Philippines sees opportunity in wealthy neighbours’ golden years

Noriko Iwamoto, a Japanese widow and senior citizen, poses outside her restaurant at a residential district in suburban Quezon city, Metro Manila, Photo by Erik De Castro/REUTERS

Noriko Iwamoto, a Japanese widow and senior citizen, poses outside her restaurant at a residential district in suburban Quezon city, Metro Manila, Photo by Erik De Castro/REUTERS

via channelnewsasia.com – Japanese housewife Noriko Iwamoto is clear on the reasons that led her to retire in the tropical Philippines, leaving behind a stagnant economy, deflation and a rigid Japanese workforce: it’s cheap, and you can work.

“I was looking forward to living somewhere outside Japan,” said Iwamoto, 62, a widow and one-time vet from the port city of Nagoya, who now runs a small tea shop in Manila. “There are no jobs in Japan, but I still want to work.”

The Philippines is tapping wealthy north Asian retirees who want sunshine, low prices and a refuge from record low interest rates – wooing them with soft wealth barriers and an initial age hurdle of just 35.

A handful of other Southeast Asian neighbours are doing the same, but the likes of Thailand and Malaysia demand retirees have higher pensions, fatter bank balances and are at least 50 years of age.

Though numbers are small, Filipino authorities say arrivals from China, Korea, Taiwan and Japan are the most numerous, escaping economies that have eaten into their retirement savings and now offer little opportunity to top up those pension pots.

Japan, for one, has 34.6 million people aged 65 or older and a public debt burden that means many already choose to retire abroad to get cheaper health care and a better quality of life.

At current levels – 42,511 foreigners are enrolled into the retirement plan – the number of arrivals is small, in a country of almost 100 million. Economist Euben Paracuelles at Nomura in Singapore said the business would need to be part of broader reforms to encourage foreign investment and tourism, in order to provide a significant boost to the economy.

But the Philippine Retirement Authority (PRA), which is hiring staff to expand, wants to more than double the number of foreign retirees to 100,000 by 2020.

“Right now, it’s the ambulatory and fun-loving retirees that we are targeting,” PRA General Manager Valentino Cabansag said. Already, in the past four years, a third of foreign retirees in the Philippines belonged to the still-active 40 to 49-year old bracket, PRA data showed.

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