Aging population, pensions, perdition

The government has got to be serious about the short shadow cast by the impending aging population it has to face in the immediate future. There’s a need to get out of the binary that, as the elderly population increases, so must pensions and healthcare subsidies. There’s no U-turn here, no counterflow, no changing lanes as the sad specter of an imminent “fiscal collapse” approaches the dead end.

The government should realize that there’s no turning back the hands of time for the fast-changing age demographic, not only in the Philippines but in most Southeast Asian countries. The question would then be: how prepared is the government to absorb its impact upon the national economy when that point comes? Would it have run out of money from the rather senseless dole-outs that are called by many names and boldly introduced by the ruling political elites?

It’s time to press the panic button to the clear and present danger of the onset of an aging population, thereby depleting our relatively young population, the sector that is the main driver of economic growth and prosperity. If the government lacks the agency to anticipate, foresee, and plan ahead before an imminent fiscal crisis attacks, then we probably deserve the government we have.

The S&P Report is cause for much policy concern and economic managers and policymakers must get out of this Catch-22, lest we succumb to the curse that should have been transformed into a gift instead. Neither should it be made a convenient scapegoat for government’s inability to meet the targeted annual growth rate. Cavalier nonchalance and projecting unfounded confidence that everything is under control will be standing on the wrong side of history.

Are there not active policies on aging already drawn up or about to be put in place? For one, there ought to be grave doubts as to how government can strengthen health and social policies toward improving the prospect of active and healthy aging given how it embargoed so much in billions of pesos of mandatory support to PhilHealth which is the main guardian and steward of our universal health care delivery.

Who was the chief author of the fiscal architecture of ayuda in all its mutant variants that financially irrigated the barren political fields to give the working class a tiny “bundle of joy” as if it were manna from heaven? What evil genius thought of consolidating all unused savings of government agencies to allow influential political actor(s) to re-appropriate them to serve selfish, vested, parochial interests?

How far have we gone? Given any policy issue, how do we conduct research in the case of an aging population vis-a-vis accruing pensions for the growing number of seniors and retirees? We always proceed as if cross-sectional data were the best methodology as the basis for policy when, in fact, we should have done longitudinal or other more appropriate methods of data banking.

At the very least, the matter of an aging population requires that we track it over time, not just for a single moment, a single period. There’s no use constantly ignoring how aging lowers income and productivity growth, and worse, if it does, it does so substantially. Thus, complacency or a nonchalant attitude invites a scenario beyond government’s capacity to handle or navigate.

The sound alone of hundreds of billions being spent for ayuda in its multiple acronyms (i.e. AICS/AKAP/ECT/FFP) is entirely unsettling, even disconcerting. No emerging economy in its right mind should pretend to be a benevolent welfare state. It’s doing it the wrong way for all the right reasons. The earlier years of so-called 4Ps funds were actually loans from the World Bank to finance a government program, purportedly to graduate its beneficiaries from poverty, given that the poverty incidence in the country had taken hold.

If the working-age population falls and elderly dependency rises, we might as well entertain a doomsday scenario of growth hitting zero when the workforce begins to shrink.