By Roderick L. Abad
THE Philippines should prepare now for the expected surge of foreign retirees in the country, as the global population is seen to explode in the next 15 years.
Jones Lang Lasalle (JLL) Regional Director Lindsay Orr said that the number of older people in less-developed countries is projected to increase by 140 percent by 2030, as those in more-developed nations will rise by 51 percent.
Orr said it will open up more growth chances not only for the local retirement industry, but also for the real-estate sector.
“If you look at the areas that would need to evolve and develop—health care, financial planning and retirement communities—in the middle of it all are the opportunities that will open up in the particular [retiring] marketplace [which are] quite significant. And, I think, it’s certainly a very upcoming sector that will be going to have an impact on the overall real-estate market here in the
Philippines,” he stressed.
Seeing this trend, JLL International Director David T. Leechiu encourages both the government and the private sector to make the country’s infrastructure ready as early as five to 10 years from today.
“So we have to prepare by establishing these master-planned communities that will not only cater to mallgoers [or] resortgoers, but also to the retirement market,” he said.
Data from JLL as of July 2013 reveal that Asia is the region with the highest number of people aged 65 and up at 304 million, with China comprising 39 percent or 120 million.
At present, Japan has the highest average of age at 45, followed by Hong Kong, 43; Germany, 40; Singapore, 40; South Korea, 39; the United Kingdom, 37; China, 36; the United States, 35; Thailand, 34; United Arab Emirates, 30.2; Indonesia, 28; India, 26; and the Philippines, 23.
Apart from having the youngest population in the group, the latter’s advantage from others, especially to its neighbors in the region, is that it is the third nation with the lowest cost of living within Southeast Asia, next only to Thailand and Malaysia.
In addition, its Special Resident Retiree’s Visa allows members to retire and live here for as long as they want.
As of 2013, 30 percent of the Philippine retirement-visa enrollees are Chinese, followed by the Koreans at 22 percent; Taiwanese, 13 percent; Japanese, 9 percent; Americans, 5 percent; British and Indians, 3 percent.
“Depending on your age, you deposit a certain amount of money with the Philippine Retirement Authority [PRA], have it held in their bank for about six months, and then you can take it out. For as long as you’re invested in the country, it doesn’t have to stay in a PRA-nominated bank, [but you can also invest it in] a condominium or a house or whatever you want,” Orr said.
Being included in Forbes magazine’s “20 Best Foreign Retirement Havens for 2015,” this island-nation offers various top retirement destinations, such as Baguio, Cebu, Clark, Davao, Dumaguete, Subic and Tagaytay. Makati City is the first choice for alien retirees in Metro Manila.
While the entire Filipino business community has been already seeing and discussing the potential of the retirement industry in the near future, Leechiu cited that it still has not taken off because the global market remains very small at present.
It’s small enough that the economies of those countries—Japan, Europe and the US—their health-care systems can still afford to support the aged today,” he said.
But the Philippines, he suggested, should now take advantage of the foreseen growth in the aging population worldwide.
“To design a hotel or a hospital will take at least one year. To get the [necessary] permits, that’s another three to six months. Then you construct, which will take three years. So before you know it, you would have easily eaten up five years into this process,” he said, while noting that there will be around 400 million aged people in Asia alone in the next five to six years.
So how many economies or families can support the looming burst in aging population?
He estimated that between five and eight years from now, there will be countries getting crushed by the pressure of this global aging market.
“But today, everyone is taking it for granted,” he said.
Given that the cost of health care in mature markets is more higher than in emerging economies like the Philippines, yet the quality is almost the same, he expects that this will favor the country.
“That’s what going to keep driving people to come to the Philippines to retire here—and possibly to pass away here,” he said.
“We have all the facilities here, the technology and manpower. So very soon, we make the clients themselves to come here.”