Financial dynamics in AFPs: Exploring the relationships between active members and financial ratios (2014-2022)

Abstract

This research set out to closely examine the financial information of the Pension Fund Administrators (AFPs) with the central objective of understanding the relationship between the number of active members and various financial ratios during the 2014-2022 period. Using the statistical method of Pearson’s correlation, as well as a detailed analysis of active members, net income and equity of the AFPs, diverse relationships between the number of active members and financial indicators were revealed. The results also showed significant variability in the growth and decline of active members, net income and equity in each AFP. In conclusion, few notable relationships, both positive and negative, were observed between the number of active members and various financial indicators, such as liquidity, solvency, management and profitability ratios. This study provides a comprehensive view of the financial dynamics in the AFPs, contributing to a deeper understanding of the complex interaction between active membership and the financial health of these entities.