For many Filipino retirees, pensions are a critical lifeline to aging well.
And if pensions are the only source of income for them, the monthly minimum pension payout of P2,000.00 for private sector workers and P5,000.00 for government retirees is hardly enough to meet basic needs.
There are, of course, those who receive more than the minimum payout — some as high as 24,000.00 for Social Security System (SSS) pensioners, and some even higher, for retirees of the Government Service Insurance System (GSIS).
Recognizing perhaps the need to increase the benefits of its retirees, SSS Vice President for Public Affairs Carlo Villacorta told the Good Life that last September, the SSS increased the loanable amount for pensioners from 200k to 300k.
It also raised the monthly payout for retirement and disability pensioners by 10 percent from September 2025 to September 2027. Survivor pensioners however will only get an additional 5 percent.
The SSS has now 2.5 million retirement pensioners, 1.2 million survivor pensioners, and 104,000 disability pensioners or a total of 3.8 million pensioners, SSS members qualify to receive pensions when they complete the required number of 120 contributions.
Provident Funds
Another innovation instituted by the SSS in 2021 were the mandatory and voluntary provident program otherwise known as the pension booster program to prepare their members for retirement.
According to Villacorta, under the mandatory provident program, a portion of the contributions of SSS members who earn more than 20k goes to a provident fund account that SSS automatically creates for them.
“Pag nag-retire na yang miyembrong yan, ang naipon na kaperahan doon sa mandatory provident fund ay puede niyang i-convert into monthly pension pang-dagdag sa buwanang pension na kanyang tinatanggap sa ilalim ng regular SSS pension program,” he told the Good Life.
He can choose to add this to his pension in the next 5, 10, 15 years, Villacorta said.
The voluntary provident fund program is for SSS members who want to contribute a minimum of P550 which will be deposited in the pension booster account, he says.
“Yun din po ay iipunin ng SSS at i-invest po ng SSS ng buong husay at tiyaga para palaguin at pakitain para pagdating ng inyong retirement, meron kayong regular SSS pension, meron kayong pension na pang-dagdag mula sa mandatory provident fund account, at meron pa kayong pension booster account pangdagdag pa sa regular at mandatory,” says Villacorta.
Economic Security in Old Age
But with Filipinos living longer and many aging unwell, whatever pensions they may be receiving will most likely not be sufficient to tide them over when they are visited by a catastrophic or debilitating illness.
An Asian Development Bank (ADB) study, released in May 2024, points out that “sufficient financial resources for a decent living are a prerequisite to well-being in old age.”
“Poverty and economic deprivation diminish life satisfaction and mental wellness. Financial risk later in life with deteriorating health and loss of wage income. Family transfers are a key source of income for older Asians, supplemented by income from working,” the study points out.
“Going forward, contributory and social pensions are set to play a bigger role in the region to safeguard old-age economic security.”
Villacorta admits that even a pension of 24k may not be enough to cover emergency health expenses.
This is why, he says, institutions like PhilHealth play a critical role in the administration’s whole of government approach in addressing these issues.
Financial preparedness
The ADB study says an “individual is considered financially prepared for old age if income, including from assets available for liquidation, meets consumption needs for the expected duration of retirement.’
This is why it calls on governments to promote financial literacy campaigns to raise awareness and understanding of simple financial concepts to help them make better decisions and become long-term savers.
