New report suggests married Philippine couples add five to 10 years to retirement planning

Press Release | June 26, 2014

Makati – Manulife Asset Management today issued a report that finds many married couples in Asia, including in the Philippines, are significantly underestimating the length of time they will spend in retirement and, as a result, are likely not accumulating sufficient retirement savings.

The report, entitled Live long and prosper? Retirement and longevity risk, is the fifth in Manulife Asset Management’s Aging Asia series. It provides retirement duration forecasts and assessments of longevity risk, the risk that a retiree will outlive his or her sources of income, for married couples in 10 Asian economies: China, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

Michael Dommermuth, President, International Asset Management, Manulife Asset Management, explained: “We feel that marital status in particular is too often ignored in retirement planning. The vast majority of Filipinos continue to enter retirement as part of a married couple and thus should factor in the likelihood of one partner, usually the wife due to longer life expectancy for women, outliving the other. Not factoring in the potentially significantly longer life expectancy of a partner can increase the potential that they will outlive their retirement savings.”

The report is accompanied by an online tool which individuals can use to “reality check” their assumptions about retirement length and their level of longevity risk.  

Aira Gaspar, CFA, Chief Investment Officer for Manulife Philippines, explained: “The report finds that married couples in the Philippines face average joint retirement of 20.6 years, which represents a generally ‘lower’ degree of longevity risk relative to their peers across Asia. This is primarily due to the fact that the Philippines has a relatively high elderly labor force participation rate and the shortest life expectancy among the 10 markets examined.

“However, the level of longevity risk is in flux in many of the markets as we find a relatively high 66% correlation between a country’s per-capita GDP and its average life expectancy1. Therefore, life expectancy and longevity risk is likely to increase in the Philippines as the country is forecast to see strong economic growth and rising per capita incomes for many years to come2.”

Dommermuth added: “It is important to realize that any given individual has a 50% chance of living longer than the average forecast period. Our research indicates that in the Philippines the chances of outliving retirement savings can be substantially reduced if married couples either delay retirement or factor an additional five to 10 years into their financial planning.”

Policymakers in the region are already taking steps to reduce longevity risk for their citizens. Many governments have raised their official retirement ages and a recent proprietary Manulife survey found that 64% of Filipino respondents are open to such a move. However, the Aging Asia research series has shown that responsibility for retirement income security is increasingly shifting to individuals and that effective deployment of household wealth could reduce the chances of outliving retirement savings by delivering the potential for returns in excess of bank deposit rates.

Gaspar expanded on this: “As a financial service provider, Manulife Philippines is doing its part to help mobilize household wealth and maximize returns potential. For example, we offer a variable life insurance product that employs an active asset allocation strategy to create a diversified portfolio with the potential to deliver a recurring income stream via regular distributions while also providing exposure to the capital appreciation potential of Philippine financial markets. We believe that this strategy can contribute meaningfully to reducing longevity risk as it has the potential to generate higher returns than time deposits or money market funds.”

Manulife Asset Management’s Aging Asia series of reports, related resources and the online retirement duration assessment tool can be accessed at:


[1] Based on per-capita GDP at purchasing power parity (PPP); International Monetary Fund, World Health Organisation, 2011.

[2] IMF World Economic Database, April 2014. 

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