Facing the Aging Wave: Proposed Social Security Reform in the Philippines

Authors

Les Coughran

Abstract

The Philippines's Social Security System is eroding because of demographic changes. These changes have tipped the financial balance, which incremental design changes have failed to restore. The system contains weaknesses that are exacerbated by limited financial transparency and poor asset management. International social security systems, designed to include public defined benefit programs, public hypothetical account programs, publicly mandated defined contribution programs, and/or private sphere components, provide the Philippines with examples of alternate national systems. While each of these components alleviates certain risks, no single component is comprehensive in safeguarding against demographic, economic, or inflationary risks. This Comment asserts that the Philippines should reform its public social security system and adopt a new diversified program. Consistent with the World Bank's recommendations, the Philippines should blend a hypothetical account-based public retirement benefit with a defined contribution retirement program. This diversified program will increase retirement income for a broader range of the population, while not materially increasing the national government's risk exposure. Most importantly, this program will secure the long-term viability of distributing social security benefits.

First Page

403

Recommended Citation

Les Coughran, Comment, Facing the Aging Wave: Proposed Social Security Reform in the Philippines, 12 Pac. Rim L & Pol'y J. 403 (2003).
Available at: https://digitalcommons.law.uw.edu/wilj/vol12/iss2/24