The Bangko Sentral ng Pilipinas said Monday the maximum annual contribution to the Personal Equity and Retirement Account, a voluntary retirement savings program, was doubled in line with the government’s efforts to encourage more Filipinos to prepare for retirement.
It said in a statement financial regulators raised the annual limits from P100,000 to P200,000 for locally employed and self-employed individuals; and from P200,000 to P400,000 for overseas Filipinos.
Pursuant to Republic Act No. 9505 or the PERA Act of 2008, Finance Secretary Benjamin Diokno approved the increase in allowable yearly contributions effective immediately starting 2023 upon the recommendation of the PERA Inter-Agency Board.
The board is composed of the Bangko Sentral ng Pilipinas as the lead agency, the Securities and Exchange Commission, the Insurance Commission and the Bureau of Internal Revenue.
BSP Governor Felipe Medalla said the increase in the limits provides Filipinos 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,” Medalla said.
Aside from increasing the PERA contribution limits, the BSP also 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 is expected to lower the cost of administering PERA assets, which may impact the contributors through lower charges on PERA. This is also seen to encourage more BSP-supervised financial institutions to participate in the PERA ecosystem.
PERA, which was launched by the BSP in 2016, is a voluntary retirement savings program that supplements state-based pension plans and employer-sponsored retirement plans.
The BSP reported that contributions to PERA rose 30 percent to P329.55 million as of end-2022 from P253.35 million a year ago. The number of PERA contributors also increased 16 percent to 5,100 in 2022 from 4,382 in 2021.
About 3,600 employed individuals contributed P223.71 million to the fund as of end-2022, followed by 721 overseas Filipino workers and 785 self-employed individuals who invested P60.58 million and P45.25 million, respectively.