In Asia-Pacific, Filipinos enjoy pension amounts that are closest to their pay before retiring, according to the Organization for Economic Cooperation and Development (OECD).

In its Pensions at a Glance Asia/Pacific 2024 report published on Dec. 6, the OECD said that at 72 percent, the Philippines has the region's highest future gross replacement rate.

The report defines the future gross replacement rate as "the level of pension benefits in retirement from mandatory public and private pension schemes relative to earnings when working," usually computed using the last five years of career salaries.

"For average earners with a full career from age 22, the future gross replacement rate at the normal retirement age averages 49.4 percent for men and 45.3 percent for women in Asian economies," the OECD noted. Retirement among employees in the Philippines starts at age 60.

In the case of full-career Filipino male workers, the replacement rate is 72 percent, also topping the region.

For "high earners" who get paid twice more than the country's wage average, they receive pensions with a replacement rate of 73 percent, exceeding the 59 percent in China and Vietnam.

As for the net pension replacement rate, which, for the OECD, "matters more to individuals, as it reflects their disposable income in retirement in comparison to when working," Philippine pensioners also enjoy more than their regional peers.

"The net replacement rate for workers earning 200 percent of the average is highest in the Philippines," the OECD report said.

It helps that "in Hong Kong, Malaysia, the Philippines, Singapore, Sri Lanka and Thailand, pension income is neither liable for taxes nor social security contributions," the report pointed out.

Filipino retirees' so-called gross pension wealth—which the OECD defines as "relative to individual earnings before retirement, measures the total discounted value of the lifetime flow of all retirement incomes in mandatory pension schemes at retirement age" -- at 10 times is comparable to those in Singapore, Thailand as well as Vietnam.

However, the OECD cited that the Philippines has no valorization rule, wherein such a rate is applied to past earnings taking into account living standard changes between the time that pension rights accrued and when they are claimed.

Also, "at the average-wage level, the highest future effective annual accrual rate of 1.9 percent is in the Philippines," the report added.

Across Asia-Pacific, the report cited that only the Philippines has contribution-based basic and minimum pensions, with up to 56 percent of pensioner-recipients in the country regularly claiming their retirement benefits.

Pension coverage in the country is also among the highest in the region. "Only the Philippines and Singapore along with Hong Kong have coverage above 50 percent for the population measure and over 80 percent for the labor force," the OECD noted, referring to the mandatory Social Security System (SSS) coverage for private-sector workers, which in 2021 had nearly 40.5 million members representing 55.5 percent of the population aged 15 to 65 and 92.4 percent of labor force.

Based on 2024 estimates, life expectancy in the country stood at 77.6 years among men and a higher 80.4 years for women.

Amid population ageing across the region, the OECD flagged the declining fertility rate in the Philippines, which at 1.9 this year from 3.53 in 2004 meant a 46-percent drop during the past two decades—the fastest fall in Asia-Pacific.

"Low fertility rates have wider social and economic consequences. The old-age to working-age ratio will increase sharply, placing additional burdens on the working-age population to finance pay-as-you-go pensions and healthcare for older people. Moreover, the workforce will also age over time and so might be less adaptable to technological change," the OECD explained.

In terms of the demographic old-age to working-age ratio, the report noted that "both Asian economies and OECD countries have seen prolonged increases in life expectancy that most analysts project to continue, implying an increasing number of older people and most likely of pensioners, too."

The Philippines and Pakistan nonetheless have relatively young populations, with old-age to working-age demographic ratios of just 9.7 and 8.8, respectively, compared to Hong Kong's 36, Thailand's 24, China's 23.1, Sri Lanka's 20.9, and other Asia-Pacific nations' above 10.

"In the second half of this century both of these countries are expected to remain considerably younger than the other economies, at 12.5 in Pakistan and 19.9 in the Philippines," the OECD said.