appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Sam Beltran

The Philippines’ push for military modernisation is being squeezed by a ballooning pension bill for its troops as fears mount over its ability to finance newer ships, aircraft and other defence assets.
The Department of National Defence has proposed spending 142.95 billion pesos (US$2.3 billion) on military and uniformed personnel (MUP) pensions in 2027, out of a total proposed defence budget of 324.6 billion pesos.
The planned pension budget is 7 per cent higher than the 133.91 billion pesos allocated in the 2026 General Appropriations Act amid increasing calls for Manila to review the pension system.
While civilian workers typically contribute a part of their salaries to state fund systems, military and uniformed personnel are not required to make pension contributions, which are drawn from the national budget.
Proposals to legislate reforms to the armed forces’ pension system have long languished in Congress, with lawmakers warning that it is unsustainable.
The debate comes as the Philippines faces growing pressure from the US to spend more on its military.
Funds for the military’s modernisation programme next year are set to rise by 10 billion pesos to 50 billion pesos from 2026, which the Department of Budget and Management said was part of efforts to “enhance the military’s capabilities to protect the country’s sovereignty and territorial integrity”.
But the proposed pensions were nearly triple the amount set aside for the military upgrade, former finance undersecretary Cielo Magno said in an interview with The Philippine Star on Monday.
While it was important to compensate the troops fairly, “we must also confront the trade-off: resources consumed by an ever-growing pension bill are resources we cannot use to modernise our armed forces, strengthen territorial defence and fund other essential public services”, Magno said.

Defence Secretary Gilberto Teodoro Jnr pushed back on the criticism, saying only 49.6 per cent of the total pension budget was earmarked for military retirees, while the rest would be for “other security services”.
“Therefore, to equate the total MUP pension to the AFP [military] modernisation is not accurate as a comparison indicator,” he said in a statement on Monday.
Teodoro also defended government-funded pensions for the country’s troops, saying they continued to contribute to national security efforts even in retirement. Soldiers on active duty should get their pensions funded by the national government because of their national security responsibilities, he added.
“Our soldiers address a variety of missions 365 days a year without any breaks. Our force structure is extremely lean,” Teodoro said.
“Given the fact that they must keep watch over 7,600-plus islands and 2.4 million sq km of maritime area on a purely national government basis and do services for other government entities including [local government units] … their pensions should be national-government derived.”
Teodoro said discussions over budget allocations should take into account the total resources devoted to defence, adding that with “worldwide vulnerabilities”, nearly all countries “have made the conscious decision to increase defence spending in large adjustments”.
“We cannot be immune to this,” he added.

US Defence Secretary Pete Hegseth, speaking at the Shangri-La Dialogue in Singapore in May, urged Washington’s partners to spend at least 3.5 per cent of their gross domestic product on defence.
But Manila said it would struggle to meet the target despite higher annual defence spending.
“We are a low-income country that has so many other development needs. We are in a catch-up mode, investing in defence capabilities and modernising our armed forces,” Arsenio Balisacan, the country’s chief economist, said in July.
Growing financial burden
The pensions debate highlights the recurring tug of war between budget constraints and political pressures, according to analysts.
“Military pensions have long been a problem, and to me, it points to deeper structural problems in our budget,” said a security analyst, who asked not to be identified.
The analyst said the problem was compounded by Manila’s constant push to ensure loyalty from the military.
In 2018, former president Rodrigo Duterte raised the base pay of troops by 58.7 per cent. Because pensions were tied to current salaries, authorities said the move created huge financial pressures for the government.

In 2023, then finance secretary Benjamin Diokno warned of an “imminent fiscal collapse”, with pension payments expected to reach 1 trillion pesos by 2035.
Retired military and uniformed personnel were on average receiving eight times the pensions that civilian workers were entitled to through their contributions, Diokno said.
Magno told The Philippine Star that calls for structural pension reform had been “repeatedly deferred”.
Chester Cabalza, president and founder of the Manila-based International Development and Security Cooperation think tank, warned of the adverse impact of higher pension payments on the country’s military modernisation, with the “fiscal time bomb” ticking for taxpayers.
He said the debate over pensions was linked to motivating the military to “become more patriotic” amid a tussle among the region’s major powers.
Meanwhile, the unnamed security analyst said the defence budget’s priority should be strengthening military hardware and called for a revamp of the pension system.
“Force restructuring can be done first, which would include identifying whether the number of MUPs and the positions are still appropriate given our current defence priorities,” he said.
Calbaza argued that pensions for military personnel should be aligned with those for civil servants. He called for new troops to contribute to their pensions and local governments to partly finance pensions of uniformed personnel, such as police and prison personnel and firefighters.
“True defence requires balance,” he added.


South Korean killer’s escape foiled, Singapore minister’s Mandarin speech: 7 Asia highlights

Style Edit: Fashion Asia Hong Kong 2026 asks what’s next for design and who will shape it

Success of Xi-Trump summit lies in what happens afterwards

Southeast Asia supports multilateralism, wary of US or China leadership: survey

The Philippines

Philippines’ rising military pensions risk triggering budget ‘time bomb’

Philippine military servicemen  take part in a live fire exercise during the annual US-Philippines joint Balikatan exercise in Rizal, Palawan, last year. Photo: AFP

Two Philippine FA-50 fighter jets fly with two US B-1 bomber aircraft during a joint patrol and training over the South China Sea last year. Photo: AP

US Secretary of Defence Pete Hegseth speaks during a joint press conference with his Philippine counterpart Gilberto Teodoro after their meeting at Camp Aguinaldo in Manila in March 2025. Photo: AFP

Philippine President Rodrigo Duterte addresses the troops during an anniversary celebration of the military in Quezon in 2017. Photo: AP

Philippine soldiers pose for a picture in front of the Japanese Type 88 surface-to-ship missile launcher during the annual Balikatan military drills between the US and the Philippines at Paoay, Ilocos Norte province, in May. Photo: Reuters

Philippine troops participate in live‑fire exercises in Barangay Aporawan, Aborlan, Palawan, during the Balikatan joint military drills between the US and the Philippines in April. Photo: Reuters

Philippines eyes drones and ‘system of systems’ to boost asymmetric defence

A drone hovers above a Philippine Coast Guard patrol vessel in Bataan province in April 2025. Photo: EPA-EFE

Defence Secretary Gilberto Teodoro says the Philippines needs to secure communications, artificial intelligence and operational networks to integrate unmanned systems into military operations. Photo: Reuters

US and Philippine marines prepare to terminate enemy drones during a counter-landing live fire drills as part of the Balikatan military exercises in Cagayan, northern Philippines, in May. Photo: Jeoffrey Maitem

Why Philippine, US forces tried to ‘scope’ a Chinese-linked steel plant in Mindanao

US and Philippine soldiers take part in counter-landing live‑fire exercises during Balikatan, the annual joint military exercises, at Long Point Beach in Palawan in April. Photo: Reuters

The Philippine Navy’s vessels docked at Subic Bay in Zambales. Photo: Jeoffrey Maitem

Philippine military servicemen are seen by an armoured personnel carrier during the annual US-Philippines joint military “Balikatan” exercise in Palawan in April 2025. Photo: AFP

Consular officials assist Chinese nationals after their release from Philippine custody in May. Photo: Embassy of China in the Philippines

Is Philippines’ aim to become an arms exporter like India overly ambitious?

The Indian Army’s BrahMos missile launcher on display during the Republic Day parade in New Delhi on January 26. Photo: Reuters

Philippine troops participate in counter-landing live‑fire exercises during the Balikatan joint drills with the US in Barangay Aporawan, Aborlan, Palawan, in April. Photo: Reuters

Philippine navy personnel and China coastguard members clash near a grounded Philippine warship at Second Thomas Shoal in the South China Sea in July. Photo: cnsphoto/Reuters

Philippines’ Marcos says China oil talks have ‘moved forward’ despite maritime row

Philippine President Ferdinand Marcos Jnr speaks at a Foreign Correspondents’ Association of the Philippines forum on Friday. Photo: AFP

Philippine President Ferdinand Marcos Jnr answers questions at a Foreign Correspondents Association of the Philippines lunch on Friday. Photo: AP

A Seasats Lightfish drone operates near a Chinese Type 052D guided-missile destroyer within the Philippines’ exclusive economic zone off Luzon on June 16. Photo: Seasats

This Week in Asia

Politics

News

Asia

Southeast Asia

The surge in pensions may weaken the country’s push to buy modern military assets to strengthen its deterrence


The surge in pensions may weaken the country’s push to buy modern military assets to strengthen its deterrence.


Philippines’ rising military pensions risk triggering budget ‘time bomb’

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The surge in pensions may weaken the country’s push to buy modern military assets to strengthen its deterrence

The surge in pensions may weaken the country’s push to buy modern military assets to strengthen its deterrence