BSP allows UITF asset diversification for Pera

The Bangko Sentral ng Pilipinas (BSP) has ruled that unit investment trust funds (UITF) opened in the Philippines but invested partly abroad may qualify as eligible products of Personal Equity and Retirement Accounts or Pera.

The move aims to expand the menu of investment products available for Pera contributors and give them more room to diversify their portfolios, according to a new memorandum signed by the BSP Deputy Governor Lyn Javier on Aug. 20.

Pera, created under Republic Act No. 9505, is a voluntary retirement savings program designed to supplement state-based pension plans and employer-sponsored retirement plans. The contributions are invested solely in eligible Pera investment products in the Philippines.

UITFs have long been permitted under Pera rules. What’s new is that locally issued UITFs with exposure to foreign assets—such as feeder funds or fund-of-funds—may also be accredited, subject to “existing approval process.”

“The availability of these types of funds as investment products provides Pera contributors with additional means to diversify their investment portfolios,” the central bank said.

“This, in turn, supports capital market development objectives of the Pera Law by broadening the range of available instruments and providing additional diversification opportunities,” it added.

Superior savings option

Pera is considered a superior retirement savings option mainly due to the benefits it offers to individual contributors, such as tax exemptions on investment income. An individual contributor is allowed to place up to P200,000 annually if living in the Philippines, and P400,000 a year if living and working overseas.

Contributors may also receive up to P10,000 in annual tax credits.

In case of death, the remaining Pera funds will be paid out to beneficiaries estate tax-free.

See Also

Lance Gokongwei gets off retailing to distribution sector

Data showed that total Pera contributions had risen to P491.39 million by the end of 2024, from P396.31 million in 2023. Those funds came from 5,912 contributors, up by 6.4 percent year-on-year.

Employee contributors accounted for the bulk of Pera members at 4,211. This segment invested P341.75 million, growing by 25 percent.

Meanwhile, there were 789 overseas Filipino workers who invested in Pera. Their contributions jumped by 19 percent to P82.25 million.

Lastly, the number of self-employed contributors climbed to 912 last year, contributing P67.4 million to the program.