Filipinos least prepared for retirement, study shows

by Doris Dumlao
from The Philippine Daily Inquirer

MANILA, Philippines — Filipinos start thinking about retirement early but still end up the least prepared when they actually reach old age, prompting most to seek work past retirement, according to a global retirement study conducted by Paris-based AXA.

The AXA Retirement Scope covering 26 countries, which included the Philippines for the first time, also showed that Filipinos have been relying too much on government pension for old-age income.

AXA’s 4th annual global research looks at the retirement beliefs, practices, and attitudes of retirees and those who are still currently working. The Philippine survey was conducted in key cities across the country, with a total of 600 respondents equally divided into two groups: those aged 25-49 and still currently working; and retirees aged 50-75.

In a press briefing on the survey results on Tuesday, AXA Philippines reported that over 95 percent of total respondents believed that the government should be the primary source of retirement, much higher than the 80 percent global average.

Eighty percent thought their employers should also provide for their retirement needs, likewise much higher compared to the global average of around 60 percent. Only 50 percent believed in preparing for their retirement themselves, a mindset much different elsewhere in the world where an average of 70 percent believed in individual retirement planning.

“This is one of the most alarming findings in the AXA Retirement Scope,” said AXA Philippines Andrew Alcid.

“We have to help the average Filipino take personal control of their retirement future. We should realize that planning for a good tomorrow, a golden retirement, begins today,” he stressed.

The research also showed that only 34 percent of Filipinos secured their retirement income from individual pension plans.

Among those still working, only 41 percent have been planning for retirement, one of the lowest rates in the world. Moreover, 83 percent of working Filipinos surveyed intended to work into their retirement years, much higher than the global average of 54 percent, and the highest among all 26 countries surveyed.

Similarly, Filipinos rank highest in terms of percentage of actual retirees who hold a paid job with 38 percent, as opposed to the 17 percent global survey average.

Dr. Edna Franco, an anthropologist from the Ateneo de Manila University, said Filipinos’ tendency to seek work past retirement age might not be due to financial considerations or need.

“Work is associated with being responsible so it’s possible that loss of work will be associated with loss of identity and loss of confidence,” Franco said.

But she added that providing for the family has always been part of the Filipino culture.

Still, Franco said a new generation of Filipinos concerned with their own welfare has been emerging. She said this generation would not want to be a burden to their kin in their old age.

But while Filipinos would most likely work well past their retirement age than others, the AXA study indicated that they thought of retirement earlier than most. The average Filipino thinks about retirement at the age of 28 years old, relatively young compared to 33 years old in the global average.

“In summary, what the AXA Retirement Scope shows is that Filipinos are generally not ready for retirement,” Alcid said.

“They think about retirement early in life but do not necessarily have the drive or the means to prepare for it. Hence, Filipinos end up working late in life as a means to fend for themselves,” Alcid said.

Filipinos ranked lower than most Asians in perceiving that their lives during retirement were or would be better than those of their parents. But the ranking improved when they assessed their children’s retirement in comparison to theirs.

The survey also showed that adult children also thought of various ways of support for their parents. However, emotional support took priority over material and financial support among most Filipinos.

About 76 percent of those still working thought they should support their parents financially while 93 percent thought of support by material means other than financial.

IMF, OECD hit alarm buttons for crisis-hit global financial system

by Agence France Presse

PARIS, March 17, 2008 (AFP) – The IMF and OECD, two top world economy forecasters, struck alarmist notes Monday about crisis and threatening stagflation in the financial system and the need for measures to shore it up as markets sent distress signals. Only hours after the US Federal Reserve took emergency weekend action to keep the US financial system afloat with cash, the head of the IMF warned that the world economy was being hit by an “important slowdown.”

Consequently, IMF growth forecasts would be cut further because of the crisis. “The downside risks have materialised.” “Obviously the financial market crisis is now more serious and more global than a week ago,” Dominique Strauss-Kahn said, warning that there was a “risk of (it) worsening.” The crisis would be long, would hit hard and spread to emerging economies, he predicted.

So far, central banks had managed problems of liquidity in the financial system well and he said he had “no reason to believe they won’t be able to” in coming weeks. “At this time, the priority for European governments should be containing the economic damage from the financial market crisis,” he told a joint conference with the OECD. “This is difficult because we are in an economic environment where inflation and recession are both potential problems.”

And the head of the Organisation for Economic Cooperation and Development said that financial authorities had to send signals that they were ready to do everything needed to shore up the financial system and avoid systemic risks.

OECD secretary general Angel Gurria said the priority had to be stability of the system: “In the short term (they) have to send out a signal” such as the rescues of the British Northern Rock bank and of US investment bank Bear Stearns at the weekend.

As they spoke at an IMF-OECD conference on structural reforms of European economies, the dollar slumped to another record low point against the euro, shares fell sharply around the world, the price of oil rose to close to 112 dollars and gold remaind near record levels.

NTT Smarttrade director Takashi Kudo, analysing emergency action by the Federal Reserve including a cut in a key interest rate late on Sunday, said: “Investors seem to have taken these moves as evidence of the deepening of the credit crisis.” However, the German government sought to reassure, saying: “There is no indication of further charges for the German financial market.”

Strauss-Kahn insisted that the crisis only highlighted the need for structural reforms in European economies to increase their competitiveness and productivity so that they could generate the growth needed to sustain the European model of justice and dignity.

His reference to inflation and recession revives talk of possible stagflation. This is a combination of rising prices, which forces central banks to keep short-term interest rates high, and slowing growth to which they would normally respond by easing short-term rates.

Analysts have warned that stagflation could become a problem again as the fallout from the US housing market collapse hits the US economy and sparks a flight into commodities such as gold and oil, which in turn forces up inflation. Over the weekend, the US Federal Reserve announced measures to improve liquidity and helped the bailout of Bear Stearns, the fifth-biggest US investment bank that had come close to failure on Friday.

Strauss-Kahn argued that “it may also be that a sense of crisis can help mobilise support for reforms.” He said: “This may seem like a strange time to be holding a conference on structural reform. We are in the middle of a financial crisis which will have significant implications for many countries.”

But reform could have a big bearing on how Europe emerged from the crisis so “that we can achieve a balance between economic prosperity, social justice and the environment.” He said: “In an economic environment such as this, governments and citizens should also be interested in reforms that can promote growth without inflationary risks. That is the kind of labour and product market reforms that we are talking about at this conference.”

Europe had to compete successfully in world markets and achieve high growth, which meant labour markets had to focus on encouraging new jobs rather than on “only protecting old ones,” with an accompanying shift on social safety nets.

Pinoys waste P22 M worth of rice every day – study

from The Philippine Star

BAGUIO CITY – Filipinos are big “rice wasters.”

The National Food Authority (NFA) said at least 25,000 sacks of rice amounting to about P22 million are wasted daily.

Studies by the Bureau of Agricultural Statistics (BAS) and the Food and Nutrition Research Institute (FNRI) showed that every Filipino wastes 14 grams or one spoon of rice everyday.

At that rate, 88 million Filipinos would throw away 1.232 trillion grams or 1.2 million tons of the staple.

At the launching of the Department of Agriculture–NFA Rice Conservation Program in Bontoc, Mountain Province, Celedonia Mendoza of the NFA-Mountain Province said that at the rate Filipinos waste rice, conserving the staple food would be an important step in reducing the government’s rice importation from 1.87 metric tons to 1.17 metric tons.

Mendoza explained that based on studies by the BAS and the FNRI, the wasted rice, if conserved, would feed about 3.4 million people and save them from going hungry.

“This would minimize government rice importation and partly solve hunger prevailing in some parts of the country,” said Mendoza.

She added that because of this, the government has launched a rice conservation program and a nationwide advocacy campaign to teach Filipinos the value of conserving rice.

In Mountain Province, the NFA contributes 700 sacks of rice everyday or 50 percent of the province’s daily consumption by directly distributing it to school children through the Food for School Program of the Department of Education.

Mountain Province, a highly deficient area in terms of rice, depends on NFA for half of its rice demand of 1,440 sacks daily, Mendoza said.

The NFA official cited the need to make everyone conserve rice as the population grows and rice production remains the same.

“Every rice consumer should conserve rice, starting from buying, storing, cooking, and eating,” Mendoza said.

She advised Filipinos to refrain from using the vital food as animal fodder.

She also urged consumers to use brown rice as it is more nutritious and has higher amount of fiber that fights certain diseases.

– Artemio Dumlao

Religious leaders most trusted, politicians least trusted, says study

by Ruelle Albert Castro
from Malaya

FILIPINOS trust their religious leaders more than politicians and would probably elect them.

The latest Gallup International survey on Filipinos’ perception towards leaders in their country, dubbed “Voice of the People,” showed that politicians rank low in the trust spectrum, together with trade unionists, in the survey among 1,000 Filipinos between October and December last year.

Given the choice on who to trust most among a set of pre-chosen individuals, Filipinos opted to put their biggest trust on religious leaders who gained a trust rating of 58 percent.

Priests, nuns, pastors and the like were followed by journalists who gained a trust rating of 43 percent. Teachers were third with 40 percent, while business leaders and the military and police both had a trust rating of 14 percent. Politicians had 11 percent and trade unionists got 7 percent.

Asked on who they would like to give more power, again priests rated 50 percent, followed by journalists with 34 percent. Teachers and lawyers followed with 32 percent and 28 percent, respectively, while politicians got 21 percent. Military and police leaders and business leaders were also at the low end with 18 percent and 17 percent respectively.

Sports and film stars got 7 percent and 4 percent, respectively. Trade unionists got 8 percent vote.

Asked to rate politicians in terms of performance, 65 percent of those surveyed said their political leaders were dishonest; 61 percent believed they were too sensitive to public opinion; 70 percent believed that they responded to pressure from people more powerful than them; 69 percent believed they had too much power and responsibility; and 49 percent believed they behaved unethically.

Thirty-nine percent believed politicians were not capable and competent.

The survey was commissioned by the World Economic Forum which will hold a meeting in Davos, Switzerland, from January 23 to 27.

Filipinos have low financial IQ, says Citibank

from The Manila Times

FILIPINOS are not financially savvy enough to help them tide over rough times and plan for a comfortable retirement, a survey by Citibank N.A. showed.

In an online survey conducted in October 2007, Filipino respondents garnered a Citi Fin-Q—average of 47.8 points out of a possible 100. Citi Fin-Q is a Citibank measure of financial quotient or intelligence.

Majority or 62 percent of the 400 respondents scored less than 50. The survey also showed that if the respondents lose their jobs the next day, their current savings level on the average would last no more than nine weeks before they run out of money, regardless of their income level.

The survey, which has a margin of error of plus or minus 5 percent, was conducted to understand the consumers’ attitudes and behavior related to their financial well-being. Thirty questions were fielded, 11 of which were aimed at determining the financial quotient.

Abigail Limqueco-Chan, Citibank vice-president for marketing, said about two thirds of the respondents were below the age of 40, almost all of whom have bank accounts, while more than half hold major credit cards not necessarily issued by Citibank.

Citibank also found that majority of the respondents, especially the younger ones above 18 years old, seem to hold a positive disposition toward their quality of life and financial future since they don’t have many financial responsibilities.

However, “the reality is many don’t seem financially secure” as more than six out of 10 respondents are not confident that their savings will enable them to meet their financial commitments upon retirement, the bank said.

– Likha C. Cuevas-Miel