Philippines Needs Further Awareness In Retirement Savings Plans, Experts Say

Philippines
Residents line up for water from Philippine Red Cross water tank trucks in Mandaluyong City, Philippines, March 21, 2019. (Photo: REUTERS/Eloisa Lopez)

A new study by Manufacturers Life Insurance Co. (Manulife) found out that in Asia, Taiwan has the highest rate of people saving up adequate finances for retirement while the list found the Philippines in the last place. Analysts said this could suggest that the country's aging community needs more preparation for life after retirement.

According to The Philippine Star, the survey revealed that most Taiwanese people have set aside retirement savings enough for approximately 4.5 years while many Filipinos have the lowest numbers at only 3.6 months. The list also includes Hong Kong, Malaysia, Indonesia, Thailand, and Singapore. China follows behind with retirement savings adequate for around 4.1 years.

For Melissa Henson, Manulife Philippines senior vice president and chief marketing officer, the Philippines being left behind in retirement investments could be affected by the Filipino culture that sees other family members taking care of relatives who go into retirement.

Henson clarified that while the Philippines' family-oriented culture is a good thing, it also has its consequences due to the changing economy. The financial expectation that Filipinos live in has resulted in a huge gap in the recommended number of years that someone has to prepare for before retirement.

"Assuming you will retire at 60, the average life expectancy in the Philippines is close to 70 years old. So that's at least 10 years of life expectancy beyond retirement. That's the minimum we should prepare for," she explained.

Henson pointed out that while the digital age can help provide retiring Filipinos of the future to secure part-time or full-time jobs after retirement, they should still invest in savings to prepare for the necessities and challenges of life after retirement.

Finance analysts recommended that the Philippine government should seek to implement policies and encourage programs that will boost the interest of aging and retiring Filipinos in retirement savings and insurance plans. While many Filipinos expressed interest in improving living standards after retirement, a small number committed to saving for more than a year for their future.

The Philippines currently has a number of savings policies that should help educate Filipinos on the importance of saving up for retirement. However, not too many programs have been launched or implemented to push aging communities to take retirement plans seriously.

The latest Manulife survey, according to researchers, pointed out the apparent fact that neighboring Asian countries are "more active and more aware in terms of preparing for their retirement." Analysts suggested that there should be increased discussions in the finance sector on building optimism towards future investments and proper handling of finances.

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