BSP targeting December rollout for PERA scheme
THE BANGKO SENTRAL ng Pilipinas (BSP) is sticking with a December target to roll out the long-delayed personal equity and retirement account (PERA) after it resolved taxation issues with other government agencies, although the launch will be limited to Metro Manila.
BSP Assistant Governor Johnny Noe E. Ravalo told the House Committee on Economic Affairs that the central bank is working to allow banks to offer PERA instruments by the week of Dec. 16.
“We are that much closer, the system is in place. We’re at the stage where we are pretty much cleaning up final confusions there are. As of today, our fighting target is to still launch within 2016,” Mr. Ravalo told lawmakers in a briefing at the House of Representatives.
The PERA Law or Republic Act 9505 was passed in 2008, which aims to encourage Filipinos to save up for their retirement by serving as a new investment product. However, its implementation has been stalled since, with the reporting guidelines only released last July 21.
The PERA stands as a complement to the mandatory contributions for workers through the Government Service Insurance System (GSIS) for state employees and the Social Security System (SSS) for those in the private sector. However, signing up for the PERA is voluntary, against the automatic salary deductions
for GSIS and SSS premium payments.
A person can contribute a maximum of P100,000 yearly under the PERA platform, but the amount may be as much as P200,000 for overseas Filipino workers. A qualified contributor may place money in five PERA accounts at once across five recognized investment products. In turn, the individual can enjoy a 5% tax credit that can be deducted in his/ her annual tax liabilities to encourage saving up for the future.
The contributions will then be invested in other products such as trust funds, mutual funds, insurance, pre- need, government bonds and listed equities for the money to grow, the proceeds of which may be claimed once a person reaches the age of 55 or has invested in the fund for at least five years.
Mr. Ravalo said initial tech simulations showed “reasonably good results,” although one more test run will be conducted within the next three weeks.
In an earlier interview, BSP Deputy Governor Nestor A. Espenilla, Jr. said they were looking at a soft launch for the investment tool this November, with the full implementation eyed by yearend.