FILIPINOS here and abroad can now invest more annually for their retirement through the Personal Equity and Retirement Account (Pera), according to the Bangko Sentral ng Pilipinas (BSP).
On Monday, the BSP disclosed it has approved the increase in annual Pera contributions for employed and self-employed Filipinos as well as overseas Filipino workers (OFWs).
Filipinos working here can now invest as much as P200,000 annually from the P100,000 initially allowed by BSP. OFWs, meanwhile, can invest up to P400,000 a year from the initial P200,000 annually.
“The increase in the limits provides our kababayans [compatriots] with greater opportunities to ensure their financial security. It also supports the government’s broader thrust of mobilizing individual savings for capital market development and generating funds for long-term projects,” BSP Governor Felipe M. Medalla was quoted in a statement as saying.
Aside from increasing the Pera contribution limits, the BSP has also removed the basic security deposit for the faithful performance of a Pera Administrator’s duties, which was previously set at 0.5 percent of the book value of Pera assets.
The move is expected to lower the cost of administering Pera assets, which may impact contributors through lower charges on Pera.
The BSP sees this as a means to encourage more BSP-supervised financial institutions to participate in the PERA ecosystem.
Pursuant to Republic Act 9505 (Pera Act of 2008), Finance Secretary Benjamin E. Diokno approved the increase in allowable yearly Pera contributions effective immediately starting 2023 upon the recommendation of the PERA Inter-Agency Board.
The board is composed of the Bangko Sentral ng Pilipinas (BSP) as the lead agency, the Securities and Exchange Commission, the Insurance Commission and the Bureau of Internal Revenue.
Launched by the BSP in 2016, the Pera is a voluntary retirement savings program that supplements state-based pension plans and employer- sponsored retirement plans.
Last month, the BSP disclosed that the increase in the level of contributions to the Pera was at its slowest in the past five years.
The number of contributions to the voluntary savings program increased by only 16 percent to 5,100 in 2022 from 4,382 in 2021. This is the slowest increase since the central bank started collecting Pera data in 2017.
The fastest growth in the number of contributions to Pera, a pool that aims to supplement retirement funds, was recorded in 2020 when there was a 92.435-percent increase in contributions to 2,671 from 1,388 in 2019.
Last year, the bulk of the Pera contributors or 3,594 were employees while 785 were self-employed and 721 were OFWs.
The BSP said, however, that Pera contributions reached P329.55 million at end-2022, a 30-percent increase from the P253.35 million recorded a year earlier.