By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor, BusinessWorld
For many Filipinos, retirement planning is shaped less by financial products and more by societal expectations. The country’s strong family culture has traditionally meant that elderly parents can rely on their children or relatives for support in their old age.
Formal retirement planning often takes a secondary role, with many workers relying primarily on government pensions such as those provided by the Social Security System (SSS) and the Government Service Insurance System (GSIS), supplemented by whatever personal savings they may have put aside during their working years.
“Traditionally, many Filipinos expect their children or extended family to support them in their old age, which reflects a strong family-oriented culture,” said Trust Officers Association of the Philippines (TOAP) Investor Relations & Education Director Patricia Lei S. Alvarillo, who is also the First Vice President and Head of Sales Accounts Department at BDO Unibank’s Trust and Investment Trust.
But that model is slowly changing. Rising costs of living, longer life expectancy, and economic shocks in recent years have pushed many Filipinos to rethink how they are preparing for retirement. Increasingly, workers—especially among the middle class and younger generations—are seeking their own means of financial independence.
“Many Filipinos now want to be financially independent in retirement to avoid being a burden on their children. This represents a cultural shift in individual financial responsibility, especially among middle- and lower-income workers,” noted Ms. Alvarillo.
Indeed, a growing number of Filipinos today are showing a growing confidence in saving and making early financial decisions, partly due to the increasing accessibility of digital banking in the country.
According to a study by the Digital Bank Association of the Philippines (DiBA PH), the country rose to 62 this year from 56 in 2024 in the Financial Health Index, which measures the four key areas of financial well-being—namely, financial literacy, ethics, security, and freedom. This moved the country to the “good” list of the index, from the previous “low”.
Financial confidence among Filipinos has risen along with it, as more Filipinos now report that they have saved for emergencies, and 73% say they have money set aside. Most of the respondents, however, said that their savings would only last up to one month.
Sun Life Asia’s latest Financial Resilience Index echoed similar results, showing a short-term increase in confidence among Filipinos, despite ongoing challenges to long-term planning and resilience. The survey found that 66% of Filipinos feel financially secure right now, up from the previous record of 45%. In addition, confidence in managing monthly finances also increased from 57% to 69%, suggesting improved financial stability in the short term.
Looking longer term, however, confidence has declined, with only 64% feeling they can meet future goals, down from 72%. According to this study, one in three Filipinos say that, if they lose their income or get sick, they will not be able to support themselves for more than three months without foreign aid. This vulnerability is particularly pronounced among young respondents in rural areas, as the population has limited emergency savings and low access to financial instruments.
Safety seems to be the main issue on the minds of Filipinos. A separate survey conducted by Metropolitan Bank & Trust Co. found that 21% of the 1,200 respondents were primarily grateful for building an emergency fund or preparing for future needs. In Metro Manila, 23% of Filipinos say financial stability is their biggest concern.
Ms. Alvarillo said this change in behavior was caused by a major shock like the pandemic, which changed how many Filipinos thought about money, savings, and retirement.
“It served as a financial ‘wake-up call’ for both short-term life decisions and long-term financial planning. Some Filipinos are realizing that they need to keep some liquid assets for emergency purposes,” he said.
Filipino Gen Z in particular approaches money differently than their elders, with habits reshaped by technology, rising costs of living, and exposure to global financial trends.
Organizations like TOAP play an active role in strengthening retirement plans in the country. Trust officers and fiduciaries act as professional managers of clients’ assets, managing pension funds, investment portfolios, and retirement accounts in accordance with strict fiduciary standards.
Their work often involves designing diversified portfolios that include traditional bank deposits and investment instruments such as bonds, equities, and mutual funds, limited to the client’s time horizon and risk tolerance.
These services are especially important in a situation where many workers are realizing that government pension programs such as SSS and GSIS may not be enough on their own to support their retirement needs, as Ms. Alvarillo points out.
“Many Filipinos still have misconceptions about retirement planning, which often leads to inadequate preparation for old age. These misconceptions are often influenced by culture, optimism about future income, or lack of financial planning,” he said.
Trust companies work closely with the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission to strengthen governance structures while modernizing financial services. These efforts include improving the digital onboarding and management of retirement products such as the Personal Equity and Retirement Account (PERA), which allows Filipinos to build tax-advantaged retirement savings through professionally managed investment options.
“The financial information provided by various trusted organizations and the BSP is really helpful in dealing with these gaps,” said Ms. Alvarillo.
As Filipinos increasingly seek financial independence in later life, the trust industry’s role as asset manager and financial educator becomes central to building a strong retirement environment.
This article comes from BusinessWorld In-Depth’s recent special edition with the Trust Officers Association of the Philippines for Trust Awareness Week. To get your free copy, go to https://bworld-x.com/product/free-beyond-today-a-modern-strategy-for-retirement-planning/.
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