BSP Bares Rise In PERA Accounts

The value of Personal Equity and Retirement Account (PERA) contributions reached Php 237 million in September 2021 from Php 144 million in September 2020, representing a 62 percent increase year-on-year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Photo Insert: Anyone with a Tax Identification Number can be a PERA contributor.

The noted increase may be attributed to the BSP and partner providers’ promotion of the retirement savings program for Filipino families, especially those working abroad.

As of Q3 2021, there were a total of 4,001 PERA contributors, led by full-time employees at 2,827 (70 percent), followed by self-employed individuals at 590 (15 percent), while Overseas Filipino Workers (OFWs) comprised 584 (15 percent).

“We continue to actively promote financial security and encourage more Filipinos to plan for retirement and set aside funds for their sunset years through PERA,” said BSP Governor Benjamin E. Diokno.

PERA is a voluntary retirement savings program created under Republic Act No. 9505 that supplements existing retirement benefits from the Social Security System, Government Service Insurance System, and private employers. Anyone with a Tax Identification Number can be a PERA contributor.

An individual may contribute a maximum of Php 100,000 while OFWs can put up to Php 200,000 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.

Among the benefits of the PERA include a five percent income tax credit on the PERA contribution which can be used to pay income tax liabilities. For OFWs, the five percent tax credit can be claimed against any internal revenue tax liability in the country.

All income earned from investments and reinvestments is also exempted from taxes on investment income. Lastly, PERA assets are not considered assets for insolvency and estate taxes.

The BSP designed a roadmap for the end-to-end digitalization of PERA, following its launch in September 2020. Seedbox Philippines, the digital platform provider of PERA, is an open-architecture platform that allows individuals to invest in PERA funds from different fund providers depending on their needs.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic