Coming soon: Pinoys investing in retirement, pension accounts through mobile phones | Inquirer Business
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Coming soon: Pinoys investing in retirement, pension accounts through mobile phones

By: - Reporter / @daxinq
/ 03:52 PM September 01, 2020

MANILA, Philippines — Filipinos will soon be able to make pension plan investments through their mobile phones thanks to a new central bank initiative to bring the benefits of the 12-year-old Personal Equity and Retirement Account Law to more people.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said that Governor Benjamin Diokno will lead next week the launch of the “Digital PERA” initiative in collaboration with the Trust Officers Association of the Philippines (TOAP), the umbrella organization of bankers involved in managing clients’ long term investments.

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“[This] will allow Filipinos to invest in PERA investment products anytime, anywhere using only their mobile phones and other devices,” he said. “This is firmly in line with the BSP’s thrust to foster digitalization in the financial system and to bring the BSP closer to the people.”

Personal equity and retirement accounts — made possible by a law that was enacted in 2008, but remaining underutilized by potential investors to this day — is a voluntary retirement account that can be a supplementary source of retirement benefits in addition to state-sponsored retirement programs implemented by the Social Security System or Government Service Insurance System.

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The PERA scheme is structured to encourage Filipinos to invest in long term retirement saving products while enjoying certain tax incentives.

Diokno explained that the digitalization of the process will enable PERA-accredited banks and financial institutions to provide convenient and affordable retirement saving products to more investors through more efficient channels.

The central bank chief will lead the virtual launch of the Digital PERA service, which will be broadcast live via the BSP’s Facebook page on Sept. 8, Tuesday. The initiative, which is carried out by BSP in collaboration with TOAP, is themed, “Convenient and Affordable Retirement Savings through Digital PERA” or “#PERACares”.

Established via Republic Act 9505 of 2008, the scheme was meant to promote capital market development and savings mobilization in the Philippines. It is a voluntary and personal account for the purpose of being invested solely in PERA investment products. Under the law, a maximum of five accounts can be opened by a contributor at any time under one PERA administrator.

Under PERA, contributions within a calendar year, up to a maximum of P100,000 for local residents or P200,000 for expatriate Filipinos, shall be entitled to a tax credit of 5 percent, which may be used against income tax liabilities or, in the case of overseas Filipino workers, against any national internal revenue tax liability.

Investment income from PERA investments are also exempt from taxes on investment income.

JPV
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TAGS: Benjamin Diokno, BSP, Mobile phones, online application, pension, Retirement
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