BSP wants OFWs to invest more in retirement accounts
MANILA, Philippines – The central bank is urging the country’s large number of expatriate workers to invest a portion of their earnings in pension funds that will help them be better prepared financially for retirement, especially since these instruments are now available digitally.
As part of this thrust, the Bangko Sentral ng Pilipinas and the Philippine Trade and Investment Center recently conducted a series of online briefings about the Personal Equity and Retirement Account (PERA) scheme targeted at the large overseas Filipino communities in Hong Kong and Macau.
In particular, BSP’s PERA technical working group head, Director Jose Recon Tano, explained how the newly implemented investment program could benefit overseas Filipinos and help them prepare for retirement through PTIC’s Trabaho, Negosyo, Kabuhayan program.
He also tackled PERA’s digitalization which allows Filipinos to conveniently open investment accounts and fund them 24/7, from anywhere in the world, using mobile phones and other devices.
Officers from the three BSP-accredited PERA administrators also briefed the webinar participants on investing in the retirement accounts in their platforms. They discussed investor education, client onboarding, settlement of transactions and monitoring of PERA investments.
The conduct of the PERA webinar is in line with BSP’s advocacy to broaden financial literacy and help Filipinos achieve financial security.
This initiative came just a few weeks after BSP Governor Benjamin Diokno lamented that the law has so far failed to build a critical mass of investors as envisioned by its authors.
“Currently, Pera is underutilized,” he said in his speech, noting that only 1,586 Filipinos have availed themselves of the scheme as of the end of July 2020, with total contributions of a mere P137 million. “Since its implementation in December 2016, the Pera industry has not gained significant momentum.”
Of the total contributors, 1,099 or 69 percent are locally employed, 273 or 17 percent are overseas Filipino workers, and 214 or 14 percent are self-employed. On average, OFWs have higher contributions at P110,000; local employed workers, P82,000 and the self- employed, P76,000.
“These figures remain regrettably low,” Diokno said.
According to the Philippine Statistics Authority (PSA) latest report, the Philippines has around 7.6 million Filipinos aged 60 years old and above. Of this group, only 20 percent are covered by either SSS or GSIS, leaving 80 percent of senior citizens with no mandatory pension at all. [ac]
