A lawmaker on Saturday called for overseas Filipino workers (OFWs) to invest in a Personal Equity Retirement Account (PERA), the country’s first voluntary retirement account that comes with tax incentives.
Senator Juan Edgardo “Sonny” Angara, one of the authors of PERA, said investing in a retirement account in the Philippines will help OFWs secure a comfortable life after retiring.
“Our OFWs sacrifice a lot in leaving their families behind to work abroad in order to give them a good life,” the senator said.
“This is why we encourage our OFWs to save and invest their earnings here in the country so they can secure a comfortable retirement and be with their families,” Angara said.
Under the PERA Law or Republic Act 9505, OFWs can invest up to Php200,000 annually while non-OFWs can invest a maximum of Php100,000.
When an OFW reaches the retirement age of 55, payments will be tax-exempt and can be in the form of lump sum, a pension for a definite period, or lifetime.
Withdrawals are also allowed, however, a penalty is imposed if the withdrawal is not due to disability or hospitalization. Withdrawal is also only allowed for contributors for at least five years.
“PERA investments have higher returns because it is a tax-free investment income. PERA supplements the social pension Filipinos can get from SSS (Social Security System) or GSIS (Government Service Security System),” the senator said.
An OFW’s spouse and children can open a PERA account on behalf of the OFW.
“It is true the most important investment of our OFWs is the education of their children. PERA will be helpful to ensure that our OFWs will have enough savings when they decide to return home,” Angara said.
“Many Filipinos have not adopted the habit of saving or they do not know where to invest their money.It is sad to hear that there are OFWs who fall victims to investment scammers like the “bitcoin” scam. We thus encourage OFWs to invest their money at PERA,” Angara said.
The Bangko Sentral ng Pilipinas (BSP) has accredited Banco de Oro (BDO) and Bank of the Philippine Islands (BPI) as PERA institutional administrators.
