Abuluyan, or passing of the hat for voluntary financial assistance for anyone losing a loved one, especially the family breadwinner, was the soldiers'' way of helping each other. It was during the anti-dissident campaign that top leaders of the AFP perceived the need to establish an institution that would provide some form of financial assistance to bereaved families of soldiers killed in battle.
On February 22, 1949, by virtue of a Letter Directive from the Headquarters of the National Defense Forces, the AFP Mutual Benefit System (AFPMBS) came into being. It work simply. Whenever a soldier died, the System would pay the family of the deceased a death benefit equal to the contributions of all officers and enlisted men of the AFP. The amount was advanced to the family of the deceased within 48 hours of the announcement of death. Membership to the system was compulsory.
The system institutionalized the abuluyan into an organization that carried a potential for growth. As the AFP increased in strength, it became necessary for the System to have a corporate existence to ensure its financial stability and continuity of operations. On September 1, 1965 pursuant to Letter Directive, GHQ, AFP, the System was incorporated as a non-stock, non-profit corporation with a new name - Armed Forces of the Philippines Mutual Benefit Association, Incorporated (AFPMBAI). Its name was later changed to Armed Forces and Police Mutual Benefit Association, Incorporated.
The new AFPMBAI or the Association was registered with the Securities and Exchange Commission on January 13, 1966 and was granted the license to operate as a mutual benefit association by the Insurance Commission in March of the same year.
To further ensure the Association''s mandate of seeing to its members'' welfare, President Ferdinand E. Marcos issued Letter Instruction No. 333 on November 6, 1975 placing the AFPMBAI under the control, management and operation of the AFP Chief of Staff.
Since then, two financial have originated from AFPMBAI, and have risen to their present status of growth and stability. The Armed Forces and Police Saving and Loan Association, Incorporated or AFPSLAI was established on December 1, 1972. Likewise, the Armed Forces and Police General Insurance Corporation or AFPGEN, originally a non-life insurance division of AFPMBAI, became a wholly-owned subsidiary. It was incorporated on March 22, 1979