NextGen Day

MANILA – Despite obstacles such as the impact of the coronavirus pandemic, Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) is optimistic about the sustained growth of investments under the Personal Equity and Retirement Account (PERA).

By 2025, the government hopes to have five million PERA contributors, which Diokno estimates to be roughly 10% of working Filipinos in the Philippines and overseas.

“We expect the number of PERA contributors to continue to rise as the economy recovers from the pandemic.” In any event, we realize the current challenges that may delay our goal’s achievement, and we will reassess the targets following conversations with the industry, partner agencies, and other stakeholders,” Diokno said in a virtual briefing broadcast on the central bank’s Facebook page on Thursday.

PERA is a government-sponsored voluntary retirement savings program aimed at assisting the capital markets, as the pooled money is invested in equities and bonds.

Since September 2020, when the government released the digital PERA, the number of PERA contributors has climbed from 1,684 to 4,379.

Around 71 percent of the donors are employees, according to Diokno, with the remainder made up of overseas Filipino workers (OFWs) and self-employed persons.

PERA payments totaled PHP265.5 million as of end-February, with 68 percent coming from workers, 19 percent from OFWs, and 13 percent from self-employed individuals.

The unit investment trust fund currently has 12 PERA products available (UITF).

Six of these are bond funds, three are short-term money market funds, and three are equity funds, according to Diokno.

“The BSP and the BIR (Bureau of Internal Revenue) have accredited five more PERA UITF items, which will hopefully be offered soon,” he said.

He also stated that the BSP is collaborating with the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) on other financial products that are covered by the PERA Law, such as mutual funds, stock shares, and insurance products.

PERA products include tax benefits such as exemption from final withholding tax, capital gains tax, and ordinary income tax, which authorities are pushing the public to invest in.

PERA investors are also eligible for a 5% tax credit on their annual contributions, which they can use to pay or lessen their annual income tax.

PERA donors’ beneficiaries who died while still hanging on to their investments are eligible to collect the assets without paying estate taxes.

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