MANILA, Philippines — President Ferdinand “Bongbong” Marcos Jr. is still waiting for recommendations on the proposed reform of the military and uniformed personnel (MUP) pension system, Malacañang said Thursday, as the government’s review continues beyond the period originally set under an executive order.
Presidential Communications Undersecretary Claire Castro said an inter-agency technical working group tasked with reviewing the pension system has yet to complete its work and submit recommendations to the President.
The group was created under Executive Order No. 107, signed by Marcos in December 2025, and includes representatives from the Department of Budget and Management (DBM), Department of Finance (DOF), Bureau of the Treasury and Government Service Insurance System (GSIS). Its mandate is to study the existing MUP pension system and recommend measures aimed at making it more sustainable and equitable.
Castro said the government still needs to complete the review and obtain the necessary documents before recommendations can be finalized. She also acknowledged that the process has already gone beyond the 180-day period envisioned under EO 107.
For now, Castro said, Marcos has not taken a new position on the proposed MUP pension reform because no recommendation has yet been submitted to him.
Why the pension reform remains a major issue
The delay comes as the government faces growing pressure to address the long-term cost of the MUP pension system.
Unlike civilian government employees covered by GSIS and private-sector workers covered by SSS, active MUP personnel currently do not make mandatory pension contributions under the existing system. Their pensions are also automatically linked to the base pay of active personnel, meaning increases in active-duty salaries can translate into higher pension obligations for retirees.
The Bureau of the Treasury has identified the MUP pension system as a significant fiscal risk. In its fiscal risks assessment, the Treasury said the system could become increasingly difficult to sustain because pension obligations are funded through the national budget and are affected by automatic pension indexation and the absence of mandatory contributions from MUP personnel.
The Treasury has previously pointed to possible reforms including mandatory contributions for new entrants, changes to pension indexation and the exploration of more sustainable sources of funding.
Pay increases add pressure to the pension debate
The pension issue has become more urgent following the government’s decision to increase MUP compensation.
Under EO 107, MUP base pay adjustments are being implemented in three tranches beginning in 2026, followed by additional increases in 2027 and 2028. The order also provides for a higher subsistence allowance.
The Department of Budget and Management has estimated that the proposed 2027 budget would allocate ₱73.67 billion for the subsistence allowance of about 583,130 MUP personnel.
The Philippine Star recently reported that the government’s MUP pension bill is becoming an increasingly significant fiscal concern as active-duty pay rises and pension obligations increase alongside it. The report noted that the government is still conducting its comprehensive review.
Defense chief also pushes for reform
The issue has also drawn attention from Defense Secretary Gilbert Teodoro.
In a House budget hearing earlier this week, Teodoro called for reforms to the AFP pension system, arguing that veterans’ pensions should be separated from active-duty salaries so pension adjustments would not automatically require corresponding changes whenever active personnel receive pay increases.
He also cautioned against combining AFP retirees with all other uniformed personnel in a single reform framework without considering the AFP’s particular circumstances.
What happens next?
For now, there is no new MUP pension reform policy from President Marcos.
The next major step is for the inter-agency technical working group to complete its review and submit recommendations. Only after those recommendations reach the President can Malacañang take a clearer position on the direction of the proposed reform.
The debate is therefore far from over.
The government must balance two competing priorities: protecting the retirement benefits and welfare of military and uniformed personnel while preventing pension obligations from placing an increasingly heavy burden on future national budgets.
Until the technical working group’s recommendations reach Malacañang, however, the biggest question remains unanswered: What will the Marcos administration ultimately propose for the country’s MUP pension system?
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