BSP Increases the Allowed Contributions to PERA for Retiring Filipinos
Bangko Sentral ng Pilipinas (BSP) doubles the allowed contribution to Personal Equity and Retirement Account (PERA) to enable Filipino workers to invest more in their retirement.
PERA is a voluntary retirement savings program that supports state-based pension plans and employer-sponsored retirement plans. In 2022, the majority of PERA contributors included 3,594 employees, 785 self-employed locals, and 721 overseas Filipino workers (OFWs).
The BSP announced last Monday, March 6, that it approved the increase in annual PERA contributions for employed and self-employed Filipinos in the country, as well as OFWs.
Local workers can now invest up to ₱200,000 from the initial ₱100,000 set by BSP. On the other hand, OFWs can fund up to ₱400,000 from the former ₱200,000 yearly.
BSP Governor Felipe M. Medalla stated, “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.”
In addition to the increased contribution limits, the BSP removed the basic security deposit for the faithful performance of a PERA Administrator’s duties. The deposit was previously set at 0.5% of the book value of PERA assets.
BSP expects the action to lower the cost of administering PERA assets, as these assets could impact the contributors through lower charges on PERA. Moreover, BSP sees the action as a means to encourage more BSP-supervised financial institutions to engage in the PERA system.
Furthermore, Finance Secretary Benjamin E. Diokno approved the increase in annual PERA contributions following the recommendation of the PERA Inter-Agency Board. The board consists of BSP, the Securities and Exchange Commission, the Insurance Commission, and the Bureau of Internal Revenue.
According to the BSP, PERA contributions reached ₱329.55 million in 2022, a 30% increase from the ₱253.35 million recorded a year earlier.