Maximum PERA contributions doubled | Inquirer Business

Maximum PERA contributions doubled

/ 02:04 AM March 07, 2023
BSP building

Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)

Filipinos both here and abroad may now double their maximum contributions to their Personal Equity and Retirement Account (PERA), as part of efforts to encourage more to prepare for retirement.

According to the Bangko Sentral ng PiIipinas (BSP), PERA contributors who are based in the Philippines are now allowed to put in as much as P200,000 per year instead of P100,000.


The maximum allowed contribution for overseas-based Filipinos was also doubled to P400,000 per year from P200,000.

The BSP launched in 2016 this voluntary retirement savings program that is intended to supplement state-based pension plans and employer-sponsored retirement plans.


“The increase in the limits provides our kababayans with greater opportunities to ensure their financial security. It also supports the government’s broader thrusts of mobilizing individual savings for capital market development and generating funds for long-term projects,” BSP Governor Felipe Medalla said in a statement.

Superior option

According to the BSP, PERA is considered a superior retirement savings option mainly due to the tax benefits it offers to individual contributors, such as tax exemptions on earnings from PERA investments; a five percent tax credit on the PERA contribution that can be used to pay for national income tax liabilities; and a tax-free distribution on qualified withdrawal of PERA investments.

A potential contributor only needs a tax identification number to invest in PERA. By the time the 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 BSP said that, following the PERA Act of 2008, Finance Secretary Benjamin Diokno approved the increase effective immediately, upon the recommendation of the PERA Inter-Agency Board.

More participation

The board is composed of the BSP as the lead agency, the Securities and Exchange Commission, the Insurance Commission and the Bureau of Internal Revenue.

Also, the BSP removed the basic security deposit for the faithful performance of a PERA Administrator’s duties, which was previously set at 0.5 percent of the book value of PERA assets.

This move is expected to lower the cost of administering PERA assets, which may impact the contributors through lower charges on PERA, and to encourage more BSP-supervised financial institutions to participate in the PERA program.


BSP data show that PERA contributions surged by 30 percent to P329.55 million in 2022 from P253.35 million in 2021.

At the same time, the number of contributors jumped by 16 percent to 5,100 from 4,382.

Among contributors, seven-tenths or 3,600 were employees and accounted for P223.71 million or two-thirds of the total fund.

There were also 721 overseas Filipino workers and 785 self-employed individuals who invested P60.58 million and P45.25 million, respectively.

During its first full-year in 2017, PERA contributions totaled P37.15 million with 583 contributors.

—Ronnel W. Domingo INQ
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TAGS: BSP, Business, PERA, retirement fund
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