Defense Secretary Gilberto “Gibo” Teodoro Jr. clarified that under half of the proposed ₱142.95-billion Military and Uniformed Personnel (MUP) pension allocation for next year is destined for retired members of the Armed Forces of the Philippines (AFP).
He dismissed direct comparisons linking the total MUP pension allocation to the AFP modernization budget as inaccurate.
The defense chief issued the statement following reports contrasting the Marcos administration’s proposed ₱142.95-billion MUP pension fund for 2027—a 6.8 percent rise from this year’s ₱133.91 billion—with the ₱50-billion allocation proposed for AFP modernization.
“Only 49.6 percent of the total MUP pension budget is earmarked for AFP retirees. The rest go to other security services. Therefore, to equate the total MUP pension to the AFP modernization is not accurate as a comparison indicator,” Teodoro stated.
Based on that breakdown, approximately ₱70.88 billion of the MUP fund will cover military retirees, with the remainder distributed among other uniformed agencies.
Teodoro argued that public discussion should focus instead on broader funding challenges facing national defense and its modernization initiatives.
“The MUP debate, when framing the debate with respect to modernization, evades the key question of total resources devoted to the AFP and to the defense space. As of this time, with worldwide vulnerabilities, almost all countries have made the conscious decision to increase defense spending in large adjustments – we cannot be immune to this,” he emphasized.
Teodoro urged a complete reassessment of how defense modernization is funded and called for scrapping the current 15-year framework, pointing out that expected revenue sources failed to materialise.
“The AFP modernization budget was supposed to be sourced from BCDA remittances, which as we all know, have been marginal and need to be subsidized by the National Government. Worse, defense-optimized national real estate assets were lost. This must be halted and the corporate structure of BCDA be abolished,” he argued.
“Which entity works on 15-year horizons this day and age?” Teodoro added, questioning the practicality of long-term planning models amid current security demands.
Defending the state-funded pension structure, he noted the expansive operational mandate carried out by a lean military force.
“Our force structure is extremely lean and, given the fact that they must keep watch over 7,600 plus islands and 2.4 million square kilometers of maritime area, their pensions should be National Government derived,” he noted.
“I am not opposing reforming pension systems, but it must be done under the spirit laid down by this clarification,” Teodoro added.
The MUP pension system remains under comprehensive review by an inter-agency technical working group created under Executive Order 107—comprising the Department of Budget and Management, Department of Finance, Bureau of the Treasury, and GSIS.
Unlike civilian employees under SSS or GSIS, military and uniformed personnel currently make no mandatory contributions toward their retirement funds, prompting calls from lawmakers to establish long-term financial sustainability while safeguarding benefits.