The Philippines' pension system faces significant challenges and requires urgent reforms, according to the 2023 Mercer CFA Institute Global Pension Index (GPI). The report highlights the inadequacy of social security benefits, lack of access to formal retirement savings plans for a large portion of the workforce, and the urgent need to ensure a sustainable and equitable system for retirees.
While it is common to think that social security and company retirement plans will fully cover retirement expenses, it is crucial to assess if these assumptions are too optimistic. This complacency can hinder adequate preparation for retirement. The Mercer CFA Institute Global Pension Index (GPI), launched in 2009, annually ranks pension systems worldwide, evaluating income adequacy, sustainability, and fairness.
The goal is to provide insights for stakeholders to improve retirees' quality of life. The Philippines has participated in this survey since 2019, demonstrating a commitment to benchmarking and improvement.In the 2023 edition, the Philippines received a 'D' rating with a score of 45.2 out of 100, ranking 46th out of 47 countries. This highlights significant weaknesses in the current pension system, which urgently requires reforms to enhance its adequacy, sustainability, and integrity. The report reveals that social security benefits are often insufficient to replace a substantial portion of pre-retirement income. For instance, the average monthly pension from the SSS is P5,123, and for GSIS, it is P18,525, which may not be enough to sustain a comfortable lifestyle, especially for retirees with health issues. Furthermore, the system lacks regular adjustments for inflation or rising living costs, eroding retirees' purchasing power.Another concern is the lack of adequate poverty protection, leaving many older individuals struggling to cover basic expenses. A staggering 80 percent of workers, particularly those in the informal sector, freelancing, and the gig economy, lack access to formal retirement savings plans. This leaves them highly vulnerable during retirement with no safety net. The report recommends increasing support for the poorest elderly, setting aside government funds for a sustainable pension system, introducing rules against premature withdrawals, and reviewing standards for private companies managing pension funds. These same recommendations were made in 2019 when the Philippines first participated in the GPI, emphasizing the need for long-term efforts to improve the pension system. While both the public and private sectors are exploring ways to enhance it, individuals must be proactive in ensuring a good quality of life in retirement. Repurposing the focus from solely relying on social security and company plans to actively managing individual retirement savings and exploring supplementary income sources can mitigate future financial risks.
PENSION SYSTEM SOCIAL SECURITY RETIREMENT PHILIPPINE ECONOMY GLOBAL PENSION INDEX
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Philippine Senate Faces Moral Dilemma Over Senior Citizen Pension BillThousands of Filipino seniors rallied outside the Philippine Senate, demanding the passage of a bill that would provide a universal social pension. The House of Representatives approved the bill, but its delay in the Senate for eight months has raised concerns about the government's commitment to its elderly citizens.
Read more »
Philippine Coast Guard Stands Firm Against Chinese Vessels in West Philippine SeaA Philippine Coast Guard (PCG) ship, BRP Cabra, successfully deterred three Chinese vessels from approaching the coast of Zambales. The incident highlights the ongoing tensions in the disputed West Philippine Sea. Meanwhile, the PCG launched a comic book to counter alleged Chinese disinformation and promote awareness about the country's maritime rights.
Read more »
Philippine Navy: China's Use of LRAD Signals Escalating Aggression in West Philippine SeaThe Philippine Navy has condemned the use of Long-Range Acoustic Devices (LRAD) by the China Coast Guard (CCG) against a Philippine Coast Guard vessel, calling it a clear escalation of aggression in the West Philippine Sea. Rear Admiral Roy Vincent Trinidad, spokesperson for the Philippine Navy in the WPS, stated that the LRAD signifies an increase in the Chinese Communist Party's aggression and underscores their illegal presence and coercive actions in the disputed waters. He linked this incident with China's broader strategy of asserting territorial claims over the South China Sea, citing the recent arrest of a Chinese national involved in intelligence surveillance of Philippine infrastructure.
Read more »
Philippine Stock Exchange to Acquire Controlling Stake in Philippine Dealing System Holdings Corp.The Philippine Stock Exchange Inc. (PSE) is reallocating P110 million from a 2018 stock rights offering to acquire a controlling stake in the Philippine Dealing System Holdings Corp. (PDSHC). This move follows a series of share purchases by the PSE from other PDSHC stakeholders, aiming to consolidate the country's equities and fixed-income exchanges. The PSE's equity stake in PDSHC currently stands at 55.53 percent.
Read more »
Philippine Stock Exchange Reallocates Funds to Acquire Controlling Stake in Philippine Dealing SystemThe Philippine Stock Exchange Inc. (PSE) is using funds from a 2018 stock rights offering to acquire a controlling stake in the Philippine Dealing System Holdings Corp. (PDSHC). This move consolidates the country's equities and fixed-income exchanges.
Read more »
Philippine Fishermen Sound Alarm Over US-Led Military Exercises in Philippine WatersFilipino fishermen express deep concerns over the environmental and social impacts of joint military exercises conducted by the United States in Philippine waters. They argue that these exercises disrupt their livelihoods, cause psychological trauma, and damage fragile marine ecosystems.
Read more »