Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 2686 
Introduced by: 
HONORABLE JAIME EDUARDO MARC D. COJUANGCO 
Representative, 1st District, Tarlac 
AN ACT 
CREATING A SUSTAINABLE FISCAL FRAMEWORK FOR THE PENSION 
SYSTEM OF THE MILITARY AND UNIFORMED PERSONNEL, PROVIDING 
MECHANISMS FOR THE DISPOSITION OF GOVERNMENT ASSETS FOR THE 
PURPOSE, AND APPROPRIATING FUNDS THEREFOR  
EXPLANATORY NOTE 
Securing the pension system for military and uniformed personnel (MUP) is an obligation 
of the State. Because of long-standing issues in the design of the system, however, the MUP 
pension is facing an imminent existential threat. The possibility that the state will be unable to 
meet the funding requirements of the MUP pension is real, and its signs are now evident given 
the government's budget deficit is at P187.7 billion pesos.  
From 2018 to 2022, MUP pension requirements have grown at an annual rate of 12% on 
the average. Such funding requirements will continue to elevate at a fiscally unsustainable rate, 
as pension payments are indexed to growing salaries of active MUP. Moreover, the ballooning 
MUP pension requirements, with no corresponding financing source cover, create significant 
fiscal risk to the government and expose the MUP pension from fiscal and economic shocks. 
Thus, it is imperative to make crucial changes to save the pension system.  
To keep the pension system alive for current and future pensioners, we must address the 
system's most significant weaknesses. First, the pension of the MUP is indexed to the salary of 
active personnel. Second, unlike other government employees, the MUP are entitled to a 
retirement pension starting at 20 years of service before reaching retirement age. Finally, unlike 
the pension of government employees under the Government Service Insurance System (GSIS), 
the MUP pension is non-contributory.  
The urgency of the situation is shown clearly by the size of the problem. The estimated 
total funding requirement is around P9.6 trillion if the status quo is maintained, according to the 
latest actuarial study by the GSIS 
The size of the problem will continue to expand as we recruit more MUP. The MUP 
pension is already nine times that of the average pensioner of the Social Security System (SSS) 
and three times that of the average GSIS pensioner.  
To address this staggering fiscal overhang, this bill, patterned after the Committee Report 
of the Adhoc Committee on the MUP Pension System of the 18th Congress chaired by 
Representative Joey Sarte Salceda, proposes the following reforms:  
(1)
Monthly disability pension. Grants a monthly disability pension, in lieu of
disability benefits provided under existing laws, with the range of rates increased
to between P5,000.00 to P20,000.00 a month;
July 30, 2025
4:19 pm


(2)
Mandatory contributions: (i) first three years: 5% employee share, 16% National
Government (NG) share; (ii) next three years: 7% employee share, 14% NG
share; and (iii) thereafter: 9% employee share, 12% NG share. The NG share shall
be used exclusively for pensions while the MUP's monthly contribution shall go
to the MUP Trust Fund, 45% of which is for the establishment of a life insurance
plan with death, accident, and disability benefits; another 45% for the
establishment of the Provident Fund; while the remaining 10% is for the payment
of disability pension;
(3)
Fund administrator of MUP pension. The MUP Trust Fund Committee will be
established as the administrator of the MUP Trust Fund, with the Bureau of
Treasury (BTr) as the Secretariat and the GSIS as the fund manager;
(4)
Pension indexation. Limits the automatic indexation of pension and survivorship
benefits to adjustments in the salary of those in the active service holding the
same rank, with a five percent (5%) annual cap on the salary increase of MUP for
the next ten (10) years following the effectivity of the measure. The bill also
allows the President, upon recommendation to the MUP Trust Fund Committee,
to increase pensions at a rate lower than the growth rate in salaries, when the
national government incurs an unmanageable public sector deficit;
(5)
Other sources of funding. Earmarks proceeds from the lease, joint development,
auction of development rights, or disposition of government properties identified
for the purpose, and investment income from the Trust Fund as sources of
additional funding for the maintenance of MUP Trust Fund; and proceeds from
the disposition of certain assets of the military and uniformed services for
budgetary support of the uniformed services for capital outlay and maintenance
and other operating expenditures;
(6)
Tax treatment of the MUP Trust Fund. Exempts MUP Trust Fund, its assets,
revenues, including all accruals thereto, and benefits paid, from all taxes,
assessments, fees, charges, or duties of all kinds;
In view of the urgency of the matter, the approval of this bill is urgently sought.  
JAIME EDUARDO MARC D. COJUANGCO 
Representative, 1st  District, Tarlac 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. 2686 
Introduced by: 
HONORABLE JAIME EDUARDO MARC D. COJUANGCO 
Representative, 1st District, Tarlac 
AN ACT  
CREATING A SUSTAINABLE FISCAL FRAMEWORK FOR THE PENSION SYSTEM 
OF THE MILITARY AND UNIFORMED PERSONNEL, PROVIDING MECHANISMS 
FOR THE DISPOSITION OF GOVERNMENT ASSETS FOR THE PURPOSE, AND 
APPROPRIATING FUNDS THEREFOR  
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
TITLE I  
General Provisions 
SECTION 1. Short Title. - This Act shall be known as the “Military and Uniformed 
Personnel Pension Act.”  
SEC. 2. Declaration of Policy. - The State duly recognizes the vital role of the military 
and uniformed personnel in providing internal and external security, promoting peace and order, 
and ensuring public safety.  
The State also recognizes its obligation to secure the pension system for the military and 
uniformed personnel given the distinctive personal risks in their role in nation building and 
national security.  
To protect the military and uniformed personnel against the extraordinary hazards, risks, 
and dangers that they encounter in the performance of their duties, the State shall ensure that 
there shall be an adequate, robust, and a well-managed insurance system that shall adequately 
and sustainably support their needs and that of their dependents.  
Towards these ends, the State shall guarantee the sustainability of the pension and other 
benefits of the military and uniformed personnel by creating a fiscal framework that fully 
supports their funding requirements.  
SEC. 3. Definition of Terms. - As used in this Act: 
(a)
Military and Uniformed Personnel refers to all employees of the government who
wear uniforms, with ranks, may be armed or unarmed, primarily involved in
national defense, enforcement of laws, and in the maintenance of peace, order,
and security and who belong to any of the following services: Armed Forces of
the Philippines, Philippine National Police, Philippine Coast Guard, Bureau of
Fire Protection, Bureau of Jail Management and Penology, Bureau of Corrections,
and the employees of the Hydrography Branch of the National Mapping and
Resource Information Authority who were transferred from the Bureau of Coast


and Geodetic Survey;  
 
(b) ​
Pension refers to the sum of money representing the monthly retirement pay or 
the monthly life annuity of a military and uniformed personnel;  
 
(c) ​
Survivorship Pension refers to the monthly benefit or the monthly life annuity of 
the beneficiaries of a military and uniformed personnel who is retired or separated 
under the provisions of existing laws.  
 
TITLE II  
Fiscal Sustainability of Pension Benefits  
 
SEC. 4. Fiscal Risk Management. – To ensure that fiscal risks related to the military and 
uniformed personnel pension system are managed and addressed, the Secretary of Finance, as 
Chairperson of the Military and Uniformed Personnel Trust Fund Committee created under 
Section 9 of this Act, shall:  
 
(a) ​
Formulate policies, consistent with law, to ensure the fiscal sustainability of the 
pension of military and uniformed personnel;  
 
(b) ​
Assess possible risks to the fiscal sustainability of the pension of military and 
uniformed personnel and propose appropriate policy interventions;  
 
(c) ​
Identify, manage, and control risks that the pension of military and uniformed 
personnel may pose to the national government's fiscal position;  
 
(d) ​
Inform Congress of such risks through the annual Fiscal Risk Statement and 
propose legislative reforms to address such risks; and  
 
(e) ​
Obtain information from any officer or office of local governments and agencies 
and instrumentalities of the national government, as may be necessary.  
 
SEC. 5. Maturity Benefit from the Insurance Plan. A military and uniformed personnel 
who is retired or separated under the provisions of existing laws, or the qualified survivors in the 
case of death before retirement or separation, shall receive the maturity benefit from the life 
insurance plan funded by mandatory contributions paid by the military and uniformed personnel 
under Section 14 of this Act. The Military and Uniformed Personnel Trust Fund Committee as 
created under Section 9 of this Act, shall provide mechanisms to allow the enjoyment of this 
benefit either as a lump sum or in annuitized payments.  
 
SEC. 6. Disability Pension. - In lieu of disability benefits provided under existing laws, a 
military and uniformed personnel who is retired by reasons of disability, which is the proximate 
result of wounds or injuries sustained or sickness or disease acquired in the line of duty shall 
receive a monthly disability pension corresponding to the disability incurred at the time of 
separation:  
 
(a) ​
If and while the disability is rated twenty-five percent (25%) --Five thousand 
pesos (P5,000.00);  
 
(b) ​
If and while the disability is rated fifty percent (50%) - Ten thousand pesos 
(P10,000.00);  
 
(c) ​
If and while the disability is rated seventy five percent (75%) - Fifteen thousand 
pesos (P15,000.00); and  
 
(d) ​
If and while the disability is rated one hundred percent (100%) - Twenty thousand 
pesos (P20,000.00).  


 
SEC. 7. Capped Automatic Indexation to Adjustments in Active Personnel Pay. The 
adjustment in pension of retired or separated military and uniformed personnel and survivorship 
pension of qualified survivors shall be automatically indexed to adjustments in the salary of 
military and uniformed personnel in active service holding the same rank: Provided, That within 
ten (10) years from the effectivity of this Act, the adjustment in the salary of active military and 
uniformed personnel shall not exceed five percent (5%) at any given year and the adjustment in 
the pension and survivorship pension shall not exceed five percent (5%) during the same year.  
 
The President of the Philippines is hereby authorized, upon the recommendation of the 
Military and Uniformed Personnel Trust Fund Committee as created under Section 9 of this Act, 
and subject to consultation with the President of the Senate and the Speaker of the House of 
Representatives, to increase the pension and survivorship pension at a rate lower than the 
adjustment in the salary of active military and uniformed personnel of the same rank if the 
national government incurs an unmanageable public sector deficit.  
 
TITLE III  
Military and Uniformed Personnel Trust Fund  
 
SEC. 8. Military and Uniformed Personnel Trust Fund. The Military and Uniformed 
Personnel Trust Fund, hereinafter referred to as the MUP Trust Fund, is hereby created for the 
budgetary support of the military and uniformed services, including the payment of pension and 
survivorship pension under existing laws and the disability pension and other benefits under this 
Act.  
 
SEC. 9. Military and Uniformed Personnel Trust Fund Committee. - To carry out the 
declared policy of this Act, the Military and Uniformed Personnel Trust Fund Committee, 
hereinafter referred to as the Committee, is hereby created. The Committee shall be organized 
within ninety (90) days from the effectivity of this Act. The Committee is composed of the 
following members:  
 
(a) ​
Secretary of Finance, as Chairperson;  
 
(b) ​
Secretary of Budget and Management;  
 
(c) ​
Secretary of National Defense;  
 
(d) ​
Secretary of the Interior and Local Government;  
 
(e) ​
Secretary of Justice;  
 
(f) ​
Executive Secretary of the Office of the President; and 
 
(g) ​
President and General Manager of the Government Service Insurance System.  
 
The Bureau of the Treasury shall serve as the Secretariat of the Committee and maintain 
the records and accounts of all investments, receipts, disbursements, and other transactions 
relating to the management, administration, and utilization of the MUP Trust Fund: Provided, 
That these records and accounts are maintained in accordance with the existing accounting and 
auditing laws, rules, and regulations and audited by the Commission on Audit.  
 
SEC. 10. Powers and Functions of the Committee. - The Committee shall exercise the 
following powers and functions:  
 
(a) ​
Act as Trustee of the MUP Trust Fund and such other assets as may be assigned to 
the pension system of the military and uniformed personnel and direct how the 
assets of the MUP Trust Fund are managed;  


 
(b) ​
Manage the MUP Trust Fund, through the fund manager designated under Section 
11 herein, and ensure that the fund is actuarially and financially optimal and 
sustainable;  
 
(c) ​
Authorize the necessary expenses to manage and administer the MUP Trust Fund;  
 
(d) ​
Authorize and direct the creation of a life insurance system for military and 
uniformed personnel which shall cover death and disability benefits in addition to 
those provided under this Act, to account for the significant risks involved in 
military and uniformed service and indemnify personnel who suffer such risks, 
and set reasonable mandatory insurance premiums therefor: Provided, That the 
insurance system shall be administered by the Government Service Insurance 
System and supervised by the Insurance Commission: Provided, further, That the 
insurance system shall be managed separately from the pension system: Provided, 
finally, That, subject to the authorization of the Committee, the insurance system 
may undertake investments in debt and equity securities and in the money market, 
real estate investments, and other viable investments;  
 
(e) ​
Authorize and direct the creation of a provident fund or a mutual fund;  
 
(f) ​
Implement and execute functions related to the disposition of assets identified 
under this Act;  
 
(g) ​
Create, manage, and utilize separate trust fund accounts for the budgetary support 
of the military and uniformed services, retirement and survivorship benefits of 
military and uniformed personnel, provident or mutual fund and insurance 
provisions; and  
 
(h) ​
Cause the undertaking of a survey or consultation to assess the preferences of 
military and uniformed personnel on the features of the pension system, including 
willingness to pay for contributions and interest in various benefit and investment 
schemes;  
 
(i) ​
Commission an actuarial evaluation of the fiscal sustainability of the pension 
scheme, including specific recommendations on the rates for contributions and 
investment options for the MUP Trust Fund, as applicable; and  
 
(j) ​
Perform other necessary functions for the effective management of the MUP Trust 
Fund: Provided, That within one (1) year from the effectivity of this Act, the fund 
manager shall conduct the studies stated in Subsections (h) and (i) herein: 
Provided, further, That the findings and recommendations obtained from the 
studies shall be submitted to the Committee which shall promulgate implementing 
rules and regulations with respect to the mandatory contribution scheme, and 
other features of the pension scheme as applicable: Provided, furthermore, That 
an amount not exceeding Thirty million pesos (P30,000,000.00) is hereby 
appropriated for the conduct of the studies: Provided, finally, That the fund 
manager may engage the private sector, as needed, to ensure quality and 
timeliness in the implementation of the survey, consultation, and actuarial 
evaluation.  
 
SEC. 11. MUP Trust Fund Manager. - The Government Service Insurance System is 
designated as the fund manager and benefits administrator of the MUP Trust Fund, and shall:  
 
(a) ​
Implement an investment management and benefits administration strategy as 
directed by the Committee;  
 


(b) ​
Monitor market and economic trends and track securities to make informed 
investment decisions;  
 
(c) ​
Recommend its portfolio strategy to the Committee;  
 
(d) ​
Track financial results of companies in the portfolio and its various metrics, 
including price-to-earnings ratios, inflation-adjusted return, sales, earnings, and 
dividends; and  
 
(e) ​
Perform other acts necessary to fulfill its mandate under this Act, or such Acts 
that may be delegated by the Committee.  
 
SEC. 12. Structure, Staffing Pattern, and Operating Budget. The organizational 
structure and staffing pattern for the management of the MUP Trust Fund within the Government 
Service Insurance System and for the creation of the MUP Trust Fund Secretariat within the 
Bureau of the Treasury shall be approved by the Committee within ninety (90) days from the 
enactment of this Act: Provided, That appointees to various positions shall comply with the 
qualification standards approved by the Civil Service Commission: Provided, further, That the 
Government Service Insurance System shall be entitled to a management fee, to be charged 
against the MUP Trust Fund and its derivative incomes, including budgetary requirement 
commensurate to the expertise and services rendered for the salaries and benefits of officials and 
employees assigned to the Committee.  
 
SEC. 13. Joint Responsibility. For the purpose of ensuring that only qualified military 
and uniformed personnel retirees and beneficiaries shall receive the retirement pension or 
separation benefits, the respective services or mother units shall assist and share, jointly or 
separately, the duty and obligation with the Committee in monitoring proof of life or life events 
that will affect the qualification of pensioners and beneficiaries to receive the pension or benefit. 
The initial computation of pension and benefits accruing to each retiree or beneficiary shall be 
jointly undertaken and agreed upon by the concerned mother unit and the Committee.  
 
SEC. 14. Funding Sources. - The MUP Trust Fund shall be funded through the 
following:  
 
(a) ​
Capitalization. 
- 
The 
amount 
of 
One 
hundred 
thirty 
billion 
pesos(P130,000,000,000.00) shall be appropriated to the MUP Trust Fund to 
cover the pension requirement of the Fiscal Year for which the fund was 
appropriated. Such sums as may be necessary for the sustainability of the fund as 
determined by the Committee shall be automatically appropriated and be 
automatically released to the MUP Trust Fund.  
 
(b) ​
Mandatory Contributions. - It shall be mandatory for military and uniformed 
personnel to contribute a percentage of their monthly compensation as their 
personal share to the MUP Trust Fund. There shall also be a National Government 
share which shall be automatically appropriated and used exclusively to fund 
pension benefits of the military and uniformed personnel. The mandatory 
contributions shall be allocated as follows:  
 
i. ​
For the first three (3) years after the effectivity of this Act, military and 
uniformed personnel shall contribute five percent (5%) of their monthly 
compensation as personal share, while the National Government shall 
provide an equivalent of sixteen percent (16%) as its share;  
 
ii. ​
Thereafter, for the next three (3) years, military and uniformed personnel 
shall contribute seven percent (7%), while the National Government shall 
provide fourteen percent (14%); and  
 


iii. ​
For every year thereafter, military and uniformed personnel shall 
contribute nine percent (9%) and the National Government shall provide 
twelve percent (12%).  
Provided, That contribution rates may be adjusted by the fund manager, subject to 
actuarial validation: Provided, further, That forty-five percent (45%) of mandatory 
contributions of the military and uniformed personnel shall be used for the 
establishment of a life insurance plan as authorized under this Act, with death, 
accident, and disability benefits in addition to those mandated under this Act; 
forty-five percent (45%) shall be used to establish the Provident Fund; and ten 
percent (10%) shall be used for the payment of disability pension granted under 
this Act: Provided, furthermore, That such allocations may be periodically 
adjusted by the Committee based on actual need and actuarial soundness: 
Provided, finally, That the life insurance plan shall include a cash benefit that 
shall be due and collectible at the plan's maturity date, which shall be the date of 
separation from service.  
 
(c) ​
Additional Sources of Funding. The MUP Trust Fund may be augmented from the 
unprogrammed appropriations and proceeds derived from the lease, joint 
development, auction of development rights, or disposition of government 
properties identified for the purpose, investment income from the MUP Trust 
Fund identified and overseen by the fund manager subject to actuarial validation, 
and savings of the National Government.  
 
SEC 15. Government Guarantee. The government of the Republic of the Philippines 
hereby guarantees the fulfillment of the obligations of the MUP Trust Fund to its members when 
they fall due.  
 
SEC. 16. Disposition of Military and Uniformed Services Assets. Within thirty (30) days 
from the effectivity of this Act, the concerned military and uniformed services shall submit a 
complete list of their real assets in the manner prescribed by the Committee to identify additional 
sources of funding for budgetary support of their services, and augment the financing of the 
separation, retirement, and pension benefits of their military and uniformed personnel under 
existing laws and this Act.  
 
Thereafter, the Committee shall conduct a complete accounting and inventory of the 
assets of military and uniformed services that may be used to support the MUP Trust Fund, 
including the amount, value, description and nature of such funds, properties, assets, records, 
choses in action, and other rights, claims, or causes of action pertaining thereto, and submit a 
report to the Office of the President, Congress, and the Commission on Audit.  
 
Within thirty (30) days from the receipt of the inventory by the Committee, the 
Commission on Audit shall audit the accounting and inventory of the assets of concerned 
military and uniformed services to determine the completeness of the inventory and establish the 
reasonableness of the asset valuation.  
 
Within one (1) year from the submission of the accounting and inventory of the assets of 
concerned military and uniformed services, the Commission on Audit shall submit to the 
Committee the audit report, including the complete list of the assets of concerned military and 
uniformed services and their valuation, and the empirical basis and the methodologies employed 
for the valuation.  
 
The Committee shall, within fifteen (15) days from the receipt of audit report, publish the 
audit report in at least two (2) newspapers of general circulation. Nothing herein shall be 
construed as preventing the designated disposition entity from procuring a third-party appraisal 
of any of the assets of concerned military and uniformed services prior to or while preparing the 
privatization or disposition plans of the assets.  
 


The Committee shall coordinate with the Office of the President, Philippine Reclamation 
Agency, and other disposition entities to be identified by the Committee in the execution and 
delivery of this mandate.  
 
The Committee shall prioritize the disposition modes that may generate income from 
these assets without undertaking the sale thereof except when the Committee determines that 
may sell selling a specific asset is the most optimal financial option: Provided, That the 
Committee only portions thereof to meet the financial requirements.  
 
To optimize revenues from the assets of the concerned military and uniformed personnel 
services, the Committee may seek the services of the Privatization Group of the Department of 
Finance which shall recommend to the Committee the most financially advantageous manner of 
disposition of the assets.  
 
Unless otherwise directed by the President of the Philippines as the Commander-in- Chief 
and upon the recommendation of the Secretary of Finance, the proceeds from the disposition of 
assets of the concerned military and uniformed services shall be earmarked for the budgetary 
support of the military and uniformed services for capital outlay and maintenance and other 
operating expenditures. The Committee shall allocate the proceeds from the disposition of assets 
based on the funding requirements of the specific purposes. The proceeds from the disposition of 
asset of the military and uniformed services shall inure to the benefit of, or as budget support to, 
the service to which the asset belongs if used towards budgetary support for capital outlays, 
pension fund, and maintenance and other operating expenses.  
 
Within one (1) year from the effectivity of this Act, the military and uniformed services 
may add to the list such real assets required for identification and submission under this Section 
and which belonged to the military and uniformed services prior to the effectivity of this Act. 
Any real asset that is required by this Act to be included in the submitted lists and which are not 
included in actual submissions by the military and uniformed services may be disposed by the 
MUP Trust Fund Committee in the manner it deems appropriate.  
 
SEC. 17. Tax Treatment of the MUP Trust Fund. – Notwithstanding any law to the 
contrary, the MUP Trust Fund, its assets, revenues, including all accruals thereto, and benefits 
paid, are exempt from all taxes, assessments, fees, charges, or duties of all kinds. These 
exemptions shall continue unless expressly and specifically revoked.  
 
Subject to Section 20 of this Act, the MUP Trust Fund, the properties of the military and 
uniformed services identified by the Committee to be disposed and sums or monies for the 
payment of the benefits under this Act are exempt from attachment, garnishment, execution, levy 
or other processes issued by the courts, quasi-judicial agencies or administrative bodies and from 
all financial obligations of the members, including pecuniary accountability arising from or 
caused or occasioned by the members' exercise or performance of official functions or duties, or 
incurred relative to or in connection with the members' position or work except when the 
monetary liability, contractual or otherwise, is in favor of the MUP Trust Fund.  
 
All other applicable tax exemptions granted to the Government Service Insurance System 
shall also apply to the MUP Trust Fund.  
 
TITLE IV 
 Transitory Provisions  
 
SEC. 18. Transfer of Power and Functions. For purposes of administration of military 
and uniformed personnel pension and retirement benefits, the powers and functions of units or 
instrumentalities of agencies that employ military and uniformed personnel and administer their 
pension system or parts thereof are hereby transferred to the MUP Trust Fund Committee.  
 
SEC. 19. Period of Transfer. - There shall be a transition period of five (5) months from 


the effectivity of this Act to implement the transfer of powers and functions, rights, assets, and 
liabilities mentioned in this Title: Provided, That the same transition period shall be provided to 
allow the units or instrumentalities of agencies administering the military and uniformed 
personnel pension system to restructure: Provided, further, That all civilian personnel in the units 
or instrumentalities administering the military and uniformed personnel pension system affected 
by the transfer of powers and functions provided in this Title shall continue in office without 
need of reappointment: Provided, finally, That civilian employees in the units or instrumentalities 
of agencies administering the military and uniformed personnel pension system who opt to retire 
or resign as a result hereof, if qualified, shall be allowed and be entitled to retirement and 
separation benefits under existing laws to officials and employees affected by an approved 
reorganization program.  
 
TITLE VI  
Final Provisions  
 
SEC. 20. Non-encumbrance of Benefits. - The benefits authorized under this Act, except 
as provided herein, are not subject to attachment, garnishment, levy, execution or any tax 
whatsoever, and may not be assigned, ceded, or conveyed to any third person: Provided, That if a 
retired or separated military and uniformed personnel who is entitled to any benefit under this 
Act has unsettled money or property accountabilities incurred while in the active service, an 
amount not exceeding fifty percent (50%) of the pension gratuity or other payment due to the 
military and uniformed personnel or their survivors under this Act may be withheld and be 
applied to settle such accountabilities.  
 
SEC. 21. Financial Literacy and Career Transition Training. - The Bangko Sentral ng 
Pilipinas, in coordination with the military and uniformed services, shall provide mandatory, 
periodic financial literacy training for active personnel. The military and uniformed services 
shall formulate skills workshops for active personnel who plan to transition to other careers 
outside of the uniformed service.  
 
SEC. 22. Penal Clause. Any person who participates directly or indirectly in the 
commission of fraud, falsification, misrepresentation of facts, collusion or any similar anomaly 
in the issuance of any certificate or document for any purpose connected with this Act shall upon 
conviction be punished by a fine of not less than the amount defrauded but not more than 
threefold of such amount or imprisonment of not less than six (6) months and one (1) day to six 
(6) years and perpetual disqualification from holding public office and from practicing any 
profession licensed by the government.  
 
SEC. 23. Implementing Rules and Regulations. Within sixty (60) days from the 
effectivity of this Act, the Secretary of Finance shall, in consultation with the Secretaries of 
National Defense, Interior and Local Government, Justice, Transportation, Environment and 
Natural Resources, Budget and Management, and the Head of the Government Service and 
Insurance System, promulgate the necessary rules and regulations for the effective 
implementation of this Act.  
 
Supplemental rules and regulations governing the management and administration of the 
pension system of the military and uniformed personnel may be issued within one (1) year from 
the effectivity of this Act.  
 
SEC. 24. Repealing Clause. The pertinent provisions of these laws are hereby repealed:  
 
(a) ​
Presidential Decree No. 361, entitled “Providing for an Armed Forces Retirement 
and Separation Benefits System,” as amended by Presidential Decree No. 1656 
and Presidential Decree No. 1909;  
 
(b) ​
Sections 23, 24, 26, and 31 of Presidential Decree No. 1638, entitled 
“Establishing a New System of Retirement and Separation for Military Personnel 


of the Armed Forces of the Philippines and for Other Purposes,” as amended by 
Presidential Decree No. 1650;  
 
(c) ​
Section 11 of Republic Act No. 340, as amended, entitled “An Act to Establish a 
Uniform Retirement System for the Armed Forces of the Philippines, to Provide 
for Separation Therefrom, and for Other Purposes”, as amended;  
 
(d) ​
Sections 16, 17, 18, 19, 20 and 22 of Republic Act No. 5976, otherwise known as 
the “Coast Survey Officers Retirement and Separation Act of 1969”;  
 
(e) ​
Section 77 of Republic Act No. 6975, otherwise known as the “Department of 
Interior and Local Government Act of 1990”, as amended; and  
 
(f) ​
Sections 4 and 5 of Republic Act No. 9040, otherwise known as the “AFP Tax 
Exemption for Pay and Allowances Act of 2001.”  
 
All other laws, rules and regulations, and other issuances or parts thereof, which are 
inconsistent with the provisions of this Act, are hereby repealed, amended, or modified 
accordingly.  
 
SEC. 25. Separability Clause. - If any provision or part of this Act is declared invalid or 
unconstitutional, the remaining parts or provisions not affected shall remain in full force and 
effect.  
 
SEC. 26. Effectivity. - This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation.  
 
Approved,