MANILA, Philippines — The Swiss government has given a $210,000 grant to five developing countries, including the Philippines, to help improve these states’ pension systems.
The grant, which also covers China, India, Indonesia and Vietnam, will be administered by the Asian Development Bank (ADB), according to the bank’s website.
“The overall goal of the assistance is to support capacity building in the pension industries of the chosen developing member-countries,” said Daniel Wiedmer, investment specialist of ADB’s private sector operations department.
The initiative will focus on “enhancing investment performance and improving standards in managing assets,” added Wiedmer.
A study by the United Nations Economic and Social Commission for Asia and the Pacific in 2002 showed that the proportion of the population aged 65 and older in the region is expected to more than double between 1995 and 2050.
Asia is projected to account for at least 58 percent of world’s population aged 60 and older by 2050.
Declining birth rates mean fewer offspring to provide direct support to parents who rely on them for care in their old age. Fewer children will also result in a smaller workforce generating lower tax revenues, at a time when the introduction of social security schemes may be critically needed.
Pension systems in most developing member-countries still have limited coverage and rigid payment terms, according to the ADB.
As a result, many systems suffer from high rates of payment evasion and low participation. Many public pension systems in the region have suffered significant liabilities and face serious future funding problems, made worse by the Asian financial crisis in the late 90s.
ADB will help address the problem in conjunction with the Association for Sustainable & Responsible Investment in Asia.