BSP-backed PERA contributions near P500M

RETIREMENT PROGRAM A logo of the Bangko Sentral ng Pilipinas (BSP) is seen at their headquarters in Manila. BSP says PERA is a superior savings option mainly due to the tax benefits. —INQUIRER FILE PHOTO

MANILA, Philippines — The central bank-backed retirement savings program Personal Equity and Retirement Account (PERA) saw total contributions pile up by 24 percent in 2024 to nearly half a billion pesos, as more Filipinos actively prepare for their post-work years.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed total PERA contributions had risen to P491.39 million by the end of 2024, from P396.31 million in 2023.

Those funds came from a total of 5,912 contributors, up by 6.4 percent.

Savings program

Created under Republic Act No. 9505, PERA is a voluntary retirement savings program, which supplements state-based pension plans and/or employer-sponsored retirement plans.

READ: Bangko Sentral-backed Pera contributions on the rise

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 5 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.

Figures from the BSP showed employee contributors accounted for the bulk of PERA members at 4,211.

This segment contributed P341.75 million to the program last year, growing by 25 percent.

There were 789 overseas Filipino workers who invested in PERA, with their contributions rising by 19 percent to P82.25 million last year.

Self-employed

Lastly, the number of self-employed contributors had climbed to 912, data showed. This segment pitched in P67.4 million to the program, increasing by 25 percent.

In 2023, the BSP had said that 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. INQ