The government boosted the threshold, effectively doubling, what Filipinos could contribute to Personal Equity and Retirement Account (PERA), a voluntary retirement savings program.
In a statement on Monday, the Bangko Sentral ng Pilipinas said the move could spur more Filipinos to invest in their retirement.
The move raised the ceiling for annual contributions to PERA from locally employed and self-employed Filipinos and overseas Filipinos. The former could now contribute up to P200,000 yearly, from the previous P100,000. The latter is now allowed to park up to P400,000 from the previously-set P200,000.
'It also supports the government's broader thrusts of mobilizing individual savings for capital market development and generating funds for long-term projects,' said BSP Governor Felipe Medalla.
The voluntary retirement program started in 2016 and acts as a supplement to existing pension programs in the country, such as the Government Service Insurance System and the Social Security System.
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Finance Secretary Benjamin Diokno approved the increase in allowable yearly contributions, following recommendations from the PERA Inter-Agency board. The board comprises the BSP, as lead agency, the Securities and Exchange Commission, the Insurance Commission, and the Bureau of Internal Revenue.
The new contribution ceiling will take effect this year
The central bank also removed the security deposit of a PERA Administrator's duties, which previously stood at 0.5% of the book value of PERA assets. The BSP said this would lower cost of administering PERA assets.
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