FILIPINO CONSUMERS’ financial confidence is being dragged down by concerns over rising healthcare costs, a study by Manulife Financial Corp. showed.
Manulife’s Asia Care Survey 2024 showed concerns about elevated inflation and, in particular, high healthcare-related expenses, has caused Filipinos to have low financial confidence, The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines) said in a statement on Monday.
The survey was conducted online in January and February and covered a total of 8,400 individuals aged 25 to 60 years old in eight markets: the Philippines (1,050), mainland China (1,052), Hong Kong (1,052), Indonesia (1,063), Japan (1,000), Malaysia (1,038), Singapore (1,038) and Vietnam (1,107).
“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,” Manulife Philippines President and Chief Executive Officer Rahul Hora said.
“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,” he added.
The survey showed consumers’ financial confidence via Manulife’s MyFuture Readiness Index, which measures on a scale of 1 to 100 how individuals view their desired versus expected physical, mental and financial well-being over a 10-year period.
The study showed Filipinos’ desired physical, mental and financial readiness to be at 91 out of 100, which Manulife said was above the regional average. However, their expected overall readiness level stood at just 79 of 100.
“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%),” Manulife Philippines said.
High healthcare costs was the top concern of Filipinos as 44.7% of health expenses in the Philippines are out-of-pocket, it noted, with the total reaching $9 billion in 2022 and expected to reach $13 billion by 2028.
Meanwhile, over the past year, Filipinos surveyed showed their perceived healthcare cost inflation was at 32%, the highest in the region and above the regional average of 23%. This was also around thrice the actual rate, the insurer said.
“Most respondents (61%) are concerned about the rises in cost of prescriptions, while 59% of them are worried about hospitalization, and 45% about preventive healthcare. Curiously, elderly care (16%) is much lower,” Manulife Philippines said.
Meanwhile, heart disease topped the list of potential illnesses Filipinos worry about as the leading cause of death at 46%, followed by 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,” Manulife Philippines said. “The findings show a sizeable segment adopting a strategy of using less expensive healthcare (41%) services and medicines (53%), well above the regional average of 31% and 29% respectively. According to the survey, this would typically mean using government health services and generic drugs, rather than going private. Alongside that, about three quarters are exercising more or improving their diet.”
Some 76% of Filipinos surveyed also felt health benefits and coverage from their employers are not enough, with 78% saying they need to top up the retirement and pension benefits they receive from their employers and 58% looking to delay retirement to support their families.
Filipino respondents said having a passive income after retirement (43%) is their top financial goal to be prepared for the future, Manulife Philippines said. This was followed by having sufficient savings for a rainy day (39%), financial freedom in retirement (32%), and having enough savings for healthcare needs (31%).
“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,” Mr. Hora said.
“Doing that will enable everyone to focus on ways to effectively address the challenges on health protection and long-term savings that exist,” he added. — A.M.C. Sy
