A Philippines’ economic team has proposed that military and uniformed personnel contribute 5% of their monthly pay to their retirement funds as part of a plan to overhaul a pension system that’s putting a strain on the national budget.

The proposal will cover the first three years and will be supplemented by a contribution from the government of 16% of an employee’s monthly pay, the Department of Finance said in a statement late on Friday. The sharing ratio will be adjusted until the seventh year by which time employees will contribute 9% of their salaries and the state will pay 12%, according to the economic team crafting the pension reform bill.

Currently, the state funds the entire military pension, which has increased over the years to reach 130 billion pesos ($2.3 billion) in this year’s budget. Finance Secretary Benjamin Diokno in March warned of a “fiscal collapse” if the military pension system isn’t overhauled.

New entrants will be required to pay 9% of their salaries under the proposal, with a corresponding 12% to be contributed by the government, according to the initial plan framed by an inter-agency team that includes the finance department and the treasury bureau.

The team is currently holding consultations with uniformed personnel on the proposal. Reforms in military pension are being considered months after reports of unrest among troops, which defense officials were quick to quell.

The Philippines has a history of military unrest and coup attempts, with President Ferdinand Marcos Jr.’s father, the late dictator Ferdinand Marcos, ousted in 1986 after key defense and police officials defected and mass protests erupted.

Author: Manolo Serapio Jr.