SSS and Pag-IBIG cover part of retirement, but many Filipinos still want a voluntary, tax-incentivized pot they control themselves. That is what the Personal Equity and Retirement Account (PERA) is for: a voluntary retirement savings program under Republic Act No. 9505 that can sit alongside SSS, GSIS, and employer plans.
This guide explains who can open a PERA, the annual contribution caps, the 5% tax credit, eligible investments, withdrawal rules (including the “55 and 5” rule), early-withdrawal penalties, and practical steps to start with a BSP- or SEC-listed administrator. All figures below come from Bangko Sentral ng Pilipinas (BSP) PERA materials — always re-check before you contribute.
What is PERA?
According to the BSP PERA FAQ, PERA is a voluntary retirement saving program that supplements existing benefits from SSS, GSIS, and employers. You appoint one accredited Administrator, choose eligible PERA products (up to five product categories), and optionally use a third-party custodian or self-custody.
It is personal and portable: the account is in your name, and the investment mix can change as your risk profile changes. PERA is not a get-rich-quick product. Returns depend on the underlying UITFs, bonds, equities, or other eligible products you pick — and those can go up or down.
Who can open a PERA?
BSP states that any person who is at least 18 years old and has a Tax Identification Number (TIN) can be a PERA contributor. Overseas Filipinos (and, in some cases, a spouse or child acting for a married OF) may also open accounts. Administrators typically also ask for a valid government ID and a Philippine bank or e-wallet settlement account during online onboarding.
Before you apply, prepare:
- Your TIN (apply with BIR first if you do not have one)
- A valid ID (passport, driver’s license, UMID, PhilID, etc.)
- A local bank account or fully verified e-wallet for funding and withdrawals
- Time to complete a Client Suitability Assessment (CSA) and risk disclosure
How much can you contribute each year?
BSP’s current FAQ lists these maximum annual contributions that qualify for tax incentives:
- Local contributor (employed or self-employed): up to ₱200,000 per year
- Married couples: ₱200,000 for each spouse (separate limits)
- Overseas Filipino: up to ₱400,000 per year
- Private employer matching: up to the amount still allowable for that contributor
You may contribute more than the cap, but the excess does not earn the 5% tax credit. The original law (RA 9505) set lower peso limits; the Secretary of Finance later adjusted them. Use the BSP FAQ numbers above as the working reference for 2023 onward, and confirm with your Administrator if a further update is posted.
The 5% tax credit — and other tax perks
Under Section 8 of the PERA Act and BSP’s PERA tax-credit FAQ, a contributor gets an income tax credit equal to 5% of qualified PERA contributions for the year:
- Local contributor max credit: ₱10,000 (5% of ₱200,000)
- Overseas Filipino max credit: ₱20,000 (5% of ₱400,000)
The credit is evidenced by a BIR PERA Tax Credit Certificate (PERA TCC / BIR Form 2337). Tax credits are generally valid within five years from issuance. Employees usually apply the credit against income tax; OFs may claim it against certain Philippine internal revenue tax liabilities. There is no cash refund of unused credit in the sense of a payout — it offsets tax due.
BSP also notes that:
- Income earned from investments and reinvestments of the maximum allowed amount is exempt from tax on investment income
- Qualified withdrawals upon retirement are tax-free, subject to withdrawal rules
- PERA assets are generally not treated as your assets for insolvency and estate-tax purposes under the program rules
Employer contributions that stay within the employee’s annual maximum can also count toward the 5% credit, and employer-paid amounts may be exempt from withholding on compensation/fringe benefits — confirm the current BIR revenue regulations with your payroll or tax adviser.
What can you invest in?
Only products approved as PERA-eligible by the concerned regulator qualify for the incentives. BSP lists categories such as:
- Units of a Unit Investment Trust Fund (UITF)
- Shares of mutual funds
- Annuity contracts
- Insurance pension products
- Pre-need pension plans
- Shares or other securities listed and traded on a local exchange
- Exchange-traded bonds
- Government securities
- Other non-speculative, readily marketable products the regulator allows
In practice, many retail savers start with peso PERA UITFs or bond/money-market funds from banks and trust corporations (for example products offered through BDO, BPI, Landbank, Metrobank, PNB, EastWest, ATRAM, DragonFi, or Luna Securities). Always match the fund to your CSA risk rating — equity funds can lose value in the short term.
Administrators and how to open an account
You designate only one Administrator. As of BSP’s published participant list, digital platforms and administrators have included names such as ATRAM Trust (including PERA by ATRAM / GCash-linked onboarding), BDO Unibank, BPI Asset Management and Trust Corporation, DragonFi Securities, and Luna Securities. Product providers and custodians are listed separately on the BSP PERA participants page — check that page for the latest accredited names before you apply.
Typical online opening flow (exact steps vary by provider):
- Pick an accredited Administrator and open their PERA / Invest Online channel
- Complete e-KYC, CSA, and risk disclosure
- Choose eligible PERA product(s) consistent with your risk profile
- Nominate a settlement account and fund your first contribution
- Keep statements; your Administrator and custodian report transactions at regular intervals
GCash users, for example, can start registration via ATRAM’s open-finance flow and then manage the account in the PERA by ATRAM app after approval (often 1–2 business days). Bank clients may open through BDO Invest Online or BPI Wealth channels if they already have enrolled deposit accounts. Fees (administration, custody, fund management) are charged by the parties you appoint — ask for the full fee schedule before funding large amounts.
When can you withdraw? The “55 and 5” rule
BSP explains that PERA distributions are tax-exempt (income/estate tax rules as applicable) when:
- You reach age 55 and have made qualified contributions for at least 5 years (lump sum or monthly pension), or
- Upon the contributor’s death, regardless of age or contribution history
You can withdraw earlier, but early withdrawal generally means you must repay the taxes waived (early-withdrawal penalties). Exemptions from those penalties include:
- Accident or illness-related hospitalization lasting more than 30 days
- Permanent total disability
- Immediate transfer of proceeds to another PERA product and/or Administrator within 15 calendar days of withdrawal
Treat PERA like long-term retirement money. If you need cash in one to three years, an emergency fund in a Basic Deposit Account, digital bank savings, or GSave/Maya Savings is usually a better first layer than early PERA withdrawals.
PERA vs MP2, SSS, and bank savings
PERA does not replace SSS or Pag-IBIG. Think in layers:
- SSS / GSIS: mandatory social insurance for workers
- Pag-IBIG MP2: voluntary savings with Fund-declared dividends and a five-year term — useful, but a different product with different tax treatment
- Bank / digital savings: liquid emergency money (PDIC-insured deposits up to the legal limit)
- PERA: long-horizon retirement investing with a 5% contribution tax credit and tax-exempt investment income within the caps
Many people fund an emergency buffer first, keep SSS/Pag-IBIG current, then add PERA only with money they will not need before age 55.
Practical tips before you contribute
- Verify accreditation. Use BSP’s participant list and BIR accreditation — do not send money to anyone claiming “PERA returns” outside licensed channels.
- Read the fee sheet. Admin, custody, and management fees (often around a fraction of a percent to 1%+ per year depending on product) compound over decades.
- Start small and automatic. Even ₱1,000–₱5,000 a month builds habit; stay within what your budget allows after necessities and emergency savings.
- Keep tax papers. Save your PERA TCC and contribution confirmations for BIR filing.
- Review yearly. Revisit risk profile, contribution room left under the ₱200k/₱400k cap, and whether employer matching is available.
Quick checklist
- Confirm you are 18+ with a TIN
- Choose one BSP/SEC/IC-prequalified, BIR-accredited Administrator
- Finish CSA and open only eligible PERA products
- Contribute within the annual cap to maximize the 5% tax credit
- Plan to leave funds until the 55-and-5 rule (unless a penalty exemption applies)
- Track fees, statements, and your PERA TCC
PERA is one of the few Philippine vehicles that pairs voluntary investing with a clear statutory tax credit. Used patiently — after your emergency fund and mandatory contributions are in place — it can be a solid Handle/Save Money tool for retirement. Used as a short-term “parking” account, the early-withdrawal tax clawback can erase the benefit.
This article is general information only and not financial advice. Rates, rules and fees change, so please verify with the provider or the official agency before deciding.