August 18, 2024 | 12:00am
MANILA, Philippines — Voluntary retirement contributions rose by 24.3 percent to P457.6 million in the first half from P368 million in the same period last year as more and more Filipinos participate in the government’s Personal Equity and Retirement Account (PERA) program.
Data from the Bangko Sentral ng Pilipinas (BSP) showed the number of contributors to PERA stood at 5,686 in the first half, 5.3 percent higher than last year’s 5,402 contributors.
Broken down, around 4,024 employed individuals contributed P315.7 million to the fund as of end-June, rising by 25 percent from P253.3 million in the comparable year-ago period.
This was followed by 782 overseas Filipino workers with P78.8 million, 21 percent higher than last year’s P64.9 million, and 880 self-employed individuals with P63.1 million, up by 27 percent from P49.8 million.
The BSP introduced PERA in 2016 with support from the financial industry.
Created under Republic Act 9505, PERA is a voluntary retirement savings program that supplements state-based pension plans from the Social Security System and the Government Service Insurance System, as well as employer-sponsored retirement plans.
Starting 2023, contributors aged 18 and above who are employed locally or self-employed are allowed to make a maximum annual investment of P200,000 in their PERA accounts, up from P100,000 previously.
Meanwhile, OFWs are allowed to invest up to P400,000 a year from P200,000 previously. Each individual can have a maximum of five PERA accounts.
The BSP also encourages Filipinos to take full advantage of the benefits offered under PERA, including the exemption of earnings from taxes on final withholding, capital gains and regular income.
PERA contributors are also entitled to a five percent tax credit on contributions for the year that can be used to pay national income tax liabilities. Moreover, qualified PERA withdrawals are not subject to taxes.
When a contributor reaches 55 years old and an investment period of at least five years, he or she can redeem the PERA investment free of taxes.
The number of contributors rose sharply when Digital PERA was launched in September 2020. Digital PERA is an online one-stop shop where investors can conveniently open an account, browse various PERA products, monitor their PERA accounts and settle transactions via InstaPay and PESONet.
Be the first to comment