PERA growth seen deepening long-term savings pool

MANILA, Philippines — The rapid expansion of Personal Equity and Retirement Accounts (PERA) is widening a channel for long-term domestic savings that can support businesses and infrastructure, although the voluntary retirement program remains small despite its nearly fivefold increase in contributors.

Presidential Legislative Liaison Office secretary Joey Salceda said retirement accounts could serve a broader economic purpose by channeling savings into productive investments while helping Filipinos prepare for old age.

“Retirement savings are also development capital. PERA funds can finance bonds, equities, infrastructure and business expansion while giving Filipino workers greater security in old age,” Salceda said.

The number of PERA contributors surged by 385.3 percent to 30,055 as of end-June from 6,193 a year earlier, according to data from the Bangko Sentral ng Pilipinas (BSP).

Cumulative contributions likewise increased by 36.7 percent to P757.6 million from P554.1 million.

PERA is a voluntary savings and investment account created under Republic Act 9505 to supplement pensions from the Social Security System, Government Service Insurance System and employers. Contributions may be invested in accredited financial products, with qualified savers receiving tax incentives.

Government policies have sought to make the program more accessible and encourage companies to help employees build retirement funds.

Under the Capital Markets Efficiency Promotion Act, qualified private employers may claim an additional tax deduction equivalent to 50 percent of their actual contributions to employees’ PERA accounts.

The BSP has also widened digital access to PERA and recently allowed bank time deposits as eligible investments, giving conservative savers access to a familiar product whose earnings are tax-exempt when held within a PERA account.

Despite its rapid expansion, PERA is still at an early stage compared with the country’s broader savings base.

Data from the Philippine Statistics Authority showed that gross national saving reached P8.4 trillion in 2025. Gross national saving refers to the portion of the country’s disposable income that remains after household and government consumption.

The role of savings in the economy recently gained attention after BSP Governor Eli Remolona Jr. told senators that raising the national savings rate was part of the long-term response to the country’s external imbalances.

“Hangga’t maaari, sana tumaas ‘yung savings natin. ‘Yun ang long-term na solution,” Remolona said during an Aug. 27 Senate finance committee hearing.

“Medyo mahirap sabihin ‘to, Senator, pero mayabang tayo eh. May consumption culture ang tawag,” he added.

The remark drew criticism for appearing to blame Filipino households for spending too much at a time of elevated prices and weak income growth.

However, Remolona made the comment as he was explaining the relationship among national savings, investment and the current account, which tracks the country’s trade in goods and services as well as income and transfers with the rest of the world.

He said dollar earnings from overseas Filipino remittances and the business process outsourcing industry were not enough to offset the money flowing out of the economy.

When the Philippines invests more than it saves, the difference must be financed through borrowing or investments from abroad. This creates a structural need for foreign currency and may add pressure on the peso over time.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., supported Remolona’s broader point that savings are important not only for individual households but also for economic resilience.

“Saving is not just a personal financial habit, it’s an economic strategy. A nation that saves more builds resilience, creates capital for investment and is better prepared for shocks,” Ravelas said.

However, he said saving alone was insufficient. Households must also spend wisely, invest in education and skills, support local businesses and hold institutions accountable.

Geronimo Law, meanwhile, cautioned against placing the burden of the country’s external imbalance on ordinary consumers, arguing that much of household spending goes to necessities. “Most of our imports are inelastic essentials, not consumer luxuries,” the law firm said. Inelastic essentials are goods whose demand changes little even when their prices rise because consumers and businesses cannot easily do without them.