BSP exempts PERA-UITFs from non-resident ownership rule

The Bangko Sentral ng Pilipinas on Tuesday said it has exempted personal equity retirement account (PERA) unit investment trust funds (UITFS) from the non-resident ownership rule, allowing overseas Filipinos to invest in central bank securities.

According to the BSP, PERA-UITFs are now exempted from the rule that limits non-resident ownership in trust funds investing in central bank securities to 10%.

“The move reflects the BSP’s continued effort to promote financial health. It helps Filipinos, both at home or abroad, build secure and sustainable retirement savings,” the BSP said in a statement.

“It also helps develop the country’s private pension system and strengthens domestic capital markets,” it added.

With the rule change, nine out of 13 PERA-UITFs that exceed the 10% non-resident ownership limit will be allowed to invest in BSP securities, and diversify their portfolio.

Launched in December 2016, eight years after the PERA Law or Republic Act 9505 was passed in 2008, the PERA program is designed to encourage Filipinos to save up for their retirement.

The program complements the mandatory contributions of employees who are members of the pension funds Social Security System (SSS) and Government Service Insurance System (GSIS).

PERA, however, is voluntary unlike the automatic salary deductions for government employees under the GSIS and private sector employees under the SSS.

Individuals may contribute up to a maximum of P100,000 a year or P8,333.33 a month, while overseas Filipino workers (OFWs) are given a leeway of as much as P200,000 or P16,666.66 a month.

PERA constitutes five types of accounts across five recognized products such as trust funds, mutual funds, insurance, pre-need and government and listed bonds, with account holders given a 5% tax credit deducted from their annual tax liabilities. —AOL, GMA Integrated News