BSP targets 5M Filipinos to invest in personal retirement tool PERA in 5 years

Despite a dismal turnout since the launch of the Personal Equity Retirement Account (PERA) four years ago, the Bangko Sentral ng Pilipinas is targeting to attract five million Filipinos to invest in the said fund.

This, after the BSP launched the digital platform for the PERA in a bid to lure younger and technology savvy Filipinos to save and invest for their retirement.

“After laying the foundation of a digital ecosystem for PERA, we are targeting to reach five million Filipinos in a period of five years, or what we call 5 in 5,” BSP Governor Benjamin Diokno said Tuesday.

Diokno earlier said that since the implementation of the PERA in December 2016, the retirement investment tool was underutilized as only 1,586 Filipinos had been investing in the program.

Though the “5 in 5” target seems ambitious, the central bank chief said he remains optimistic since there were more than 40 million locally employed Filipinos prior to the pandemic and around 2.2 million overseas Filipino workers (OFWs).

“While the pandemic rendered many Filipinos jobless, we nevertheless expect the Philippine economy to bounce back and create more job opportunities for displaced workers,” Diokno said.

Unemployment rate eased to 10% or 4.6 million jobless adults in July from a record-high of 17.7% or 7.3 million unemployed individuals in April due to the relaxation of quarantine restrictions during the period. 

“We recognize that achieving this target needs commitment from all stakeholders. We, at the BSP, together with other relevant government agencies, will continue to promote a conducive regulatory environment for PERA,” Diokno said.

“I encourage the market players to provide convenient and affordable PERA experience to your customers. I also hope to see more market players participate in the digital PERA ecosystem, such as insurance companies and mutual funds,” he said.

As a voluntary retirement account, PERA provides an organizing framework to help Filipinos 18 years old and above prepare for their eventual retirement.

The PERA law, crafted in 2008 as Republic Act 9505, provides tax benefits while instilling the discipline of saving money by making annual contributions to their own account.

Unlike existing national or corporate pension schemes, PERA does not require a deduction from one’s salary to accumulate funds.

The retirement investment tool relies on an individual’s decision to invest up to P100,000 annually to prepare for retirement, according to the BSP.

The PERA law allows individuals to open up to five PERA accounts and these can be invested in specific PERA-accredited product lines.

OFWs are provided the additional benefit of being able to invest up to P200,000 annually which is twice the normal limit.

Individuals who would like to open their PERA may do so through accredited PERA administrators such BDO Unibank and Bank of the Philippine Islands. —KG, GMA News