Only 20% of seniors covered by pension
As estimated 80 percent of Filipinos nearing retirement age are financially unprepared for the financial cost of living beyond their employment years, more so with the risks of the sharp economic downturn brought about by once-in-a-lifetime events like the ongoing coronavirus pandemic.
Thus said the head of the Bangko Sentrtal ng Pilipinas (BSP) who urged private sector stakeholders to work closely with public sector planners to improve the country’s personal investment sector, which continues to have one of the lowest participation rates among citizens in the region.
“The harsh reality is that eight out of 10 Filipinos aged 60 and above, and in many cases retirees, do not receive sufficient pension to fully cover their living expenses,” BSP Gov. Benjamin Diokno said in a speech delivered online during an investment briefing hosted by Prulife UK.
“Many Filipinos perceive investing to be costly and have yet to realize its value as an additional income source,” he said, adding that the overall investment rate remains low, having grown by only 2 percent from 23 percent to 25 percent of the population between 2017 and 2019.
According to the Philippine Statistics Authority, there are 7.6 million Filipinos aged 60 and above, of which only 20 percent are covered by either the Social Security System or the Government Service Insurance System.
The central bank has promoted a slew of policies meant to improve financial inclusion among Filipinos as a first step and eventually progress to educating more citizens about the benefits of of investing going forward.
“With policies, regulations and digital infrastructures in place, a wider range of financial products and services can be made more accessible to a greater number of Filipinos,” Diokno said. “Aside from deposit accounts, loans and payment services, affordable retail investment products should be among a regular Filipino’s arsenal of financial tools.”
The central bank chief noted that investments provide people with the means to enhance their financial health as well as to protect their welfare against economic risks and sudden downturns such as this ongoing pandemic.
(source: business inquirer)