BSP-run voluntary retirement savings program reports bigger contribution in 2022

MANILA, Philippines — The government's voluntary retirement savings program reported a significant increase in contributions in 2022, speaking volumes on the public’s spending priorities as living expenses turn expensive by the day.

In a statement on Tuesday, the Bangko Sentral ng Pilipinas said that personal equity and retirement account (PERA) contributions ballooned 30% year-on-year to P329.6 million by the end of 2022.

Data likewise revealed that PERA contributors rose by 16% on annual basis to 5,100 in 2022. Broken down, employed Filipinos accounted for more than half of the contributions, or P223.71 million in contributions. Contributions amounting to P60.58 million from overseas Filipino workers and P45.25 million from self-employed Filipinos completed the total amount. 

The increase in contributions came amid one of the most trying periods for Filipinos, as prices of consumer goods and services reached a 14-year high in 2022 that exacerbated a cost-of-living crisis for many. 

PERA is a voluntary retirement savings program that was only launched in 2016, which the BSP considers a “superior” option since contributions can be exempt from tax payments. Likewise, the contribution has a 5% tax credit that can be used to pay for national income tax liabilities, and even a tax-free distribution on qualified withdrawal of investments into the program. 

That said, the BSP reiterated that interested contributors need to provide their tax identification numbers to be able to invest in PERA. Contributors can redeem their investments tax-free once they are 55 years old and have invested for at least five years.