension budget amounts to P71 billion which is projected to more than double in eight years at P187.9 billion. In view of the foregoing, a reform must be effected for a more sustainable pension system,” the report read.
Pensions for retired military and uniformed personnel are currently pegged to the salary of counterparts in active service, meaning that benefits escalate in step with active-duty pay. — Elijah Joseph C. Tubayan