A healthy lifestyle and good physical well-being are the essential elements for positive financial and mental well-being among consumers in the Philippines as they plan for longer lifespans, and lengthier and more comfortable retirements, according to new research by Manulife. Yet financial confidence among Filipinos is low amid concerns about inflation, particularly rising healthcare costs.
Manulife’s new Asia Care Survey 2024 drew on responses from 1,050 consumers in the Philippines. It launched Manulife’s MyFuture Readiness Index, which measures how consumers view their current and future physical, mental, and financial well-being. On a scale of 1 to 100, the index shows their desired readiness level to be 91, which is above the regional average, but the expected level to be 79, suggesting a lack of confidence about the future.
According to the Filipinos surveyed, the top five challenges impacting confidence in their future well-being are: rising healthcare costs (82%), inflation/rising costs of living (81%), economic slowdown/recession (78%), increasing interest rates (78%) and health trending down (73%).
To help save and prepare for their envisioned future, including for greater longevity, retirement and unexpected medical needs, the Filipinos surveyed highlighted having a passive income after retirement (43%), having sufficient savings for a rainy day (39%), financial freedom in retirement (32%) and having enough savings for healthcare needs (31%) as their main financial goals.
“The survey reveals a lot of anxiety around economic volatility, healthcare-related expenses and uncertainty, which dampens the optimism of many Filipinos in achieving high-quality well-being in the future,” said Rahul Hora, President and CEO, Manulife Philippines. “But there are ways to address these concerns so they are future-proofed. Significant of these is the value of financial advice and guidance that can help them assess and bring their goals closer to fruition, mitigate risks, and find the right products that provide stronger health and life protection, as well as investment and retirement solutions.”
Healthcare costs perceived to be too expensive
In the survey, 82% cited rising healthcare costs as a top threat– a percentage that rises to 86% among 50 to 60-year-olds. Their concerns are understandable given that 44.7% of health expenses in the Philippines are out-of-pocket, in total reaching US$9 billion in 2022. It is an amount that Manulife expects to reach US$13 billion by 2028 and account for 38% of their overall medical expenses.
“We see in the Philippines a realization of longer life expectancy and people rightly want to enjoy good health for a longer time. Healthcare costs trump inflation as their main concern for the future, with women being in general more concerned than men,” said Hora. “To navigate this, there is a need for effective financial planning. It is fair to expect medical costs to rise faster than inflation given aging populations and increased pressure on healthcare services, but our survey suggests that perceptions on the extent of such rises are well above actuality.”
The survey shows that over the past 12 months, the perception of the Filipinos surveyed on healthcare cost inflation was 32%, the highest in the region (average 23%) and around three times the actual rate[2]. Most respondents (61%) are concerned about the rises in cost of prescriptions, while 59% of them are worried about hospitalization, and 45% about preventive healthcare. Curiously, elderly care (16%) is much lower.
The potential illnesses that worry people in the Philippines the most are heart disease (46%), the leading cause of death in the country, diabetes (42%), stroke (34%) and cancer (31%). With the broader concerns about their physical well-being and rising medical costs, 78% of the respondents agree that increasing insurance coverage and benefits for inflation is a crucial part of planning for my future financial well-being.
The findings show a sizeable segment adopting a strategy of using less expensive healthcare (41%) services and medicines (53%), well above the regional average of 31% and 29% respectively. According to the survey, this would typically mean using government health services and generic drugs, rather than going private. Alongside that, about three quarters are exercising more or improving their diet.
Children no longer viewed as alternative to a pension
Across all the markets covered in Asia, 7 out of 10 of those surveyed said they feel health benefits and coverage from their employers are not enough. In the Philippines, it was a little higher at 76%. As things stand, 78% of the Filipinos surveyed feel a need to top up retirement and pension benefits they receive from their employers to boost their future financial well-being. In addition, 58% are looking to delay retirement because of their financial responsibility for their family.
Traditionally in Asia and elsewhere in the world, an alternative to insurance and a pension for old age would be having children. But that is not the case now in the Philippines where 58% of the Filipinos surveyed disagree that children are great investments because they provide support in old age. Only Japan had a higher rating at 70%. In the markets covered, half those surveyed said they do not plan to have kids. The average number of children wanted by Asians is 1.6. In the Philippines, the preferred number is 1.8.
“We encourage more Filipinos to consider ways to increase their health protection. At the same time, insurers have an important role in helping them do that, including changing perceptions on health costs and focusing on specific individual needs. There’s a need also for greater financial literacy,” said Hora. “Doing that will enable everyone to focus on ways to effectively address the challenges on health protection and long-term savings that exist.”
To help address the unique needs of Filipinos when it comes to their health, well-being and finances, Manulife Philippines offers a suite of innovative insurance and investment solutions that can help them financially prepare for the future, while ensuring life and health protection coverage in case of the unexpected.
About the Manulife Asia Care Survey 2024
In its fifth year running, the latest Manulife Asia Care Survey was conducted in January and February 2024 via online self-completed questionnaires in eight markets. A total of 8,400 individuals, evenly split between men and women, aged 25 to 60 years old were surveyed: mainland China (1,052), Hong Kong (1,052), Indonesia (1,063), Japan (1,000), Malaysia (1,038), Philippines (1,050), Singapore (1,038) and Vietnam (1,107). Each of those surveyed
