Updated: June 27, 2018
So finally, PERA is available for everyone to invest in. As of writing, it’s not really being advertised or promoted yet. But you can definitely invest and open a PERA account already.
Today, I’m sharing with you my experience in opening a PERA account. I did this through BPI (Bank of the Philippine Islands).
If you’re not familiar with PERA investment or the Personal Equity and Retirement Account, then you can read the previous articles I’ve written:
- PERA Facts: Personal Equity and Retirement Account Philippines
- For 2017, Be Sure to Invest in P.E.R.A.
Opening a PERA Account
The first thing I did was to go to my branch and inquired about it. The bank officer referred me to the manager, who then told me that they don’t have full knowledge about it.
However, she asked for my email and mobile number, and said that she’ll refer me to a PERA Individual Administrator, who will contact me to answer my questions. I gave those to her and left the bank.
The next day, the BPI PERA Individual Administrator assigned to my area called and we talked for almost half an hour regarding the process of opening an account.
The first part of our conversation revolved around her explaining to me what PERA is. She wanted to set an appointment to explain further but I said that it won’t be necessary.
The second half of our talk was my turn to ask questions. Particularly, on the process of opening an account without the need to go to the BPI Main Branch office.
I learned it was possible, as she’ll just send the application form to my branch. I would just need to fill it up, and my branch would submit it back to them, to which I agreed.
A few days after, my branch called to inform me that the application form was already there. I went the next day, completed the form, and submitted my requirements. And that’s it! The whole process is pretty smooth and straightforward.
By the way, in case you’re wondering, here are the requirements for opening a PERA account with BPI:
- A BPI savings or checking account to serve as a settlement account
- A valid government ID
- A Tax Identification Number (TIN) – Read: How to apply for TIN
- A TIN ID, or copy of your ITR, or any document that can validate the TIN
- 1,000 Pesos – Initial Amount of Investment and exclusive of Fees
The smallest starting amount you can invest is just P1,000 and the maximum is P100,000 per year; but P200,000 for OFWs.
How OFWs can invest in PERA
There are three (3) options. The OFW can physically go to the bank when you’re in the Philippines. Or you can ask your spouse to open one for you. Or lastly, any of your children.
I forgot to ask if parents or siblings are allowed to open an account for OFWs. Maybe that’s something you can ask for me when you inquire.
Additional requirements for OFWs:
- Overseas Employment Certificate issued by the Philippine Overseas Employment Administration (POEA)
- Any official document showing that he will earn or has earned income in a foreign country in the year of the PERA contribution
Lastly, the P200,000 per year limit is per person. So if you’re married, and both you and your spouse are OFWs, then your maximum limit as a couple in PERA contributions is P400,000 per year.
My recommendation is to maximize this if you can afford it.
Final Thoughts
As per the one I talked to from BPI, it’s not yet possible to do automated contributions to PERA just like how I do it with their RSP (Regular Subscription Plan); or BDO’s EIP (Easy Investment Plan).
Moreover, it’s actually not recommended (for now) to do this because you’ll have to pay administrative fees each time, which can amount to a significant amount. So the cheapest way is to do it lump-sum every year to minimize fees.
Also, I like how you have control over where to put your money. You can choose to place it in different PERA funds that range from conservative (Money Market Fund) to aggressive (Equity Fund).
But if you ask me, if you’re 45 years old or younger, then put it all on the Equity Fund.
However, BPI also gives you the option to assign your own Investment Manager, or choose them as your fund manager.
From what I learned, BPI can actively manage your investment and apply “bucket investing” wherein the money is invested according to your time horizon. Your money will go from aggressive to conservative investments as you near the age of 55.
Lastly, I discovered a PDF copy of the BPI Application Form online. If you’d like to download it, then just click here.
If I had only known, then I would have skipped that part when I waited for the forms to arrive in my branch. But hopefully, access to PERA becomes more widespread in the next months and year.
How about you? Have you already opened a PERA investment? Please share your story below? Thanks.
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very helpful article!
Among OFW’s who is staying with his wife and children abroad like me, the only option is to go home to the Philippines and apply personally. I inquired 2 months ago to BPI bank if it’s possible that I will let my mom open an account for me but they replied that according to the rule only the “wife and children ” are allowed to open for an OFW applicant.
Filipino citizens should really apply for this type of investment because it is like the 401K of the USA. I will surely open an account once I have my vacation. Thanks for the continuous effort to financially educate most of our fellow countryman sir Fids.
OFWs lang ba ang puede mag invest sa PERA?
So there are still fees? Would go for UITF na lang pala kasi net na.
Thanks for letting us know the process involve in opening PERA account
Thanks for the information!
Thanks Fitz! Helpful as always.
Can you also monitor your PERA investment through online channels like bpiexpressonline?
I got the application forms yesterday since my office is just across the BPI main office here in Makati. For everyone who wants to apply, you may proceed to 17th floor – they have dedicated unit for this type of investment. Regarding the with fees, a sample amount of 50k will have a 750 fee.
Thanks Sir Fitz!
I already planned it by early next year, have to settle first our other obligation when it comes to financial matter.
Is BPI the only bank offering this? How about BDO?
@pinaygoddess1
No, not just OFWs.
@anna
You can get 5% of your total PERA contribution as income tax credit. If you put P100,000 in your PERA account, you can get P5,000 deduction from your annual income tax liability. That’s a significant amount compared to what you will pay for the fees. And the income is tax free as well, that’s why there’s a separate type of fund for PERA that’s not included in the list of UITFs.
@Regie
Yes, you can monitor it online.
@Don Gloria
It’s also being offered (soon) by BDO, and other financial institutions as well.
Great! What’s the name of your individual admin? He/she seemed to have impressed you! Must be impressive to me as well!
Hi Fitz,
For OFW requirement, re: “Any official document showing that he will earn or has earned income in a foreign country in the year of the PERA contribution”, would an Employment Certificate indicating salary & tenure be enough?
Thanks,
Gen
Hi Fitz
Is the 5% income tax credit automatic when you supply your TIN or you need to apply for it separately?
Thanks!
BPI went to our office and explained about PERA. Our HR’s initiative. It’s promising but I’m quite hesitant because of fees. There’ BPI fees and also fees from Custodian, Landbank. Which I think hard to breakeven even with the 5% credit.
Per BPI, You will be issued a tax credit certificate but unsure how they can handle it. They’re still waiting for BIR instructions per BPI’s agent.
Re the fees..
BPI as PERA administrator charges 1% for all contributions made during the
calendar year. Aside from that, Landbank as the appointed custodian of the
BSP also charges custodianship fees of PHP 350 (upon account opening) and
PHP 50 for every contribution made.
So yeah, it’s better to max it out and pay the whole 100K if you have the funds.
Upon opening the account you will be charged the following fees:
– 350pesos (for opening the account)
– 50pesos for the contribution
– 1,000pesos for the 1% of the 100K
TOTAL: PHP 101,350
I am an OFW. One of the most salient benefits of PERA for me is the 5% tax credit on annual contributions. Assuming these are granted to you hassle-free, it’s akin to having a minimum 5% guaranteed return each year. However, it seems BIR has yet to issue detailed guidelines on utilization of the tax credits. What is not clear to me at this point are the following:
1) What if an OFW has no taxable income in the Philippines? Will the tax credits be forfeited? Can they be used to offset other taxes, e.g. real property taxes? If so, are City Treasurer’s Offices aware of this?
2) What happens to unused tax credits? Do they accumulate or get forfeited?
hi fitz may i know all the detailed fees or charges once i withdraw at age 55?
Timely Fitz! Great news for us. A few Qs, what “administrative fees” are you referring to when you’re going for automated payments? 2. Can you send your applications to your local BPI branch and do transactions there? Or in the foreseeable future if not yet allowed currently?
@Gen
I believe that’s accepted.
@Vinz
You need to apply for it separately.
@Dennis
Even if you breakeven with the 5% credit, the significant growth of the investment over the years will outpace the fees.
@JCE
Thank you for sharing.
@MG
I will forward your questions to BPI and BIR.
@nard
I believe there will be no more charges.
@Doc Remo
There’s a fixed fee for every time you make a contribution, regardless of the amount. So doing regular payments, you will incur that fixed fee. That’s why it’s recommended to just do it all in one go per year.
Yes, I processed my application through my local BPI, who handled the documents to and fro the main branch.
Hi Fitz, I have applied for PERA account along with all the necessary requirements including the initial deposit.
So a few days ago they have already debited the initial deposit from my account. But today I haven’t received any email from them yet on what is the next step. So far I see nothing new in my bpi express online account changes just that the initial deposit was deducted… can you give advice what should be happening next? should there be a new BPI account number that would appear in the online banking website to monitor your deposits?
Looking forward to your reply. Thanks in advance.
Hi Fitz. I opened my PERA acct with BDO just last month Dec 2017. They made it available online so those who have a BDO online access just need to login to their online account and from there they can do the e-training online, take the client suitability or risk profile and open the PERA acct.
My question is since BDO and BPI already started PERA last 2016 is it true that BIR has yet to issue the applicable Tax Memorandum Circular on how to implement the TCC up until now? So basically you are already contributing to PERA from 2016 but you still won’t be able to enjoy the 5% tax credit benefit?
How does the 5% Tax credit gets applied if I am an employee? Aside from the tax credit and not allowed to withdraw till 55 years old, what is the difference between PERA, UITF, and MUTUAL FUND and VARIABLE INSURANCE?
[…] Fitz Villafuerte: PERA Facts: Personal Equity and Retirement Account Philippines and How to Invest in PERA: Opening an Account Experience […]
Planning to open a PERA account soon. When it comes to monitoring funds/account performance, I wonder which bank would be better, BPI or BDO? What u think Fitz!?
Hi Sir Fitz,
First of all, let me say thank you for having a wonderful website. It really inspires me to do better when it comes to handling my finances. Recently, I have opened an account for Pag-ibig MP2 and now I’m considering to open a PERA account. I am 23 yrs old and I just wanna ask, is it advisable to open a PERA account this early? If so, which type of fund suits the best for my age (Money Market Fund or Equity Fund)? Lastly, Is it okey to invest 1k per month or 12k a year for PERA account?
Hoping for your kind response. Thank you in advance.
More power to you and to your site. 🙂
Im already 55 yrs old is it possible for me to invest in pera
Hi sir! Wondering how you were able to apply to 5% tax credit? Did you ask your HR to deduct this amount from your tax due? Or do you have to go to BIR to get a refund? Thanks!
Thanks Fritz! Been reading a lot of blogs about PERA already but yours only has the answer to my question. 🙂
[…] Two of the best investment options for young Filipino parents and couples who want to prepare for retirement are Exchange Traded Funds (ETFs) and Personal Equity Retirement Account (PERA). […]