WIDER USE of the Personal Equity and Retirement Account (PERA) can help increase government savings, which could be used for other investments that would support economic growth, the Bangko Sentral ng Pilipinas (BSP) said.
“On a macro level, PERA can play a crucial role in reducing what the government should spend to support and care for seniors,” BSP Deputy Governor Eduardo G. Bobier said in a speech on behalf of BSP Governor Eli M. Remolona, Jr. at as forum on Wednesday.
“Also on a macro level, the savings kept in PERA accounts can foster investment and capital market development, driving economic growth,” he added.
According to the BSP, only 16% of Filipino adults aged 18 to 59 years old actively contribute to a pension scheme.
“If we don’t change that, it will be a huge hardship for the elderly or a huge burden for their children and the state,” Mr. Bobier said. “On a micro level, PERA can bridge the huge gap between the current and ideal level of retirement savings among Filipinos.”
As of end-June 2023, PERA contributions jumped by 30% to P368 million, latest BSP data showed.
The number of PERA contributors also grew by 15.9% to 5,402 in the first half of 2023.
“Admittedly, take-up has been slow, with even just a small increase after we digitalized the PERA ecosystem in 2020, which made it easier to sign up,” Mr. Bobier said.
“Ease of use and convenience is something we entrust to our market players while the BSP, along with our partner agencies, aims to provide a conducive regulatory environment,” he added.
The BSP is also working at incorporating open finance in the PERA program, he said.
“Open finance would allow Filipinos to connect their bank accounts with fintechs and other financial service providers to make it easier for them to buy, collect, invest, save and even borrow. We are hopeful that as a pilot use case, PERA will be a big beneficiary from open finance.”
The PERA program was launched in 2016 and is a voluntary fund scheme meant to supplement retirement benefits from the Government Service Insurance System or the Social Security System, as well as private employers. — Luisa Maria Jacinta C. Jocson
