BSP pushes employer-sponsored PERA retirement savings

The Bangko Sentral ng Pilipinas is urging companies to make Personal Equity and Retirement Accounts a workplace benefit, betting that payroll enrollment and employer contributions can expand a voluntary retirement program that still reaches only a small fraction of Filipino workers.

The central bank amplified the campaign during “PERA@Work: Powering Employer-led Retirement Security Through PERA,” a July 8 forum at its Manila headquarters attended by more than 350 business leaders, human resources executives, finance officers, and policymakers.

Established under Republic Act No. 9505, or the PERA Act of 2008, PERA is a voluntary savings and investment program designed to supplement benefits from the Social Security System, the Government Service Insurance System, and employer retirement plans.

Locally employed and self-employed contributors may place up to PHP 200,000 a year in PERA, while overseas Filipinos may contribute up to PHP 400,000 annually.

Qualified contributors receive a tax credit equal to 5% of their contributions, resulting in a maximum annual credit of PHP 10,000 for local contributors and PHP 20,000 for overseas Filipinos.

Investment earnings are tax-exempt, while tax-free retirement withdrawals generally require the contributor to be at least 55 years old and to have made qualified contributions for at least five years.

Early withdrawals generally require contributors to repay taxes previously waived, although exemptions apply in cases including permanent total disability and accident- or illness-related hospitalization lasting more than 30 days.

Private employers may deduct their actual PERA contributions from gross income and claim an additional deduction equal to 50% of those contributions under Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act, bringing the potential deduction to 150%.

The additional deduction applies only to private employers that contribute at least as much as their employees and fund the PERA of all employees, subject to the program’s contribution limits.

For ordinary workers, an employer-led program could make retirement saving easier through automatic payroll deductions and could provide additional money when a company offers matching contributions.

PERA is still an investment account rather than a guaranteed pension, however, meaning returns depend on the selected products, while administration, custody, and investment management fees can reduce earnings.

PERA had 6,334 contributors with PHP 571.1 million in total contributions as of September 2025, including 4,503 employed contributors, 818 overseas Filipinos, and 1,013 self-employed people.

The subscriber base remains small compared with the Philippine workforce, which included 48.89 million employed people in April 2026.

EastWest Banking Corp. became the first Philippine universal bank to launch an employer-sponsored PERA program with voluntary enrollment in April, according to the BSP.

BSP Governor Eli M. Remolona Jr. said, “For the economy as a whole, PERA has what you call network effects.”

“Every new saver deepens the market for everyone else. More savers mean more capital. For bonds and equity, more companies expanding, more jobs. Your PERA works harder because others put theirs to work too.”

The BSP’s economic argument is that a larger pool of retirement savings could provide more long-term capital for government bonds, corporate debt, and equities, while giving households another source of money for retirement.

Deputy Governor Lyn I. Javier said, “Retirement security is not solely a government responsibility, nor solely an individual responsibility.”

“It is a shared undertaking in which employers can play a transformative role.”

Assistant Governor Ma. Belinda G. Caraan said, “Our goal is simple: to move from just awareness to real action.”

“We hope more employers will consider facilitating PERA enrollment, integrating PERA into benefits programs, or providing contributions that help employees build long-term financial security.”

In a video message, acting Finance Secretary Frederick D. Go said, “By working together, we can foster a stronger culture of saving and investing, improve financial resilience, and help ensure that more Filipinos can retire with confidence.”

Labor Secretary Francis N. Tolentino expressed support, noting that “this initiative is very timely as it allows individuals to save and plan for their retirement through an investment account with tax incentives.”

The forum was co-hosted by the BSP, the Trust Officers Association of the Philippines, and the Fund Managers Association of the Philippines.

Discussions covered retirement planning, pension funding, employer-led savings strategies, tax incentives, and the integration of PERA into workplace financial wellness programs.

Representatives from the Bureau of Internal Revenue, banks, trust companies, investment managers, insurers, securities firms, and actuarial companies participated in the discussions.

PERA administrators also assisted participants with product information, account-opening procedures, and questions about the program. (BSP)