Press Release
September 12, 2012

P4 billion lost to ghost pensioners in the past years, says Drilon

At least P4.2 billion or more funds ended up in the pockets of ghost pensioners in the past years and would have continued to be lost to corruption each fiscal year had not the Philippine Veterans Affairs Office (PVAO) moved to clean its roster of pensioners, according to Senate Finance Committee chairman Franklin M. Drilon.

Drilon said that prior to the delisting and cleansing of pension list that PVAO undertook, the government's budget for the payment of the pension of veterans would reach to P15 billion annually. But as a result of the clean up where ghost, fake and unqualified pensioner and deceased war veterans were delisted, the budget went down to P10.59 billion.

"The difference of about P4.2 billion saved on a yearly basis is made possible with the effort of PVAO to flesh out the fraudulent claims. Meaning, before the reforms, this P4.2 billion would be paid to non-existing veterans or fictitious claimants," said Drilon.

"This has been corrected by shifting to bank system, by having the pension paid through the banks, instead of using the old system where pensioners get their benefits through cheques and the postal service," added Drilon.

"By this simple transferring of disbursement from the postal system to banking system saved the government approximately around P4.2 billion," stressed Drilon, "I commend the efforts they have undertaken to make sure that only the legitimate pensioners and veterans would be provided the benefits under the law."

Under the 2013 budget, noted Drilon, the government has earmarked P10.59 billion to pay for 231,081 pension claims.

Still, Drilon said the government owes war veterans the amount of P3.5 billion to compensate for their total administrative disability benefits which were left unfunded in the past years. To address this, Drilon said the Committee will look into some items in the unprogrammed funds which can be cut to accommodate the P3.5 billion requirements.

Meanwhile, Drilon said the government is still studying the possibility of integrating the pension of uniformed personnel into the Government Service Insurance System (GSIS) to address the looming military and police pension crisis.

"About 53 percent, or P40 billion, of the budget of the Defense Department is for the payment of pensions. There is hardly any fiscal space for capital outlay and modernization program," stressed Drilon.

Based on the initial study, said Drilon, the budget for the pension of uniformed personnel would grow up to P92 billion in 2017 from P71.58 billion next year.

"We have to resolve this before it reaches to a point where our budget for pension is much higher than our budget for the salaries of active personnel," ended Drilon.

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