PERA growth seen deepening long-term savings pool
The rapid expansion of Personal Equity and Retirement Accounts 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.
Manila, Philippines - The swift growth of Personal Equity and Retirement Accounts (PERA) is broadening the avenue for long-term domestic savings, which can aid businesses and infrastructure, according to officials. Despite a significant surge in contributions, the program remains relatively small. Joey Salceda, Presidente's Legislative Liaison Office secretary, explained that retirement savings can function as development capital, financing bonds, equities, infrastructure, and business expansion while providing Filipino workers with greater security in their golden years.
The number of PERA contributors grew by 385.3% to 30,055 as of June end from 6,193 a year prior, with cumulative contributions increasing by 36.7% to P757.6 million from P554.1 million. PERA, a voluntary savings and investment account under Republic Act 9505, allows qualified savers to invest in accredited financial products, receiving tax incentives in return.
The Bangko Sentral ng Pilipinas (BSP) has taken steps to make the program more accessible, including allowing bank time deposits and widening digital access. Despite its rapid growth, PERA is still in the early stages compared to the country's broader savings base. Analysts argue that savings are vital not only for individual households but also for economic resilience, as a nation that saves more builds resilience, creates capital for investment, and is better prepared for shocks.
However, they caution against placing the burden of the country's external imbalance solely on ordinary consumers, highlighting that much of household spending goes to essential goods.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
