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Contributions to personal retirement tool PERA grew 30% in 2022 — BSP

The Bangko Sentral ng Pilipinas (BSP) on Tuesday said contributions to the Personal Equity and Retirement Account (PERA) grew by a high double-digit rate last year.

In a statement, the BSP said PERA contributions stood at P329.55 million as of end-2022, up 30% from P253.35 million  contributions recorded in 2021.

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.

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

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

The BSP said the number of PERA contributors in 2022 increased by 16% to 5,100 in 2022 from 4,382 in 2021.

The central bank said about 3,600 employed individuals contributed P223.71 million to the fund as of end-2022.

This was followed by 721 OFWs and 785 self-employed individuals who invested P60.58 million and P45.25 million, respectively.

The BSP launched PERA in 2016 under Republic Act No. 9505.

In end-December 2017, the central bank said PERA funds were recorded at P37.15 million with 583 contributors.

The BSP said a potential contributor only needs a Tax Identification Number to invest in the PERA.

By the time the contributor reaches the age of 55 years old and an investment period of at least five years, he or she can redeem the PERA investment free of taxes, it said.

The central bank launched a digital platform for the PERA in September 2022 to lure younger and technology savvy Filipinos to save and invest for their retirement

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