SALES of preneed plans were up last year as more clients bought more life products during the period, the Securities and Exchange Commission (SEC) said.
Government data showed that the number of plans sold climbed by 11 percent to 253,678 year on year as life plans surged by 64 percent to 175,336. Education plans suffered a big drop in sales of 59 percent to 10,152, followed by pension plans, which contracted by 34 percent to 7.31 million.
In December alone, the plans sold by preneed firms increased by 25 percent to 24,693 on the back of higher sales from life plans that registered a growth of 45 percent to 18,080 plans. Pension plans were also up 4 percent to 6,206 while education dropped 69 percent.
Month-on-month, however, only pension products suffered an improvement of 22 percent, while education and life dropped 10 percent and 4 percent, respectively.
In peso terms, preneed sales fell by 19 percent to P15.309 billion from a year ago with education plans registering sales of P1.727 billion, 55-percent lower than the previous year. Pension plans dropped by 34 percent to P7.31 billion but life products jumped by 57 percent to P6.271 billion.
The preneed industry is now hit by controversy after several companies shut down while the industry’s trust funds were found to be inadequate to cover the outstanding obligations to the plan holders.
The Philippine Federation of Preneed Plan Companies (PFPPC) recently assured planholders that their trust funds remain intact despite the financial crisis.
PFPPC denied allegations that plan holders’ hard earned money were stolen by preneed companies as their plans’ trust funds incurred huge deficits.
Juan Miguel Vasquez, the federation’s president, said the trust funds are invested in safe instruments like government securities and blue chip equities, and managed by independent bank trustees.
At end-June last year, industry data showed it has P46.83-billion deficit due to rapid drop in earnings from its investments. –Chino S. Leyco, Reporter, Manila Times
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