THERE is a need for the Department of National Defense (DND) to have its independent capital outlay in order to strengthen its foundation and managerial capability, said its newly appointed secretary Gilberto Teodoro Jr. on Wednesday, June 7, 2023.

In his first press conference, Teodoro who will be holding the post for the second time -- first was during the term of former President Gloria Macapagal-Arroyo from 2007 to 2009 -- said the DND needs its own capital outlay to build up its capabilities.

Capital outlay is the money an organization or department can spend on assets it needs to run the business and make it more productive or efficient for a long term such as land, equipment and building.

“We cannot continue to have a Department of National Defense without a capital outlay for our own department... As a manager, my first job is to manage the whole institution itself. I want to help to lay the foundation for a DND for our future, to develop expertise in program management, analytics, prediction, other capabilities, contracting, international relations and to build up the career track of our own employees,” said Teodoro.

“Nakita n’yo ang aming opisina napakaliit, iilan lang ang empleyado dito, kwatro syentos lang. Ang minamanage natin na stakeholders dito ay aabot na ng milyon. Papano tayo, papano ang manager to client ratio?” he added.

(You see, our office is very small. There are only a few employees here, only 400. The stakeholders we manage here will reach a million. How are we, how is the manager to client ratio?)

Teodoro said he will also push for more funds for the military’s modernization.

He said that the marching order to him of President Ferdinand Marcos Jr. is to work with the legislative bodies and the Armed Forces of the Philippines (AFP) to find sustainable military and uniformed personnel (MUP) pension scheme in a bid to prevent a possible “fiscal collapse” as mentioned by Finance Secretary Benjamin Diokno.

MUP refers to personnel from the AFP, Bureau of Fire Protection, Bureau of Jail Management and Penology, Philippine Coast Guard, the Philippine Public Safety College, the Bureau of Corrections, and the Philippine National Police.

Teodoro said that initially, he aims to “minimize as much possible the hemorrhage immediatelym” noting that making the scheme a self-sustaining one takes time.

Marcos earlier approved reforms on MUP pension, particularly the removal of automatic indexation of pension to the salary of active personnel of similar ranks, pension will be received by MUP personnel at the age of 57 instead of 56, which is the mandatory retirement age, and mandatory contributions will be required for active personnel and new entrants, similar to the pension fund for government employees, the Government Service Insurance System (GSIS).

The new policy will cover all active personnel and new entrants, which means mandatory contributions will begin with those currently or about to enter service.

MUP pensions are currently being funded by the National Government through annual appropriation with the retirees not paying any contribution.

Teodoro expressed optimism that there will be not many objections about the proposals to seek contributions from MUP for the pension system similar to other government employees.

“You know, I think it’s the truism, if it is participatory then naturally the fund becomes sustainable but that being said there is no finalized agreement yet as far as I know,” he said.

“But I think that everybody just as long as they are contributing to the future, or their secured future, it’s just like us, we take on medical insurance, educational plans etcetera and they see perhaps that their money is going to something that will benefit in the future I don’t think there will be much objections,” he added. (SunStar Philippines)