MANILA, Philippines — The Marcos administration is currently reviewing the AFP pension reform program for military and uniformed personnel (MUP) in preparation for higher costs caused by the increase in basic pay of active duty personnel.
The pension of retired personnel is automatically indexed to the salary of active personnel of the same rank. This means that when the basic pay of active personnel increases, the pension of retirees will also increase. According to Budget Secretary Rolando Toledo, P6.3 billion is set aside for pension hike in the 2026 national budget, as part of the P21.7-billion allocation for the first tranche of base pay adjustment.
Toledo said that although the reform proposal was submitted “many years ago,” there are new developments that need to be studied under the current administration. But he assured the MUPs that the priority of the 2026 spending plan is their welfare, especially those who sacrifice for the safety of the country.
Apart from the base pay hike, the subsistence allowance was also increased from P150 to P350 per day, effective January 1. According to the Department of Budget and Management, P71.5 billion has been allocated to ensure the continuous implementation of the higher allowance. “The increase in subsistence allowance is not a luxury or just a favor – it is recognition of those who guard the country,” Toledo added.
Some experts are concerned about the impact of automatic pension indexation, as it could potentially increase the government's obligations to retirees amid limited fiscal space. Despite this, the government's message is clear: “We see you, we hear you, and we will never abandon you.”
