Corporate regulator to widen investment options for retirees

Emilio Aquino —contributed photo

The Securities and Exchange Commission (SEC) is preparing more investment options for people saving for retirement.

The SEC, chaired by Emilio Aquino, said on Tuesday it was seeking comments from the public ahead of the issuance of a list of stocks, bonds and other securities that would be covered by the Personal Equity and Retirement Account (Pera) Act of 2008.

The law allows users to open and set aside funds in Pera, a voluntary saving program, while enjoying tax reductions and other exemptions upon retirement. Any person with the capacity to contract and who has a tax identification number can be a Pera contributor for as much as P100,000 except overseas Filipino workers who can contribute up to P200,000.

Tax and regulatory issues delayed the issuance of the Pera Act, which is being implemented by the Bangko Sentral ng Pilipinas (BSP).

A spokesperson from the SEC said the BSP recently amended the Pera rules in 2020 to streamline the investment process.

Enlarging the pool

Meanwhile, the proposed new rules would “expand the Pera ecosystem,” thus allowing the broader implementation of the law.

In its statement, the SEC said new investment choices for Peras would include newly formed mutual funds, including any subfund of an umbrella fund and exchange-traded funds whose fund managers have a track record of at least five years “and whose names contain the words ‘Personal Equity and Retirement Account’” or “Pera.”

Also included were real estate investment trust shares, corporate bonds with an investible rating issued by an accredited credit rating agency, and equity securities that form part of the Philippine Stock Exchange index (PSEi), the SEC said.

Moreover, government securities, securities issued by the BSP and corporate bonds issued by banks in compliance with BSP requirements will also be considered eligible Pera investment products.

Finally, the SEC said it may qualify other securities as Pera investment products if these were “nonspeculative” and “readily marketable.” They must also have a track record of regular income payment to investors.

A Pera product may lose its eligibility if its registration statement gets suspended or revoked, or in the case of a PSEi member security, if it is removed from this index, the SEC said of the proposed rules. INQ