PERA contributions hit over P750M as enrollees surge at end of June

FILIPINOS’ CONTRIBUTIONS in Personal Equity and Retirement Account (PERA) surged in the first half of the year as the number of enrollees increased nearly fivefold from last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

As of the end of June, accumulated PERA contributions soared by 45.3% to P757.554 million from the P521.363 million recorded in the same period last year.

Of the total, the bulk or 59.33% came from employee contributions, which grew by 24.08% year on year to P449.45 million from P362.239 million.

Contributions from self-employed Filipinos also more than doubled (179.85%) to P207.901 million at end-June from P74.29 million in the prior year, while those from overseas Filipinos climbed by 18.12% annually to P100.203 million from P84.833 million.

Meanwhile, the total number of PERA contributors as of the first half ballooned by 385.31% to 30,055 from 6,193 a year ago.

Most of the enrollees during the period were self-employed Filipinos at 23,529, surging by 2,398% from the 942 logged a year earlier.

The tally of PERA-enrolled employees also went up by an annual 22.63% to 5,441 from 4,437, while Filipinos abroad with PERA rose by 33.29% to 1,085 from 814.

PERA, created under Republic Act No. 9505 in 2016, is a voluntary retirement saving program which supplements benefits from the Social Security System, Government Service Insurance System, and employer-provided plans.

Contributors aged 18 and above with a tax identification number are allowed to open a PERA. Self-employed and locally employed contributors may contribute P200,000 annually, while overseas Filipino workers may invest up to P400,000.

The PERA law also offers incentives to contributors, such as tax exemptions and credits.

BSP Deputy Governor Lyn I. Javier said they aim to expand overseas Filipino contributors through partnerships with the Department of Labor and Employment and the Overseas Workers Welfare Administration.

The central bank has likewise tapped employers to boost the share of employees in the total PERA enrollees, with other banks also seeking to offer the product in their respective platforms.

“(So, with more banks) adopting, then opening also their platforms for easy access to PERA, we hope that we could reach more Filipinos enrolling to have a PERA account,” she told reporters on the sidelines of an event last week.

This came after East West Banking Corp. began offering in May a voluntary PERA contribution program for its employees, with DragonFi Securities, Inc. as the administrator.

Ms. Javier also noted that digital banks have also signified interest to follow suit.

Under the program, private employers can contribute to the employees’ PERA as part of its compensation package, which may be reflected in the employer’s income tax return as a deductible expense from its gross income.

The Capital Markets Efficiency Promotion Act also allows private employers to acquire an additional 50% tax deduction to a total of 150% by contributing an amount equal to or greater than their employees’ PERA contributions.

Meanwhile, Ms. Javier said they are working to further boost public awareness of PERA as they hope to hit “more than double” growth in PERA accounts.

“Well, the promise, I mean, the product itself is very attractive. So, it should speak for itself. Awareness would help it,” Ms. Javier said.

“As to the pace of growth, there are several factors that would affect that, but everybody wants (double-digit growth), more than double in fact,” she added.

Last year, the BSP also launched the Open Finance for PERA Pilot to encourage more Filipinos to open accounts by streamlining the onboarding process as well as improving access to the program.

Under the framework, customers of Land Bank of the Philippines; Maya Philippines, Inc.; Metropolitan Bank & Trust Corp.; Philippine National Bank; Rizal Commercial Banking Corp.; Union Bank of the Philippines, Inc.; and G-Xchange, Inc. can open a PERA account in the respective financial institutions’ platforms.

Their investments will be managed by the PERA administrators ATRAM Trust Corp.; BDO Unibank, Inc.; and BPI Wealth – A Trust Corp. — Katherine K. Chan