The World Bank revealed in a report that assets of the Social Security System (SSS) could be depleted in about 28 years if crucial reforms are not implemented soon. The report entitled “Philippines – Review of the social security system: considerations for strengthening sustainability and coverage,” predicts that the current scheme will experience greater outflows than inflows in 20 years.
The World Bank said the trend will be partly due to the gradual aging of the population. In the next 35 years, the old-age dependency ratio is expected to double to 22.5 percent in 2050 from its 12 percent in 2015. This change in the population ratio will put pressure on working age individuals and the country’s social security system to provide support for the elderly population, the report said.
To remedy the problem, the World Bank suggested that the retirement age be moved to 65 years and beyond to complement the corresponding increase in life expectancy.
The World Bank also suggested the strengthening of the identification system and the initiation of administrative reforms that will put more focus on the informal workers sector to make contributions, monitoring, and receiving payments easier for them. The report said that improving mobile money platforms and access to saving instruments would also help in the collection.
