The Securities and Exchange Commission (SEC) projects a rising number of Filipinos investing in their future through the Personal Equity and Retirement Account (PERA) following the enactment of the Capital Markets Efficiency Promotion Act (CMEPA).
SEC chairman Francis Ed. Lim said CMEPA enhances long-term savings by granting a 50 percent additional tax deduction to private employers that match or exceed their employees’ PERA contributions. The incentive, he said, encourages broader retirement planning while boosting capital market liquidity.
Established under the PERA Act of 2008, PERA offers voluntary retirement savings with tax advantages beyond those available through the SSS, GSIS, or employer-sponsored plans.
CMEPA also introduces several capital market-friendly reforms, including:
Reduction of the stock transaction tax from 0.6 percent to 0.1 percent, making equity investments more attractive;
Lowering of the documentary stamp tax on initial share issuances to 0.75 percent from 1 percent, aiding IPOs and follow-on offerings;
Standardization of final withholding tax on interest income at 20 percent;
Capital gains tax harmonization to a flat 15 percent on foreign share sales, aligning with international norms.
“These reforms support a more competitive and inclusive market,” Lim emphasized, noting that broader investor participation will deepen financial literacy and retirement security in the Philippines.
Earlier reports indicate less than P500 million PERA contributions from around 6,000 contributors at end-2024, indicating a program with only a niche appeal, tipid participation and limited reach.
Key constraints, some analysts said, include low awareness, access barriers, product limitations, high fees, and implementation challenges surrounding the tax credit.
