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Philippine lawmakers pass bill to allow civil servants to retire at 56

Currently, retirement is compulsory at 65 years old
By Goh Thean Eu   
February 15, 2023

The Philippines' House of Representatives has passed a bill to lower the early retirement age for civil servants by four years, a move that is likely to put more pressure on the civil service pension fund.

The compulsory retirement age for civil servants in the Philippines is 65 years. They currently have the option to take early retirement at 60.

The new law will allow civil servants to exercise that option when they turn 56, putting it on par with the mandatory retirement age for military and police personnel, according to a statement posted on the website of the House of Representatives recently.

House Speaker Ferdinand Martin Romualdez says it will benefit more than one million civil servants.

“They can opt to quit working, receive their benefits, do other activities, and enjoy life in retirement with their loved ones even before they become senior citizens. It’s surely more fun to live life without work-related stress,” he says in the statement.

But a fund manager at a Philippine asset management company worries that the move will put added pressure on the Government Service Insurance System (GSIS) to ensure its long-term sustainability. GSIS manages the retirement savings of civil servants.

“GSIS would need to relook its strategic asset allocation to ensure that its return can now meet the needs of the rising number of retirees,” the Manila-based fund manager tells Asia Asset Management, speaking on condition of anonymity.

According to Romualdez, the lawmakers who drafted the legislation that was passed in the House of Representatives are of the view that “Filipinos need more rest so they could live longer, since their life span is shorter than other nationals. There should be a happy balance between working and retiring”.

A World Bank report last year puts life expectancy in the Philippines at 72.12 years, lower than Southeast Asian peers Vietnam, Malaysia, Thailand and Singapore, where the figure ranges from 75.94 to 83.74 years.