MANILA The Senate committee on finance approved on Tuesday the Department of National Defenses proposed 2013 budget amounting to P120.3 billion, including the P5.4 billion for the modernization of the Armed Forces of the Philippines (AFP).
Senator Franklin Drilon, chairman of the Senate committee on finance, said P53 billion of the budget will go to personal services while P39.7 billion will be spent for pensions.
Drilon said P19.8 billion will be earmarked for maintenance and other operating expenses, while only P5.4 billion will go for capital outlay.
At the budget hearing, DND Secretary Voltaire Gazmin said the P15 billion annual budget for the AFP Modernization Program (AFPMP) will be sourced from the GAA.
However, Drilon said the DND may face a budgetary-related problem since the GAA has limitations like the budget deficit.
With this, he said it obviously cannot provide in full the P75 billion requirements for the upgrade of the AFP in five years in order to balance internal security and territorial security concerns.
Under the 2013 budget, only P5.4 billion is earmarked for the AFPMP while the other P9.6 billion is lodged under the Unprogrammed Fund portion in the budget in which the release is subject to the availability of funds, noted Drilon.
The release of this P9.6 billion will depend upon the level of deficit we will be incurring. If there is enough fiscal space, that can be funded, but if not, we have to look for other means to fund this equally important endeavor, explained Drilon.
I challenge (DND) Secretary (Voltaire) Gazmin and the rest of the DND officials including the AFP to look for other source of funds, he said.
Drilon said the DND can utilize vast military camps throughout the country by making them productive and use the proceeds to fund the AFP modernization program.
We support the modernization program of the AFP. We just have look for funding in order that we can have some credible degree of acquisition of defense equipment to defend our territory, he noted.
Drilon said it is not only the sale but the utilization of the country military camps like the 48-hectare Fort Magsaysay camp and 30,000-hectare Hamindan camp in Panay can be the source of funds.
For his part, Gazmin said the DND has already formed a committee that will look into all military properties that the can be sold or leased to raise funds for the program.
Drilon, meanwhile, commended the Philippine Veterans Affairs Office (PVAO) administrator Ernesto Carolina for undertaking reforms that resulted to P4.2 billion per year savings since 2010.
Carolina told the committee that fraudulent claims have been eliminated by having the pension funds paid through the banks rather than through postal system.
When we totally shifted from the postal delivery system to direct remittance to the banks, we were able to save P4.2 billion. We used the system also in paying the total administrative disabilities (TAD) arrears, Carolina said.
Under the bank remittance system, Carolina said the PVAOs commitment to TAD arrears for the living World War III veterans has drastically reduced from P8.5 billion to only P3.53 billion.
I must commend the PVAO for the effort that they have taken to make sure that only the legitimate pensioners and veterans would be provided benefits under the law, Drilon said.
Also on the issue of veterans, Drilon said the DND and AFP has formed a committee which will look into a new system wherein the pension funds of the uniform personnel will be integrated into the Government Service Insurance System (GSIS).
When we integrate our uniform personnel into the GSIS, we have to have one time seed fund of about P3.1 trillion because this is needed in order to fund liabilities on the basis of the benefits that are being enjoyed by our pensioners today, he said.
During the press briefing, Gazmin confirmed the AFP plan to acquire fighter jet from Italy but source of funds remain the problem.
It is ongoing. It is in the stage of sort of signing. We are looking it a very serious but we have to considered the source of funds, Gazmin said.
He said the DND needs at least P75 billion to upgrade and modernize the AFP in order for the government to build a credible degree of defense at par with other neighboring countries. (PNA)