Ninety percent of working Filipinos worry about being poor and in need of money upon retirement—this is one of the key findings from a major study on retirement attitudes and expectations in East Asia conducted by The Global Aging Institute (GAI), in partnership with Pru Life UK regional headquarters Prudential Corp. Asia. From Challenge to Opportunity: Wave 2 of the East Asia Retirement Survey1 shows the Philippines to be second only to Vietnam (95 percent) in terms of growing anxiety about retirement prospects. This was followed by Indonesia (83 percent), South Korea (81 percent), Thailand (79 percent), Malaysia (68 percent), Singapore (66 percent), Hong Kong (64 percent), Taiwan (60 percent) and China (50 percent).
Today’s working-age adults, who are more affluent, educated and market-oriented than their parents, are likely to arrive in retirement better prepared than today’s retirees. Yet, most have good reason to worry about their future retirement security. According to the survey, only 68 percent of Filipino workers expect to receive Social Security System or Pag-IBIG Fund benefits when they retire, while just 8 percent expect to receive income from financial assets like insurance or annuity products and stocks, bonds or mutual funds. The majority of Filipino workers surveyed are anxious about exhausting their savings (89 percent), being in poor health and having no one to care for them (88 percent), and being a burden on their children (80 percent) after retiring.
The study also revealed that nearly three-fifths of Filipino retirees surveyed continue to work at least part-time to supplement their income. Meanwhile, dependence on family is very high. Seventy-eight percent of elderly retirees live with their grown children, a larger share than anywhere else surveyed except Vietnam.
The survey reveals that an overwhelming majority of respondents in every market reject the traditional expectation that the family should be primarily responsible for providing for the elderly.
By contrast, different markets have different views about who should take the place of the family in guaranteeing retirement security. In the Philippines 66 percent of respondents believe that the government should be mostly responsible for providing retirement income, while 10 percent believe that the responsibility should fall upon retirees themselves. Just 8 percent think that retirement income should be the responsibility of the family. In South Korea, Singapore, Hong Kong and Taiwan, a majority or plurality of respondents (between 40 percent and 61 percent) feel that retirees themselves should be responsible for their own retirement income. In Malaysia, Indonesia, Vietnam, China and Thailand, a majority or plurality of respondents (between 43 percent and 66 percent) feel that the government should assume the primary role in retirement security.
Although the family’s role in retirement security has already diminished over the years, and most respondents want to see it shrink even further, the lack of viable alternatives to close the retirement security gap is cause for concern. Dr. Richard Jackson, founder and president of GAI, said: “The findings show that retirees in East Asia find themselves at a difficult juncture. Traditional family support networks have been weakening, yet adequate government and market substitutes have not yet been put in place. The result is growing economic vulnerability. The retirement outlook for today’s workers is brighter in most markets, but still highly uncertain. Across East Asia, workers are very anxious about their retirement prospects, but are also very eager to improve them.”