RSBS funds dropped by over P4 billion in past 7 years

The controversial military retirement and pension fund, which is about to be dismantled, lost over P4 billion in the past seven years while its net income plunged 94 percent from 2004 to 2005.

Data from the Retirement and Separation Benefits System (RSBS), which was released by the Armed Forces of the Philippines (AFP) Public Information Office, showed that its unaudited net profit in 2005 was only P14.16 million, which is way below the P223.98 million profits posted the previous year.

Similarly, its total assets dwindled by almost P4 billion over a period of eight years from P15.89 billion in 1997 to P11.62 billion in 2005.

RSBS suffered net losses of P759.89 million in 1998, P994.52 million in 1999, and P416.16 million in 2000, following the 1997 Asian financial crisis, which resulted in the depreciation of its real estate properties.

But in 2001, RSBS posted a net income of P38.9 million. It also subsequently recovered from 2001 to 2004 and posted a net income of P106.86 million in 2002, P127.75 million in 2003, and P223.98 million in 2004.

RSBS has mostly invested its funds, which is pegged at almost P9.6 billion, in real estate. It still has collectibles of up to P1 billion from unpaid loans.

The military and the Department of National Defense (DND) has announced that RSBS will be closed effective Dec. 31 and will be replaced by a civilian-run pension fund.

Defense Secretary Avelino Cruz said that RSBS’ idle real estate assets, worth close to P10 billion, would also be liquidated.

Proceeds from the sale of the properties and shares of stocks in real estate firms, plus member contributions, would be deposited in a trust fund in two government banks – the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP).

The RSBS was established as a private entity in 1973, with a P200-million seed money to provide pension for soldiers. It deducts five percent from the monthly base pay of soldiers, which will be returned to them with six percent interest, upon retirement.

Due to bad investments, the company has been forced to source the money for soldiers’ pension, which amounts to P10.6 billion annually, from the national budget.

RSBS officials assured the public last Friday that they have continuously released members’ contributions, plus the six percent interest, to beneficiaries. RSBS has been releasing P5 million a day to pay the pensions of retired soldiers.