MANILA — The Marcos administration’s economic team is actively reviewing the Modified Unified Pension (MUP) system for military and uniformed personnel (MUP), with discussions underway on potential further reforms or adjustments, Malacañang confirmed on January 14, 2026.
Presidential Communications Office (PCO) Undersecretary Claire Castro stated that the review is part of ongoing fiscal sustainability efforts, particularly in light of the P9.2 trillion projected long-term liability of the current MUP pension system.
Key Points from Palace Update
- Review Ongoing — The economic cluster (DBCC – Development Budget Coordination Committee) is examining options to make the system more sustainable without unduly affecting active and retired military/uniformed personnel.
- No Final Decision Yet — Castro emphasized that “all options are on the table,” but any change will be carefully studied to balance fiscal responsibility and the welfare of soldiers, police, firefighters, and other uniformed services.
- Previous Reforms — The MUP pension reform law (RA 11922) signed in 2024 already introduced a higher employee contribution (from 12% to 15% phased), adjusted pension formula, and higher mandatory retirement age — but projections still show long-term costs straining the national budget.
- Rationale for Review — Rising number of retirees, longer life expectancy, and the need to fund other priorities (infrastructure, education, health) amid slower-than-target growth and governance challenges.
Castro clarified that President Marcos remains committed to honoring the sacrifices of uniformed personnel:
“The President has repeatedly said that soldiers and uniformed personnel deserve fair and sustainable pensions. Any review is not about reducing benefits but about ensuring the system remains viable for generations to come.”
The review comes amid persistent calls from fiscal watchdogs and some lawmakers to revisit the MUP reform law, arguing that even after 2024 changes, the liability remains too large (estimated P9–10 trillion over decades).
No specific proposals (e.g., further contribution hikes, benefit adjustments, or new funding sources) have been finalized or publicly disclosed. Any major change would require either new legislation or amendments to RA 11922.
Here are some relevant visuals: President Marcos with AFP/PNP leadership, the MUP pension reform signing ceremony in 2024, and fiscal charts showing long-term pension liability projections.
The economic team’s review signals continued focus on long-term fiscal health — but any further changes to MUP pensions are expected to be politically sensitive.