MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno is confident of the continued increase of investments under the Personal Equity and Retirement Account (PERA) amid the challenges such as the impact of the coronavirus pandemic.
The government aims to have five million PERA contributors by 2025, which Diokno said is 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,” Diokno said in a virtual briefing aired over the central bank’s Facebook page on Thursday.
PERA is a voluntary retirement savings program of the government targeted to help the capital markets since the pooled funds are invested in equities and bonds.
The government launched the digital PERA in September 2020 and since then the number of PERA contributors has increased from 1,684 to 4,379.
Diokno said around 71 percent of the contributors are employees while the remaining figure is shared by overseas Filipino workers (OFWs) and self-employed individuals.
Total PERA contributions as of end-February reached PHP265.5 million and 68 percent of it came from employees, 19 percent from OFWs, and 13 percent from self-employed individuals.
To date, 12 PERA products are available through the unit investment trust fund (UITF).
Diokno said six of these are bond funds, three are in short-term money market funds, and another three are in equity funds.
“There are five more PERA UITF products that are accredited by the BSP and the BIR (Bureau of Internal Revenue) which, hopefully, will be launched soon,” he said.
He added that BSP is also working with the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) regarding other financial products that are eligible under the PERA Law and these include mutual funds, shares of stocks, and insurance products.
Authorities are encouraging the public to invest in PERA since products under this have tax benefits such as exemption from final withholding tax, capital gains tax, and regular income tax.
PERA investments are also entitled to a 5 percent tax credit on contributions for the year, which the investors may use to pay or lower their annual income tax.
Beneficiaries of PERA contributors who died while still holding on to their investments may claim the assets without paying estate tax. (PNA)