MANILA, Philippines — Voluntary retirement contributions jumped by 30 percent to P329.55 million last year from P253.35 million in 2021 amid the steady rise in participants, according to the Bangko Sentral ng Pilipinas (BSP).
The central bank reported a 16-percent increase in the number contributors to the Personal Equity and Retirement Account (PERA) to 5,100 from 4,382.
About 3,600 employed individuals contributed P223.71 million to the fund as of end-2022, followed by 721 overseas Filipino workers (OFWs) with P60.58 million, and 785 self-employed individuals with P45.25 million.
Created under Republic Act 9505, PERA is a voluntary retirement savings program that supplements state-based pension plans from the Social Security System and the Government Service Insurance System, as well as employer-sponsored retirement plans.
The BSP introduced PERA in 2016 with support from the financial industry.
The BSP encourages Filipinos to take full advantage of the benefits offered under PERA, including the exemption of PERA earnings from taxes on final withholding, capital gains, and regular income.
PERA contributors are also entitled to a five percent tax credit on contributions for the year that can be used to pay national income tax liabilities. Moreover, qualified PERA withdrawals are not subject to taxes.
The number of contributors rose sharply when Digital PERA was launched in September 2020.
Digital PERA is an online one-stop shop where investors can conveniently open an account, browse various PERA products, monitor their PERA accounts, and settle transactions via InstaPay and PESONet.
The digitalization of PERA has also enabled Filipinos here and abroad to conveniently open an account, invest in different PERA products, and access their PERA investments using mobile devices at any time.
Under the Digital Payments Transformation Roadmap, the BSP aims to shift 50 percent of total retail transactions to electronic channels and increase the number of Filipino adults to 70 percent by 2023.
With the COVID-19 pandemic serving as catalyst, the share of digital payments to total retail transactions increased to 30.3 percent by 2021 from 20.1 percent in 2020, while the number of banked Filipino adults almost doubled to 56 percent in 2021 from 29 percent in 2019.