PERA is short for Personal Equity and Retirement Account. It refers to a voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines.
PERA was established via RA 9505 (PERA Act of 2008) to promote capital market development and savings mobilization in the Philippines. It is a voluntary and personal account, established by any person with the capacity to contract and possesses a Tax Identification Number (TIN), for the purpose of being invested solely in PERA investment products. Under the PERA Law, a maximum of five PERA can be opened by a Contributor at any time under one PERA Administrator.
You may use PERA to slowly build up additional funds which you may use upon retirement, even if you are employed and are entitled to receive retirement benefits from your employer. Funds remaining inside your PERA will also be automatically paid out to your beneficiaries tax-free, in case of death, and thus will prove to be beneficial as an estate planning tool as well.
Under PERA, you can take advantage of the following tax benefits:
A. Tax Credit
Your contributions within a calendar year, up to a maximum of PhP100,000 (or PhP200,000 for Overseas Filipinos) shall be entitled to a tax credit in the amount of five percent (5%). You may use this tax credit against your income tax liabilities or if you are an Overseas Filipino, against any national internal revenue tax liability (excluding your withholding tax liabilities as withholding agent).
B. Tax Exempt Investment Income
Investment income which is income earned from investments and reinvestments of PERA assets in the maximum amount allowed is exempt from taxes on investment income. This includes:
1. The final withholding tax on interest from any currency bank deposit, yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements, including a depository bank under the expanded foreign currency deposit system;
2. The capital gains tax on the sale, exchange, retirement or maturity of bonds, debentures or other certificates of indebtedness;
3. The 10% tax on cash and/or property dividends actually or constructively received from domestic corporation, including a mutual fund company;
4. The capital gains tax on the sale, barter, exchange or other disposition of shares of stock in a domestic corporation;
5. Regular income tax.
C. Other Tax Incentives
1. Qualified Distributions made upon attainment of age 55 & completion of 5 yearly contributions are excluded from the gross income of the Contributor and not subject to income tax
2. Qualified Distributions made upon the death of the Contributor are excluded from the gross income of the heirs or beneficiaries and not subject to estate tax.
To get you started, here is a primer and FAQs on the basic information about PERA:
Here are the PERA products offered by BPI:
BPI PERA products are currently available through BPI Asset Management and Trust Corporation, 7F BPI Buendia Center, Sen. Gil J. Puyat Avenue, Makati City 1209.
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A BPI savings or checking account to serve as a settlement account
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A valid government ID
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A Tax Identification Number (TIN)
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Copy of the Income Tax Return or any document that can validate the TIN.
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1,000 Pesos – Initial Amount of Investment and exclusive of Fees
Additional requirements for OFWs:
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Overseas Employment Certificate issued by the Philippine Overseas Employment Administration (POEA)
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Any official document showing that he will earn or has earned income in a foreign country in the year of the PERA contribution
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Overseas Filipinos interested in enrolling in PERA may refer to the BIR memorandum dated 14 September 2020 regarding the issuance of TIN by clicking here.
For spouse:
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Marriage certificate attesting marriage with the OF
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Sworn certification that the spouse is opening a PERA for and in behalf of the OF who has not availed of the benefits under the PERA Act
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Supporting documents attesting OF status (POEA Overseas Employment Certificate and official documents showing income earned or will be earning in a foreign country)
For child:
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The birth certificate attesting that he/she is the child of the OF
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Sworn certification that the child is opening a PERA for and in behalf of the OF who has not availed of the benefits under the PERA Act, or the spouse of the OF has not availed of the benefits under the PERA Act
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Supporting documents attesting OF status (POEA Overseas Employment Certificate and official documents showing income earned or will be earning in a foreign country)
To know more about BPI PERA, you may email us at
[email protected] or contact: 0927-136-1319.