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

The Philippines' military pensions are escalating, threatening the country's budget stability and hindering defense modernisation efforts. The Department of National Defence (DND) has projected a 142.95 billion pesos (US$2.3 billion) pension expenditure for military personnel in 2027, representing a 7% increase from the 2026 General Appropriations Act allocations.

Civil servants typically contribute to pension systems, but military personnel do not, meaning these funds are drawn from the national budget. Despite calls for reform, pension legislation has stalled in Congress. The Philippines faces US pressure to boost military spending, with funds for modernisation rising by 10 billion pesos to 50 billion pesos in 2026.

However, the proposed pensions nearly triple the modernisation budget. Former finance undersecretary Cielo Magno warned that the growing pension bill diverts resources from modernising the armed forces and other essential public services. Defence Secretary Gilberto Teodoro Jr. countered that only 49.6% of the pension budget supports military retirees, with the remainder allocated to security services.

He emphasized that soldiers provide continuous national security services without breaks. However, critics argue that the pension system is unsustainable and that the government should consider restructuring or aligning military pensions with those of civil servants, as well as seeking local government support.