REAL ESTATE - The Philippines army is to sell its massive real estate portfolio to fund pay-outs to retired service personnel.

Real estate – including golf courses and at least one country club – and property equities make up P9.6bn (€0.15bn) of the P11.6bn fund. However, the geographic distribution of the assets makes a quick sell-off unlikely. Defense Secretary Alvaro Cruz described the assets as "dalmatians’ spots" and the government has ruled out a "lump sum or garage sale".

The Department of National Defense (DND) had already announced that it would set up a new pension fund to replace the Retirement and Separation Benefits System (RSBS), described by Cruz as a "hopeless case". An army committee will submit a plan for the new fund before the end of the year, when the old fund will be wound up and its assets transferred to state financial institutions.

However, Colonel Aldred Limoso, military attaché at the Philippines Embassy in London, said the new fund was "still on the drawing board".

"We’re trying to come up with what’s best," he said.

In the meantime, the government has earmarked an annual P1.6bn for RSBS members.

Cruz told a Manila press conference earlier this month that the new scheme would be "efficient" compared with the current one. Unlike the RSBS, the new fund will include government contributions of 9—12% against 5% currently deducted from soldiers’ base pay, and be run by professional investment managers according to "very strict investment criteria".

Several former RSBS officials, including a former chief of staff, are facing corruption charges for deals made during their tenure.

Columnist Honesto General of the Philippines Inquirer claimed this month: "The investments were not the result of bad judgement on the part of the retired generals who were running RSBS. It was grand larceny on a scale seldom seen in Philippines crime history.

"Maybe these crooked retired generals should be lined up against a wall in front of a firing squad made up of privates. That should do wonders to the morale of our troops."