Malacañang’s announcement of a 15% base pay increase for military and uniformed personnel (MUP) over three years came with a price tag that wasn’t explained during the policy rollout. So we took a look strictly at the numbers and imagined its implications.
At present, the MUP pension system is a whopping ₱17.9 trillion. This is nearly half of our gross domestic product. It is unfunded, meaning it’s not in the budget. Thus, we will have to draw it from other funded items in the budget, possibly from infrastructure or even from the AFP modernization program. Every peso added to military base pay becomes a permanent pension liability. Translate that to the annual pension cost for MUP, which at ₱213 billion now exceeds the AFP’s operating budget of ₱204.4 billion. We are now spending more on retired soldiers than active ones.
And here’s the trap: MUP pensions are automatically indexed to active-duty salaries. The announced increases—5% in 2026, 4.75% in 2027, and 4.55% in 2028—are annual cost escalations. For example, when an officer’s salary rises by ₱10,000, the government’s pension obligations increase by that amount for potentially 30 years. Multiply this across 174,500 current pensioners, and we have a fiscal time bomb that can explode at any time.
Based on our AI-assisted calculation, military pension costs will reach ₱1 trillion annually by 2035. That’s equivalent to the entire education budget. The average MUP pension of ₱40,000 monthly is already 8.8 times higher than SSS pensions. Lucky for MUP personnel because they contribute zero. Unfair for private sector workers and other government employees who fund their own retirement through mandatory contributions.
We agree, our soldiers deserve competitive compensation. But automatic pension indexation without contributions creates impossible mathematics. It is a rapid march to a fiscal collapse with overarching negative implications on the economy, not to mention our defense capability.
