BSP Governor Benjamin Diokno
MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno supports suggestions to raise the ceiling for Personal Equity and Retirement Account (PERA) investments, citing its benefits to Filipinos in the long run.
In a virtual briefing Friday, Diokno said PERA Law was enacted 12 years ago or in 2008 so the impact of inflation should be considered in determining investment cap.
“This will give Filipinos more flexibility in choosing the right pair of products and better prepare for their retirement. We will coordinate with the Department of Finance and the Bureau of Internal Revenue as this proposal will also have fiscal implications,” he said.
PERA is a voluntary retirement savings program that supplements benefits being provided by the Government Service Insurance System (GSIS) and the Social Security System (SSS).
To date, PERA’s annual cap for domestic investors is PHP100,000 while it is PHP200,000 for overseas Filipinos.
The BSP launched Digital PERA last September to attract more investors, especially since digital financial transactions got a boost during the current pandemic.
Diokno said this investment is a “superior retirement savings option” since it provides unique tax benefits compared to other retirement and investment products.
PERA incomes are exempted from final withholding tax, capital gains tax, and regular income tax; and allow contributors to earn 5 percent tax credit on contribution for the year.
The tax credit, in turn, can be used to pay or lower investors’ annual income tax due.
PERA withdrawals are not subject to tax and if the investors’ die, their beneficiaries will not be required to pay estate taxes.
Diokno said the number of PERA investors jumped by nearly 50 percent since the launch of Digital PERA or from around 1,600 last September.
It reached around 2,500 to date, with additional investments amounting to around PHP18.9 million.
He said a more active drive will be done to promote PERA next year.
“The BSP is seeing early gains after PERA became digital. While figures remain modest, we are confident that the number will continue to grow as more Filipinos are able to access PERA conveniently, anytime, anywhere,” he added. (PNA)
