The Securities and Exchange Commission (SEC) it will ensure securities under the Personal Equity and Retirement Account (PERA) are non-speculative, readily marketable, and provide regular income stream to investors.
The agency said it is vetting securities that will qualify for the investment products that will be marketed under PERA, a tax-shielded investment account for people looking to put up a nest egg in time for retirement.
These include newly-formed mutual funds, including any sub-fund of an umbrella fund and exchange traded funds whose fund managers have a track record of at least five years, and whose names contain the words “Personal Equity and Retirement Account” or “PERA”; real estate investment trust shares; corporate bonds with an investible rating issued by an accredited credit rating agency; and equity securities that form part of the Philippine Stock Exchange index (PSEi).
“Government securities, securities issued by the Bangko Sentral ng Pilipinas (BSP), and corporate bonds issued by banks in compliance with BSP requirements will also be considered eligible PERA investment products,” it said.
The SEC said it reserves the right to declare a security ineligible under PERA.
A registered equity security may lose its eligibility if its registration statement gets suspended or revoked, or in the case of a PSEi member security, if it is removed from the PSEi.
“Corporate bonds issued by banks may be deemed ineligible if they are declared to be in default by a competent authority or person in accordance with applicable laws, rules, and contracts, and if their credit rating is downgraded to a non-investible grade,” the SEC said.
The government has been touting the potential of PERA to tap into public savings to drive economic activities particularly of companies that will benefit from the expected increase in liquidity.
Created under Republic Act 9505, PERA is a voluntary retirement account that aims to promote capital market development and financial security for Filipinos here and abroad.
The investor whether locally employed (together with his employer) or self-employed, can contribute to PERA up to P100,000 per year, while overseas Filipinos workers can contribute up to P200,000. Married individuals meanwhile can contribute up to P100,000 for each spouse.
An employer’s contribution to the employee’s PERA may be deducted from its gross income up to the amount needed to complete the maximum allowable PERA contribution. An individual is entitled to a 5- percent tax credit creditable only against income tax liabilities of the person.
