TIME deposits are now among the eligible investment products under the Personal Equity and Retirement Account (PERA), the country’s voluntary retirement savings program, the Bangko Sentral ng Pilipinas (BSP) ruled.
A statement issued by the central bank last Tuesday read that time deposits now join the ‘growing lineup’ of PERA-qualified financial products that include unit investment trust funds, stocks, real estate investment trusts, and government securities.
According to the BSP, the inclusion of time deposits gives Filipinos another option for retirement savings.
‘It may appeal to savers who prefer a familiar savings product with predictable returns and relatively lower investment risk,’ the central bank said.
Under the latest PERA guidelines issued on August 20 by the BSP, banks that meet applicable BSP prudential requirements may offer PERA-eligible time deposits.
The BSP said banks must also obtain accreditation from the Bureau of Internal Revenue (BIR) and enter an arrangement with an accredited PERA administrator before accepting placements.
Lyn I. Javier, BSP’s Deputy Governor for Financial Supervision Sector, said that by introducing PERA time deposits, the central bank is providing ‘another practical option’ for individuals who want to build their retirement savings through a product they already understand and trust.
‘Retirement planning should be simple, accessible, and within reach of every Filipino,’ Javier emphasized.
Unlike regular time deposits, the central bank said a PERA time deposit forms part of a contributor’s equity and retirement account and may qualify for applicable tax incentives.
According to the BSP, PERA time deposits remain bank deposits and are subject to applicable banking regulations and insurance rules of the Philippine Deposit Insurance Corp.
PERA is the country’s voluntary retirement savings program that enables Filipinos to build funds for retirement while enjoying government tax incentives.
‘The BSP encourages Filipinos to make retirement saving a regular part of their financial planning and to choose PERA products that match their financial goals, investment horizon, and risk preferences,’ the central bank said in its statement.
Data obtained by reporters from Javier showed that total contributions under PERA have reached P757.55 million as of June 30. The amount is 45.4-percent higher than the P521.36 million contributions in the same period last year.
Meanwhile, there are now 30,055 contributors as of June 30, compared to the 6,193 contributors in the same period last year.