The Bangko Sentral ng Pilipinas (BSP) on Tuesday has launched its digital Personal Equity and Retirement Account (PERA) program that will boost retirement savings amid the pandemic, targeting to reach 5 million Filipinos in a period of five years.

BSP Governor Benjamin Diokno said the digital PERA will play a “pivotal role” in capital market development and in driving economic growth by accumulating long-term savings, adding that it will contribute sustainability by increasing the availability of funds for long-term investments.

“We hope to encourage more Filipinos to plan and save for the future amid these challenging times. This aspiration can be made possible through digital PERA — a convenient and affordable program that aims to boost retirement savings,” Diokno said in his speech during the virtual launch.

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PERA Act or Republic Act No. 9505

The PERA program was established under Republic Act No. 9505, otherwise known as Personal Equity and Retirement Account Act of 2008, as a means to help Filipinos build funds which they can use upon retirement.

Diokno said the digital PERA venture will be “a one-stop shop digital experience” for investor education, client on-boarding, settlement of transactions, and monitoring of PERA investments.

With this platform, the BSP chief said Filipinos can now open or access their PERA account and invest 24/7, anywhere in the world using smartphones or any mobile device.

“You can immediately start investing from the comfort of your own home, without worrying about getting COVID-19 (coronavirus disease 2019). At the same time, the cost of online transaction is relatively cheaper. PERA contributors can send funds via InstaPay and other digital means,” he added.

Diokno said that the digital platform will provide opportunity for more banks and other financial institutions to join the PERA ecosystem as product providers or even as administrators.

The BSP chief clarified that the traditional investment schemes for PERA will still be available for those who find it challenging to transact online.

Underutilized PERA

Diokno said the PERA industry has not gained significant momentum since its implementation in December 2016 and is “currently underutilized.

As of July 29, only 1,586 Filipinos had been investing in PERA, with total contributions of P137 million. Of the total contributors, 1,099 or 69 percent are locally employed, 273 or 17 percent are Overseas Filipino Workers (OFWs), and 214 or 14 percent are self-employed.

Phase 2 of digital PERA

The BSP’s digitalization initiative is funded by the Asian Development Bank (ADB), Diokno said.

He also announced that the Phase 2 of the ADB-funded project will be the development of the ePERA system for the Bureau of Internal Revenue (BIR) that will facilitate processing and generation of electronic tax credit certificates (eTCCs) and acceptance of electronic reports from PERA administrators.

PERA’s customization and accreditation

Along with the digital transformation, the BSP also instituted the self-custody arrangement for PERA funds which allows the contributor to customize his or her account; and streamlined its examination curriculum for the accreditation of individual PERA administrators.

Diokno said the BIR, Securities and Exchange Commission, Insurance Commission, and the Department of Finance issued them tax and other regulations to provide further guidance on the implementation of the PERA Act and promote operational efficiencies.