A survey by Manulife reveals that a healthy lifestyle and physical well-being are crucial for financial and mental well-being in the Philippines. However, economic confidence among Filipinos is low due to concerns about rising healthcare costs and medical inflation. The Asia Care Survey 2024, based on responses from 1,050 consumers, showed a desired readiness level of 91, above the regional average, but an expected level of 79, indicating a lack of confidence in 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 primary 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 of 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.”
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, 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 generally more concerned than men,” said Hora. “To navigate this, there is a need for effective financial planning. Given aging populations and increased pressure on healthcare services, it is fair to expect medical costs to rise faster than inflation. Still, 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. Most respondents (61%) are concerned about the rises in the 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 less expensive healthcare (41%) services and medicines (53%), well above the regional average of 31% and 29%, respectively. According to the survey, this means using government health services and generic drugs rather than going private. Alongside that, about three-quarters are exercising more or improving their diet.
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.
