The Bangko Sentral ng Pilipinas (BSP) is backing a suggestion to increase the annual maximum allowable contribution of Filipinos in the Personal Equity and Retirement Account (PERA).
“You may note that the PERA Law was enacted in 2008, that was 12 years ago. And considering the effect of inflation, there may be scope to adjust the cap upward,” BSP Governor Benjamin E. Diokno said in a briefing.
Under Republic Act No. 9505, the maximum annual contribution is set at P100,000 while overseas Filipinos are allowed to pour in up to P200,000 a year in their PERA accounts.
The voluntary scheme is meant to complement mandatory contributions by public and private sector employees. Aside from providing an alternate retirement fund, PERA also offers tax incentives, including a five percent income tax credit on contributions which could be used for paying income tax liabilities.
“We support the suggestion to revisit the annual maximum contribution… We will coordinate with the Department of Finance and the Bureau of Internal Revenue, as this proposal will also have fiscal implications,” Mr. Diokno said.
The number of Filipinos investing in the PERA has increased since its digital platform was launched in September.
As of December 8, the number of PERA investors jumped by nearly 50% to 2,506 while additional contributions worth P18.9 million were funnelled into PERA products.
“The BSP is seeing early gains soon after PERA became digital. While figures
remain modest, the BSP is confident that the number will continue to grow as more
and more Filipinos are able to access PERA conveniently, anytime, anywhere,” Mr. Diokno said.
The government aims to attract five million Filipinos to join the voluntary retirement fund in the next five years.
Only 20% of the 7.6 million Filipinos aged 60 years and above are covered by state-backed mandatory pensions, based on data from the Philippine Statistics Authority. — Luz Wendy T. Noble