MANILA, Philippines\u00a0\u2013 If you\u2019re looking for a New Year\u2019s resolution that will still matter when the year\u2019s excitement fades, retirement is a good place to start, even if it feels a little premature this early in January. More specifically, PERA is one tool worth looking at.<\/p>\n
PERA, or the Personal Equity and Retirement Account, is designed to help you build a steady retirement investing habit, with tax perks that ordinary investing doesn\u2019t offer. It isn\u2019t a new type of fund in itself, but instead a legal framework created under the PERA Act of 2008 that sets the rules and incentives for how your retirement money is invested.<\/p>\n
If you\u2019re familiar with the 401(k) system in the US, it\u2019s basically the Philippines\u2019 version of that retirement account.<\/p>\n
Though it\u2019s been introduced as a concept for almost two decades now, PERA products only really began rolling out years later, as providers built products and went through accreditation. For example, the Bank of the Philippine Island\u2019s (BPI) PERA Money Market Fund<\/a> lists December 19, 2016 as its launch date, which gives you a sense of how long it took for mainstream offerings to show up.<\/p>\n Then came the more modern layer. The government and private sector started pushing \u201cdigital PERA\u201d distribution, including platforms that let investors open and manage PERA accounts online. One milestone is the launch of the country\u2019s first digital PERA platform in September 2020, which was framed as a way to widen access and reduce friction for retail savers.<\/p>\n Since then, more players have entered the space, including firms that aren\u2019t banks. DragonFi, for instance, is a securities broker that now offers PERA account access through its platform, which reflects how PERA has gradually expanded beyond traditional bank channels.<\/p>\n But before anything else, let\u2019s clear out two questions you might have.<\/p>\n \u201cWill this make me rich?\u201d No retirement vehicle can honestly promise that.<\/p>\n \u201cWill this make my investing more efficient?\u201d That is what PERA is designed to do. PERA cannot guarantee gains, but it can make the gains you do earn more valuable by reducing the tax drag that usually chips away at investment income.<\/p>\n PERA is also voluntary. You can open one on your own, and an employer may offer a PERA program, but it is not mandatory in the way SSS contributions are.<\/p>\n Basics of a PERA account<\/p>\n A PERA account is not an investment by itself.<\/p>\n It is a container that holds retirement investments, under a set of rules. Those rules cover who can offer PERA products, what kinds of investments are allowed, what tax benefits apply, and when you can withdraw without losing perks.<\/p>\n When you put money into PERA, your money does not sit there doing nothing. It gets invested into qualified PERA investment products. This distinction matters because PERA is often misunderstood as a special fund. In reality, it is closer to a retirement account that can hold different funds and instruments, as long as they fit the eligibility rules.<\/p>\n That said, here is the \u201cmenu\u201d a PERA account is allowed to invest in according to the\u00a0Bangko Sentral ng Pilipinas (BSP)<\/a>: UITF units, mutual fund shares, annuity contracts, insurance pension products, pre-need pension plans, listed shares traded on a local exchange, exchange-traded bonds, and government securities, plus other categories that regulators may allow under specific conditions<\/p>\n