Advertisement

‘Use retirement account’—Angara

Filipinos can now prepare and save up for retirement by investing in a Personal Equity Retirement Account, the country’s first-ever voluntary retirement account with tax incentives, Senator Juan Edgardo Angara said. 

The Bangko Sentral ng Pilipinas has recently launched the retirement account, eight years after Republic Act 9505 or the PERA Act of 2008 was signed into law.

“Many Filipinos have not been accustomed to saving or investing. It’s best to start saving early on, and the PERA law gives Filipinos an incentive to do so,” Angara said.

“So for those who received extra bonus this Christmas, go to the bank and apply for PERA,” added Angara, who was then still a congressman when he authored the law.

The counterpart measure was pushed in the Senate by his father, former Senator Edgardo Angara.

The PERA law aims to promote savings mobilization and capital market development to contribute to fiscal sustainability through the provision of long-term financing.

A national survey on financial inclusion conducted by the BSP showed that only 10.8 percent of Filipinos save for retirement or old age.

“We’re happy that the BSP finally launched this investment tool that will help and encourage Filipinos save up for their sunset years or for emergency medical situations,” Angara said.

The PERA law allows individuals to open up to five PERA accounts through accredited PERA administrators, which can be a bank or a financial company, and invest up to P100,000 annually.

Overseas Filipino workers can invest up to P200,000 annually.

Individuals who invest in PERA are entitled to a 5-percent income tax credit. 

All income earned from PERA investment products—which include unit investment trust funds, share of stock of mutual funds, insurance pension products, government securities, and other financial products—upon reaching retirement or death are tax-exempt.

Payments will be made when the individual reaches the age of 55. This can be either in lump sum, a pension for a definite period, or lifetime pension.

Early withdrawals will be subject to a penalty, except in cases when the individual is totally disabled due to an accident or hospitalization.

Topics: Filipinos , Personal Equity Retirement Account , Senator Juan Edgardo Angara
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementKPPI
Advertisement