Private employers can now claim a dual tax deduction if they match or exceed the retirement contributions of their employees, the Bangko Sentral ng Pilipinas (BSP) said, as policymakers seek to deepen the domestic capital market and boost corporate participation in the country’s voluntary savings program.

Companies that match or surpass the Personal Equity and Retirement Account (PERA) contributions of qualified workers are eligible for tax deductions equal to 150 percent of the employer’s total share, the central bank said in a statement on Thursday, May 21.

This means the incentive offers a base 100 percent tax deduction under the PERA law and an additional 50 percent tax cut under the Capital Markets Efficiency Promotion Act (CMEPA).

PERA serves as a voluntary retirement savings vehicle designed to supplement state-sponsored pension systems, such as the Social Security System (SSS) and the Government Service Insurance System (GSIS). Under these accounts, employees can invest in stocks, bonds, funds, and other products that are exempt from a range of taxes, allowing for more efficient wealth accumulation.

“By promoting PERA, businesses can help employees save and invest more, while also benefiting from improved employee satisfaction and retention,” BSP Deputy Governor Lyn I. Javier said.

This dual benefit positions the program as a tool for long-term talent management alongside financial planning.

Investment boundaries for different demographics were also established under the program, allowing locally employed and self-employed individuals to invest up to ₱200,000 per year, while overseas Filipinos may contribute up to ₱400,000 annually to maximize their retirement potential.

East West Banking Corp., which onboarded in April, is the first universal bank to launch an employer-sponsored PERA program with voluntary enrollment. The BSP is urging other lenders and large corporations to follow suit.

Beyond retirement savings, the BSP sees PERA as a way to broaden the investor base and deepen the capital market, noting that channeling savings into productive investments is essential for supporting financial stability and sustainable economic growth. (Derco Rosal)