PERA contributions reach P265-M

Contributions to the voluntary savings program Personal Equity and Retirement Account (PERA) amounted to P265.5 million as of end-February, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.

About 71 percent of PERA contributors are employees while 19 percent are overseas Filipinos and 13 percent are locally self-employed individuals. Since the BSP launched the digital PERA in September 2020, the number of contributors increased from 1,684 to 4,379.


“We expect the growth to continue as the economy recovers from the pandemic,” said Diokno on Thursday, March 17, during his regular virtual press chat.

However, Diokno said his earlier pronouncement of targeting to get five million with PERA by 2025 is under review, given that there are less than 5,000 to date.

“The five million target represents around 10 percent of working Filipinos here and abroad. As the economy recovers from the pandemic, we expect the number of PERA contributors to continue to grow. In any case, we recognize the current challenges that may prolong the achievement of our goal and we will reassess the targets after consultations with the industry, partner agencies and other stakeholders,” said Diokno.

The digitalization of PERA has brought more overseas Filipinos as contributors since 2020. PERA contributions grew from P140.8 million in 2020 to P265.5 million so far this year.

“Digital PERA has significantly reduced processing time and transaction cost. Account opening is simpler as only a valid ID and tax identification number are required to open an account,” said Diokno.

The BSP chief said they have accredited five additional PERA unit investment trust funds (UITFs) which will soon be in the market, on top of the existing 12 PERA UITFs.

“There are five more PERA UITFs that were already accredited by the BSP and the BIR (Bureau of Internal Revenue) which hopefully will be launched soon,” said Diokno.

The BSP, he said, is also working closely with partner regulators such as the Securities and Exchange Commission and the Insurance Commission to introduce more financial products which are eligible under the PERA law such as mutual funds, shares of stocks, insurance products, among others.

The current 12 PERA UITFs in the market are managed by professional fund managers.

Diokno said there are UITFs for each investors, depending on their risk profiles and appetites.

“Of the 12 PERA UITFs, three are short-term money market funds which are suitable for conservative investors. There are six which are bond funds which are suitable for moderate investors while (another) three are equity funds and they are suitable for aggressive investors,” he said.

As of February, there are 3,087 employees with PERA, 662 self-employed individuals and 630 overseas Filipinos, for a total of 4,379.

Anyone with a Tax Identification Number can be a PERA contributor. An individual can contribute up to P100,000 while overseas Filipinos can participate by as much as P200,000 annually. By the time the contributor reaches 55 years old and have invested in PERA for at least five years, they can redeem the PERA investment tax-free.

“Compared to other retirement and investment products, PERA provides contributors or investors exclusive tax benefits which enable them to accumulate their retirement savings at a faster pace,” said Diokno.

Income earned from PERA investments is exempted from final withholding, capital gains and regular income tax. PERA contributors are also entitled to a five percent tax credit on contributions for the year that can be used to pay or lower annual income tax due while qualified PERA withdrawals are not subject to taxes. In addition, in case of the death of the contributor, the PERA asset will be released to the beneficiaries without paying estate tax.

PERA was created under Republic Act No. 9505. It supplements existing retirement benefits from the Social Security System, Government Service Insurance System, and private employers.

PERA was first implemented in December 2016 but it has been largely unpopular to the working mass and underutilized until the BSP shifted to digital PERA in 2020.

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