27 JANUARY 2018 |SATURDAY|10:00 AM





speech solaire 27Jan2018

To the Philippine Military Academy Alumni Association Board of Directors, headed by Major General Melchor P. Rosales (AFP) (Ret), Chairman and CEO of PMAAAI; Lieutenant General Jaime S. Delos Santos (AFP) (Ret), Vice Chairman; Police Director Leo Angelo D. Leuterio (PNP), President and COO;


Secretary Delfin N. Lorenzana, Department of National Defense (DND); PNP Chief Police Director General Ronald M. Dela Rosa; former Senator, General Rodolfo G. Biazon;


Secretary Roy A. Cimatu, Department of Environment and Natural Resources (DENR); Ambassador Eduardo Wynfred E. Kapunan, Jr.; (former) Ambassador Jose DR. Burgos;


General Thawip P. Netniyom, Secretary General, National Security Council of the Royal Thai Government;


General Rey Leonardo B. Guerrero, Chief of Staff, AFP; Lieutenant General Rolando Joselito D. Bautista, Commanding General of the Philippine Army; Lieutenant General Galileo Gerard R. Kintanar, Commanding General of the Philippine Air Force;


Rear Admiral Elson E. Hermogino, Commandant, Philippine Coast Guard;


Rear Admiral Robert E. Empedrad, Flag Officer in Command, Philippine Navy;


The surviving spouse of Valor Awardee, Cavalier Rommel B. Sandoval (+), Mrs. Maria Ana Rosario Sandoval;


All the esteemed members - the Cavaliers - of the Philippine Military Academy Alumni Association, guests, ladies and gentlemen: a pleasant morning to all of you. Thank you for having me today. I am honored to be part of this prestigious gathering.


You all know how much this administration respects our soldiers, the police force, and all our uniformed personnel; and how it values your contribution in the building and protection of our nation. You have seen first-hand how the President, from the beginning of his campaign up to the present, he and this administration has worked tirelessly, looking for ways to strengthen our security and improve the lives of our uniformed men and women along with their families. And as this administration’s Budget Secretary, I can assure you that my Department, the Department of Budget and Management, fully supports the President’s vision of a modern, better equipped, better trained, and properly compensated military and police force.


Today, I am privileged to give you, on this important occasion, a brief discussion about the Congress Joint Resolution which increases the Base Pay of our military and uniformed personnel in active service. I will also give some updates on the pension system of our retirees, as requested by the Alumni Association. Afterwards, I will answer certain pressing queries of the Alumni Association.



As you all know, President Duterte signed on the first day of the year the Congress Joint Resolution which doubles the base pay of MUP in entry ranks, and gives significant increase for those in the high ranks, effective since January 1, 2018. This was the President’s promise during the campaign and he started the new year with fulfilling this promise. So, congratulations to all of you, especially the Privates, Police Officer 1, and those in equivalent ranks.


[Presentation of Table on Modified Base Pay Schedule beginning January 1, 2018]


Now, I would like to direct your attention to this table which presents the Modified Base Pay Schedule for 2018 as stipulated in the Congress Joint Resolution.


As you may see, a Private, Fire Officer I, Jail Officer I, Police Officer I, Apprentice Seaman, and Seaman Third Class will enjoy a 100% increase, resulting to a monthly base pay of P29,668.


Of course, those in the higher ranks will also enjoy an increase. In general, the pay adjustment results to a 59% average increase for all our military and uniformed personnel ranks.


The pay adjustment will not be finished this year, in fact, there will be another round of base pay increase to be implemented starting January 2019.


[Presentation of Table on Modified Base Pay Schedule beginningJanuary 1, 2019]


In the table presented, you may see that there will be an increase in the base pay of MUP ranks starting from First Chief Master Sergeant in the AFP, Senior Fire Officer IV, Senior Jail Officer IV, Senior Police Officer IV, and First Master Chief Petty Officer in the PCG and NAMRIA.


Thus by 2019, the average increase will be 72.18% for all ranks.


As for the Hazard Pay of all military and uniformed personnel, the fixed amount is now at P540.00 per month.


Let me point out also that the Joint Resolution repeals the provisions of Executive Order No. 201, s. 2016, on the grant of Provisional Allowance and Officers’ Allowance. As you know, these were previously given as an interim measure.


[Presentation of Table on Monthly and Annual Compensation for FY 2018.]


        I would like to show here as well the breakdown of FY 2018 monthly and annual compensation of select ranks to highlight the pay adjustments, as well as give you an idea of what you can look forward to this year and next year.


        In the table presented, you may see that a Private of the Department of National Defense and a Police Officer I of the Philippine National Police, as mentioned earlier, will receive a Monthly Base Pay of P29,668, or P356,016 annually.


        In addition, they will receive a Personnel Economic Relief Allowance (PERA) of P2,000 every month, which totals to P24,000 annually; a Mid-Year Bonus which is equivalent to one month pay; a Year-End Bonus, also equivalent to one month pay, along with a Cash Gift of P5,000; a Productivity Enhancement Incentive (PEI) of P5,000; a Subsistence Allowance of P4,500 per month, or P54,000 per year; a P2,400-Clothing Allowance and P360-Laundry Allowance annually; Quarters, which amounts to P4,800 per year; and a Hazard Pay of P6,480 per year.


        The total monthly compensation, therefore, of the Private and the Police Officer I is P43,116, or P517,392 annually. This may increase with additional incentives such as the Performance-Based Bonus (PBB) of P7,417 per year; Combat Duty Pay up to P3,000 per month, or P36,000 per year; and Combat Incentive Pay, also up to P3,000 per month, or P36,000 per year.


With these incentives, the qualified Private, Police Officer I, and those in equivalent ranks may receive as much as P49,734 monthly, or P596,809 annually.


        You may also see in the tables the breakdown of FY 2018 monthly and annual compensation of a Master Sergeant (DND) and a Senior Police Officer I (PNP), Colonel (DND) and Senior Superintendent (PNP), General (DND) and Director General (PNP).


        A Master Sergeant (DND) and Senior Police Officer I (PNP) will receive this year from a monthly compensation of P62,952, or P755,423 annually, up to as much as P69,859 monthly, or P838,308 annually, with the Performance-Based Bonus, Combat Duty Pay, and Combat Incentive Pay.


Next, a Colonel (DND) and Senior Superintendent (PNP), will receive P123,601 monthly, or P1,483,200 annually, without the Performance-Based Bonus, Combat Duty Pay, and Combat Incentive Pay. With said additional incentives, a Colonel or a Senior Superintendent will receive P131,414 monthly, or P1,576,961 annually.


Lastly, a General (DND) and Director General will receive from P211,541 monthly, or P2,538,480 annually; and with the Performance-Based Bonus, Combat Duty Pay, and Combat Incentive Pay, he or she will receive up to as much as P220,353 monthly, or P2,644,230 annually.


[Presentation of Table on Monthly and Annual Compensation for FY 2019.]


Next year, 2019, in the second round of base pay increase, you can again expect a raise in your compensation, as I said earlier, specially for those in ranks beginning with First Chief Master Sergeant in the AFP, Senior Fire Officer IV, Senior Jail Officer IV, Senior Police Officer IV, and First Master Chief Petty Officer in the PCG and NAMRIA, up to General and Director General.


In 2019, therefore, a Colonel (DND) and Senior Superintendent (PNP) will receive a monthly compensation of P160,006, or P1,920,060 annually; while a General (DND) and a Director General (PNP) will receive P259,276 monthly, or P3,111,300 annually.


Again, the compensation may increase with the addition of Performance-Based Bonus, Combat Duty Pay, and Combat Incentive Pay.


(You may see the total monthly and annual compensation which includes these added incentives on the table at the right part of the slides.)


These significant increases in your compensation reflects how much this administration values your critical role in securing the safety of the Filipino people, and maintaining the peace and order in our country. It also reflects the government’s sincere effort to reward and encourage professionalism and dedication among you.


Now, I know that many of you, especially the retired officers, would like to be updated on the status of the Proposed Pension System. Let me give you a briefer on the latest developments with regard to this matter.



In the previous administration, a Technical Working Group (TWG) for the Uniformed Personnel Pension Reform (or Proposed Unified Pension Reform Bill) was formed. This TWG, composed of members from Department of Budget and Management (DBM), Department of Finance (DOF), Department of the Interior and Local Government (DILG), Department of National Defense (DND), and Government Service Insurance System (GSIS), proposed a Unified Pension Reform Bill that involved the rationalization of the pension system of existing personnel as well as new entrants of the military and uniformed services.


Now, under the Duterte administration, we are continuing the work on this issue. In the new Technical Working Group’s most recent meeting held last Tuesday, January 23, the GSIS representative presented the initial results of the actuarial study based on the submitted 2016 data from the AFP and PNP. Once the results have been officially transmitted to the BTr, scenario building will begin and the final figures will be presented to the Office of the President in support of the drafting of the Pension Reform Bill.


The ballooning pension of the MUP is not an insignificant problem; on the contrary, it is a huge one. Yet, previous administrations have chosen to ignore it. It is what I call “the elephant in the room.” For the last 20 years, previous administrations simply pretended as if this monumental problem did not exist.


But it does exist. Here are the facts:


One, last year (2017), we spent P74 billion for military pension; yet those in active service were not contributing to any form of pension system.


Two, this year (2018), we have allocated P76 billion for military pension; again, without contribution from those in active service.


Three, in 2019, the total military pension with indexation will be P124.8 billion.


And four, this year, because we suspended the indexation, we owe you P38.4 billion, so that the total allocation for military pension for 2019 is P124.8 billion plus P38.4 billion, or a total of P163.2 billion.


        In the absence of a real military pension system, this state of affairs is not sustainable.


       To give you some order of magnitude, the total expected revenues from Package IA of the Tax Reform Program is approximately P90 billion.


In closing, let me emphasize that it is the goal of this administration to properly reward our uniformed men and women, and care for our retirees, who lay down their lives on the line to secure peace and order in our country.


It is our goal to craft a new Military Pension System that is not only fair to our retirees, but also sustainable and permanent. Permanent, in the sense that the administrations who will come after us will not face the problems we are facing right now. And, I’m sure, without the permanent solution that we will be proposing this year, the threat to our fiscal stability would be even bigger.


This fiscal risk would be so unmanageable that it might undo what the Duterte administration has carefully done. We have established a credible plan that will make us an upper middle income country by the end of the President’s term.


We are in a nice place right now. Let’s keep it that way. Let us all work together to ensure a brighter future for our children and our children’s children.


Thank you. Mabuhay kayong lahat!


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