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Attrition of Ep 2
Attrition of Ep 2
TABLE OF CONTENTS
CHAPTER I........................................................2
1.1 BACKGROUND.............................................................2
1.2 STATEMENT OF THE PROBLEM..........................4
1.3 IMPORTANCE OF THE STUDY..............................7
1.4 SCOPE AND LIMITATION........................................8
1.5 DEFINITION OF TERMS...........................................9
CHAPTER II.....................................................10
CHAPTER III...................................................14
CHAPTER I
1.1 BACKGROUND
When all of these are taken into consideration, these add up to the general
pervading attitude of uncertainty among senior Enlisted Personnel when it
pertains to continuing their military life in the Active Force. Currently, the AFP has
maximized the actual troop ceiling for its Active Force. However, the
abovementioned concerns could disrupt this continuity and balance within the
ranks, causing major gaps to its deliverables in the degree comparable to a
national security issue.
A look on the annual troop structure of the AFP over the years would reveal
a tapering in terms of number of senior Enlisted Personnel from the base to the
top. With the interplay of personnel management concepts as well as intervening
factors, almost a third of the AFP recruitment quota reach senior Enlisted
Personnel grade. This could worsen on the part of the AFP very quickly if not
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
4
In terms of Age, this factor could be a determinant to the end result of this
paper, as every respondent nears the retirement age or when other variables
influence their decision. As to Sex, there is no perceivable outcome influence of
this factor. However, this paper will be careful when it comes to frequency and
depth of range based on the pre-testing results. Rank on the other hand has
direct proportional relationship with retirement as one goes up in rank.
Moreover, the causal determinant of ethnicity could also be determined during
the progress of this paper, discussed particularly in Chapter IV herein.
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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The mean level of evaluation between the two (2) groups of respondents is
ninety (90) percent. This means that 90% of the time that this research is
conducted to the same group, the result would be the same 9/10 times. This will
be discussed in the presentation of data, analysis, and findings from the data in
Chapter IV of this paper.
There have been many changes and developments that transpired since the
passage of the AFP Personnel Management Act of 1948. There were several
legislations modifying, in effect, the provisions of said law. With the increasing
number of AFP pensioners, which most of their benefits are being taken annually
from the General Appropriations Act for the AFP, a pension crisis is very possible.
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
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The Arm e d F orces of t he Philippines Ret irem e nt and Se parat ion Be ne f it s Syst e m (AF P-RSBS) w as est ablished on
Dece m ber 30, 1973 by virt ue of Pre side nt ial De cre e (PD) No. 361, as am e nded by PD 1656, t o provide re t irem ent
and se parat ion be ne f it s t o t he m ilit ary m em bers of t he AF P. Howe ve r, be cause it f aile d on it s m andat e to
be com e a self -sust aining m ilit ary pension f und, t he AF P-RSBS w as eve nt ually dissolve d on De ce m be r 31, 2006
t hru Exe cut ive Order No. 590. W it h t he grow ing num be r of pe nsioners and t heir be nef it s cont inuously being
f ully f unde d out of t he annual appropriat ions f or t he AF P, f ears of a loom ing pe nsion crisis is now grow ing.
Base d on re cords of t he AF P Pe nsion and Grat uit y M anagem e nt C e nt er (AFP-PGMC ), t he governm e nt has yet t o
pay pe nsion arre ars am ount ing t o PhP16 billion f or alm ost 112,000 m ilit ary personnel.
AF P Re t ire e s. Of the total number of Table 1. Actual Numbe r o f AFP Re tire e s, 2005 -2010
retirees from the different service units Branch o f Se rvice 2005 20 06 2007 2008 2009 2010
of the AFP, those from the Philippine
Army account for more than half (67.4%) Phil. Army 3,097 3,509 4,431 3,259 3 ,599 3,097
while the Philippine Air Force and the Phil. Air Force 763 1,032 879 772 721 720
Philippine Navy account for 15.7% and
Phil. Navy 888 1,110 1,128 1,191 1 ,084 682
14.8%, respectively. The Technical
Tech. Admin. Service 88 103 99 81 88 95
Administrative Service, which includes
the personnel from the General Total 4,836 5,754 6,537 5,303 5 ,492 4,594
Headquarters Proper, the AFP Medical Source of basic dat a: AFP-PGMC
1
This includes the retirees under Section 4 and Section 5 (a) of PD 1638. Section 4 is an optional retirement for uniformed
personnel who have rendered at least 2 0 years of active service while Section 5(a) is compulsory retirement for uniformed
personnel at the age of 60 and have rendered at least 15 years of ac tive s ervice.
Considering the total number of retirees from the major services of the
AFP, 67% or more than half of those are from the Philippine Army while the
Philippine Air Force and Philippine Navy account for 16% and 15%, respectively.
The Technical or Support Services, to which personnel from the General
Headquarters, AFP Medical Center, Philippine Military Academy, and Presidential
Security Group are included, has the lowest figure at 2%.
The Arm e d F orce s of t he Philippine s Re t irem e nt and Se parat ion Be ne fit s Syst e m (AF P-RSBS) w as e st ablishe d on
De ce m ber 30, 1973 by virt ue of Pre side nt ial De cre e (PD) No. 361, as am e nde d by PD 1656, t o provide re t irem e nt
and se parat ion be ne fit s t o t he m ilit ary m e m bers of t he AF P. Howe ve r, be cause it faile d on it s m andat e to
be com e a se lf -sust aining m ilit ary pe nsion fund, t he AF P-RSBS w as e ve nt ually dissolve d on De ce m be r 31, 2006
t hru Exe cut ive Order No. 590. W it h t he grow ing num be r of pe nsione rs and t he ir be ne f it s cont inuously be ing
fully funde d out of t he annual appropriat ions for t he AF P, fe ars of a loom ing pe nsion crisis is now grow ing.
Base d on re cords of t he AF P Pe nsion and Grat uit y Manage m e nt Ce nt e r (AF P-PGMC ), t he gove rnm e nt has ye t t o
pay pe nsion arre ars am ount ing t o PhP16 billion for alm ost 112,000 m ilit ary personne l.
AF P Re t ire e s. Of the total number of Table 1. Actual Numbe r o f AFP Re tire e s, 2005 -2010
retirees from the different service units Branch o f Se rvice 2005 20 06 2007 20 08 2009 2010
of the AFP, those from the Philippine
Army account for more than half (67.4%) Phil. Army 3,097 3,509 4,431 3,259 3,599 3,097
while the Philippine Air Force and the Phil. Air Force 763 1,032 879 772 721 720
Philippine Navy account for 15.7% and
Phil. Navy 888 1,110 1,128 1,191 1,084 682
14.8%, respectively. The Technical
Tech. Admin. Service 88 103 99 81 88 95
Administrative Service, which includes
the personnel from the General Total 4,836 5,754 6,537 5 ,303 5 ,492 4 ,594
Headquarters Proper, the AFP Medical Source of basic dat a: AFP-PGMC
1
This includes the retirees under Section 4 and Section 5 (a) of PD 1638. Section 4 is an optional retirement for uniformed
personnel who have rendered at least 20 years of active service while Section 5(a) is compulsory retirement for uniformed
personnel at the age of 60 and have rendered at least 15 years of ac tive service.
1
Source: AFP Pension Gratuity Management Center
2
Source: Ibid.
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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Based on Figure 2, around 6,000 personnel will retire annually. Along with a
regular number of enlisted personnel retiring every year, the number of
pensioners will also continue to increase. Thus, from merely PhP9.7 billion in
2005, the budget for the AFP pension and retirement reached to PhP24.1 billion
in 2011, a 149% increase.
The AF P Pe nsion Budge t . Table 2. Actual Numbe r o f AFP Re tire e s, 2005-2010 (in billio n PhP)
Accordingly, from merely PhP9.7 20 05 2006 2007 2008 2009 2010
AFP Budge t fo r Pe rso nne l
billion in 2005, the budget for
in Active Se rvice 35.9 35.8 36.3 36.7 41.6 42.6
military pension and retirement Phil. Army 20.1 20.1 21.9 22.2 25.5 25.6
benefits ballooned to PhP24.1 Phil. Air Force 4.6 4.4 4.9 4.9 5.5 5.5
billion in 2011, a 149% increase in a Phil. Navy 6.5 6.7 7.1 7.5 8.2 9.1
span of seven (7) years. Tech. Admin. Service 4.7 4.7 2.4 2.1 2.4 2.4
AFP Budge t fo r Pe nsio n 9.7 10.0 11.4 13.5 15.9 19.4
While the annual budget for those and Re tire me nt Be ne fits
Phil. Army 5.9 6.1 7.7 8.2 10.4 13.0
in active service grew by a yearly
Phil. Air Force 1.7 1.8 1.5 2.0 2.1 3.1
average of 3.6% or about PhP1.3
Phil. Navy 1.8 1.9 1.9 3.0 3.2 2.9
billion from 2005 to 2010, the Tech. Admin. Service 0.2 0.2 0.2 0.3 0.3 0.4
allocation for pensioners increased
Source : AFP-PGMC
by an annual average rate of 15.1%
or by PhP1.9 billion every year. F ig u re 3 . P ro je c t e d P e n s i o n v s . A c t iv e M ilit a ry P a y ,
Source: AFP- GCM C
1 5 0 2 0 1 1 - 2 0 2 6 ( in b illio n P h P )
It is projected that the budget for
AFP pensioners will overtake the
1 0 0
salary allocation for active
servicemen by 2017. On the said
year, pension pay is expected to 5 0
amount to PhP54.1 billion
compared to the salary of active
military personnel which is 0
Se parat ion a nd Re t ire me nt Be ne fit s. At present, an amount equivalent to five percent (5%) of their monthly
base pay is automatically deducted from the salaries of all active officers and enlisted personnel of the AFP.
Upon a personnel’s separation or retirement from the service, he or she is refunded in one lump sum all of his
or her contributions2 .
PD 1638 otherwise known as the AFP Retirement Law of 1979 also provides that when an AFP officer or
enlisted personnel is retired from the AFP, he or she shall, at his or her option, receive a gratuity equivalent to
one (1) month of base and longevity pay of the grade next higher than the permanent grade he or she last held
for every year of service. This gratuity is payable in one (1) lump sum or a monthly retirement pay, the
equivalent of which is computed as follows:
Mont hly Pe nsion = (Base Pay + Longe vit y Pay) x (2.5 Pe rce nt x Numbe r of Ye ars in Se rvice )
Survivors of AFP officers and enlisted personnel also receive survivorship benefits. In addition, Section 17 of PD
1638 provides that when the salaries of active soldiers increase, the pension of retirees also increase. AFP
pensioners are, thus, also benefiting from the on-going implementation of the Salary Standardization Law III3 .
Re forming t he AF P Pe nsio n Sche me . To reduce the government’s ballooning pension requirements, the AFP
management is currently drafting a proposal which aims to reform the Armed Forces’ retirement scheme and
create the Philippine Military Pension System or the PMPS. The PMPS is envisioned to function as a
government-owned and controlled corporation which will establish a self-reliant funding scheme to guarantee
the payment of benefits of AFP retirees and pensioners. Other reform proposals include the repeal of the
automatic indexation of the pension to the prevailing salaries of active soldiers, the raising of the mandatory
retirement age to 58 from 56, the increase in the minimum years of service to 25 years from 20 years, as well
as the reduction of the survivorship benefit to 50% of a soldier’s pension from the current 75%.
2
By virtue of PD 1656.
3
Passed in 2008, the Salary Standardization Law III increased the salaries of all government employees. The salary
adjustments are to be made in four (4) tranches, the last of which is scheduled in 2012.
Thus, in Figure 3, while the annual budget for those in active service grew
by an annual average of 3.6% or around PhP1.3 billion from 2005 to 2010, the
allocation given to pension pay increased by a yearly average of 15.1% or PhP1.9
billion every year. With the rate that it is going, it is projected that the
appropriation for the AFP pensioners will be more than the salary of personnel in
the active service.
retirement scheme. This package aims to include the repeal of the automatic
indexation of the pension to the current salaries of active enlisted personnel, the
raising of the mandatory retirement age, the increase in the minimum years of
active military service, as well as the reduction of survivorship benefits.
All of the foregoing considered, will the AFP be facing a great debacle in
terms of loss of valuable, efficient, and competent personnel in the light of recent
efforts to restructure the AFP Personnel Management System and related laws in
order to address “the problem of the ballooning military pension?” [ CITATION Rea \l
1033 ]
If only this paper would state several null hypotheses it would read as
follows: i) there is no significant relationship in the perceptions of the
respondents on the AFP Attrition laws in relation to the issues regarding their
foresight or decision toward their future; ii) there is no significant relationship in
the perceptions of the respondents in relation to their career progression; and iii)
there is no significant relationship in the ranks of the senior Enlisted personnel
and the junior Enlisted Personnel in identified factors affecting career
progression.
Every Enlisted personnel of the AFP desires to progress in rank because the
higher one gets so is the salary he or she receives. As such, having a clear career
path is one of the most important aspects in the life of an Enlisted Personnel. In
fact, all the areas of personnel management directly affect their military careers.
Uncertainty in whatever area of personnel management could lead to problems
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
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On the side of government financial managers, the cost of the AFP pension
“rapidly and significantly increases yearly, which results in a fiscal burden with
constant claims against the government budget” [ CITATION Dut19 \l 1033 ] could be
resolved by “rationalization of the pension system of existing personnel, as well as
new entrants to the service.”[ CITATION Dut19 \l 1033 ] According to Budget Secretary
Benjamin Diokno, almost 60% of the AFP goes to the pension of retired AFP
personnel. He said that around PhP90-billion a year goes to the budget for retired
AFP personnel. He warned that if is not curbed “this will balloon into such a mess
that maybe half of our budget goes to the military.”[CITATION Dep17 \l 1033 ]
awareness and whether the former is influenced by the respondents’ rank, age, or
personal circumstances.
This paper also determined some of the factors that affect the
implementation of some related laws pertaining to personnel management in the
AFP with the hopes of providing options and recommendations that will help
improve the administration of a self-sustaining retirement and separation benefit
system. This paper will endeavor to find other possible win-win solutions to the
debacle the AFP and its personnel could be facing to conform to the present
needs and realities. It is thus an imperative to avoid such a situation from
worsening or just yet lessen the impact from the proposed changes to the AFP
pension system. This paper, hence, seeks to provide a comprehensive Transition
Assistance Program (TAP) for those Enlisted Personnel who would be affected in
the coming months, if not years.
The distinct respondents for this paper are the junior Enlisted Personnel of
the AFP, which holds the salary grade between E-1 and E-4, and the senior
Enlisted Personnel from E-5 to E-9. This would be further limited to those
assigned within Camp General Emilio Aguinaldo. As it stands, there are a total of
125,543 Enlisted Personnel of the AFP. This target population will be trimmed
down based on the geo-location where the researcher would have easier access
to the respondents, which is in Camp General Emilio Aguinaldo. In terms of
profile, the junior Enlisted Personnel are the workhorses of the AFP. They
comprise the largest number of personnel. On the other hand, the senior Enlisted
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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should be limited to all publications or news articles after the proposal reached
Congress.
1.5.5 Grade – the military rank of an Enlisted Personnel from the lowest
to the highest, they are: Private; Private First Class; Corporal; Sergeant; Staff
Sergeant; Technical Sergeant; Master Sergeant; Senior Master Sergeant; and Chief
Master Sergeant or their equivalent in the Philippine Navy and Philippine Air
Force.
1.5.15 Lateral Attrition – shall mean the separation from the military
service of commissioned officers who are found unqualified for promotion after
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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CHAPTER II
2.1 REVIEW OF RELATED LITERATURE
The paper, “An Assessment of the Morale and Welfare Program of the
Armed Forces of the Philippines,” by Rolito B. Abad was helpful in pointing out the
issues which impact the lives of Enlisted Personnel. It detailed how pay and
allowances, retirement, and promotion are highly regarded by Enlisted Personnel
as “contributory to institutional strength and high combat readiness.” [ CITATION
Rol05 \l 1033 ]This understanding, gained from said paper, validated that there is a
correlation between areas of personnel management concerns with the morale
and performance of Enlisted Personnel. The insights on said paper could be used
in limiting the areas of personnel management which are placed high among the
concerns of Enlisted Personnel. The other variable programs which were not
given high importance would be treated as contributory factors in the result of
this paper.
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Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
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and reserve personnel. It is written as a review of past studies on retirement, for the
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
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The researcher needed to review statistical methods, which the source was
readily available in the internet. The website provided answers to data
interpretation and helped with forming the backbone of this paper. The webpage:
“Understanding Research Results: Statistical Inference” discussed about methods
of statistics and basic about knowledge of statistics. [ CITATION Fla16 \l 1033 ]
Domestic sourced materials were very limited on the topic of this paper.
The researcher relied on new articles posted on major news websites for content.
Opinions of key writers on the subject matter were considered for inclusion
because of sparse sources, aside from the fact that matters related to this paper
are still hot issue as of this writing.
5673, seeking for reforms on the benefit and pension system. His bill promises
changes on the pension entitlement of a retiree which is automatically adjusted
to those in the active service, non-contributory nature of the pension, and the
early entitlement to pension benefits before the age of fifty-six. [ CITATION Fra17 \l
1033 ]
CHAPTER III
3.1 RESEARCH DESIGN
from media. Government news outfits were also referenced in the final draft of
the questionnaire to be given to the respondents. Using the structured survey
format, questions were formulated based on the possible outcome scenarios
related or co-related to the working topic. The possibility of a null hypothesis was
eliminated in this paper because of the positive formulation and factored-variable
outcome. Pre-testing were conducted with the draft questionnaires to ensure
that all possible scenarios are covered and considered before copies of the same
are reproduced and delivered to the various AFP offices and units. The
respondents comprise the homogenous demographics of senior Enlisted
Personnel in the AFP whose cumulative military service reached twenty (20) years
or around the compulsory age of retirement. This now forms the strata of Enlisted
Personnel who will be undergoing stratified sampling. From a list coming from the
Office of the Adjutant General of the AFP, respondents were picked by the
researcher through a list with random numbers. Those who were picked to
undergo one-on-one interviews for the purpose of getting their opinions on
certain questions were summarized and duly noted.
The setting of this paper covered a sample size enough for management
and collection. The simple method of obtaining the desired sample is to get ten
percent (10%) of each of the total population of the junior and senior Enlisted
Personnel inside Camp General Emilio Aguinaldo. However the Slovin’s Formula
was used to acquire the desired number of respondents based on the following
formula:
2
p
tq
Initial Sample =
d2
q=
and
Initial Sample
Total Sample
Initial =Sample - 1
1Population
+
The sample size needed to ensure adequate sampling of the respondents
was (number of respondents) or (% of the population). The researcher provided
a considerable figure for allowance in case of loss and non-recovery of
questionnaires. The number of questionnaires distributed per stratum is (indicate
number) or (indicate % number). However, those actually returned or recovered
by the researcher reached to (indicate number of returned questionnaire).
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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Survey respondents were limited to the senior Enlisted Personnel who are
nearing the retiring age of fifty-six or who has accumulated twenty years of
military service. Pre-test, distribution, and retrieval of questionnaires were done
from (mention the dates).
3.4 INSTRUMENTS
The survey respondents were from the two (2) strata: junior Enlisted
Personnel and the senior Enlisted Personnel. Several of the materials were based
on the probable end-result of proposed bill in Congress. These were the thematic
questions included in the questionnaires. Thus, from the perspective of the junior
Enlisted Personnel, to what extent are the differences with regard to their
foresight in relation to those actually “at risk” with the application of the AFP
Attrition laws and those who are not affected by its application. Another is the
perspective from the senior Enlisted Personnel, to what extent are the
differences with regard to their foresight in relation to those actually “at risk”
with the application of the AFP Attrition laws and those who are not affected by
its application.
support a conclusion. The draft was presented to the Thesis Adviser before final
printing.
Frequency of Distribution
Percentage = X 100
Number of Respondents
The measures of central tendency and measures of variability are used. The
measure of central tendency is called weighted mean, the formula of which is as
follows:
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
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After the data were gathered and collected, they were evaluated by the
researcher for clarity and conclusiveness. Using statistical inference and methods,
the information on the respondents’ demographic profile were computed for
frequency and percentage results. Although this was simply done by loading the
numbers in the pre-formatted spreadsheet containing the formulas, the process
of vetting all loaded information from each and every questionnaire cannot be
overlooked. The weighted mean was computed. Likewise the standard deviations
for every group of respondents were also computed. Another analysis is the scale
range wherein the responses fall within Strongly Agree, Agree, Disagree, and
Strongly Disagree. The mean value and the standard deviation acquired from the
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
27
data will be used for the t-Test. The t-Test was also used to answer the
hypothetical of this paper. The formula for the t-Test is as follows:
t= X1 X2
√ 1 2+ s2 2
√
1
n1 1 s n2 1 1
+
n1 n2
n n 2
1+ 2
Where:
(3.51 & above); Agree (2.51 –3.50); Disagree (0.51– 2.50); and, Strongly Disagree
(0.50 & below).
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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BIBLIOGRAPHY
Abad, R. B. (2005). Thesis-1794. Retrieved February 22, 2019, from National
Defense College of the Philippines:
http://www.ndcp.edu.ph/index.php/library/thesis-1794/
Balinbin, A. L. (2019, February 08). Duterte certifies AFP pension bill as urgent.
Retrieved February 22, 2019, from The Business World Online:
https://www.bworldonline.com/duterte-certifies-afp-pension-bill-as-urgent/
Cu, R. (2018, November 02). Draft of pension system plan for AFP creates new
unit to be run by GSIS. Retrieved February 22, 2019, from The Business Mirror:
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
to the Transition Assistance Program (TAPS)
30
https://businessmirror.com.ph/2018/11/02/draft-of-pension-system-plan-for-afp-
creates-new-unit-to-be-run-by-gsis/
Hannon, K. (2016, October 26). Ways you can find your bliss at the workplace.
Retrieved February 22, 2019, from Kerry Hannon:
http://elevatedlivingwellness.com
II, F. J. (2017, May 18). An Act Amending Pertinent Laws on the Retirement
Benefits and Pension of Uniformed Personnel of the Uniformed Services and
Providing Funds Therefore. Surigao del Norte, Philippines.
Nano, J. (2017, September 20). Dept. of Budget and Management plans to revise
pension plan of retired uniformed personnel. Retrieved February 22, 2019, from
UNTV News: https://www.untvweb.com/news/dept-budget-management-plans-
revise-pension-plan-retired-uniformed-personnel/
Extent of Foresight on the AFP Attrition with the Retirement Age of Sixty Years Old: Inputs
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