PERA account: the Personal Equity and Retirement Account explained

A PERA (Personal Equity and Retirement Account) is a voluntary retirement account set up by law, RA 9505. You save into it through an accredited administrator, the money is invested in approved products, and the government gives you a 5% tax credit on each year’s contributions. You can take the money out tax-free from age 55, once you have contributed for at least 5 years.

The limits are from the BSP’s PERA FAQ and have applied since 1 January 2023. Married people each have their own limit.

Who can open one and what you need

The law lets anyone with a Philippine tax identification number (TIN) who can enter a contract contribute (RA 9505 Sec. 3). You can open and pay into a PERA while working abroad: overseas Filipinos get double the yearly tax credit limit (RA 9505 Sec. 5).

1. Choose an administrator. Only accredited PERA administrators can open an account. The BSP publishes the full list of administrators, custodians and products under PERA market participants (as of 15 September 2026). We don’t rank or recommend any of them.
2. Open the account with your TIN and identification.
3. Choose your PERA products from those the administrator offers (see below).
4. Contribute in one go or over the year. Contributions above your yearly limit earn no tax credit.

The tax credit

Each year you get a tax credit of 5% of your PERA contributions, counting contributions only up to your yearly limit (RA 9505 Secs. 5 and 8).

• It is not refunded in cash. The law says “in no instance can there be any refund” of the credit. It lowers tax you owe.
• Overseas Filipinos can use it against any tax payable to the national government under the National Internal Revenue Code (Sec. 8), not only income tax.
• It expires. The BSP’s FAQ says tax credits are valid for 5 years from the date they are issued.
• Income inside the account is tax-free on contributions up to the limit (Sec. 9), and so are withdrawals that follow the rules below (Sec. 10).

How the credit is worked out: tax credit = 5% x (your contributions for the year, up to the limit).

These are our worked examples from the rules above, not figures the BIR or BSP publish. Whether you can use the whole credit depends on the Philippine tax you owe. Neither the BSP nor the BIR website (bsp.gov.ph and bir.gov.ph, checked 20 October 2026) offers an official PERA tax credit calculator.

How you use the credit. The BIR’s Revenue Memorandum Circular 94-2026 (13 August 2026) sets out the steps:

1. Your PERA administrator applies for your PERA tax credit certificate (TCC) through the BSP’s PERA system within 60 days after the end of each calendar year, and gives it to you on your written request, on paper or as a PDF by email.
2. Employees: your employer applies the credit in the year-end tax adjustment.
3. Self-employed and overseas Filipinos: write “5% PERA TCC” and the amount under “Other Tax Credits/Payments” on your tax return and attach a copy of the TCC. On returns that have a line for a tax debit memo or the 5% PERA tax credit certificate, overseas Filipinos can use that line instead.

The full circular is on the BIR website; the steps above follow the BIR’s own digest of it.

Withdrawals

• Tax-free from 55. You can withdraw from age 55 if you have contributed for at least 5 years (RA 9505 Sec. 12; the BSP calls this the “55 and 5 rule”). Your heirs can also withdraw if you die.
• Early withdrawal costs you the tax breaks. Withdraw before then and you pay a penalty no lower than the tax benefits you received (Sec. 13). The BSP says this means all taxes waived in your favour are repaid to the BIR.
• Exceptions with no penalty: hospitalisation from an accident or illness for more than 30 days, permanent total disability, and moving your money to another PERA product or administrator within 15 calendar days.

What a PERA can hold

The BSP’s FAQ lists the kinds of PERA products allowed:

• units of UITFs (unit investment trust funds)
• shares of mutual funds
• annuity contracts
• insurance pension products
• pre-need pension plans
• shares of stock and other securities listed on a local exchange
• exchange-traded bonds
• government securities
• other products the regulators approve as non-speculative and readily marketable, with a record of regular income

Each product must be approved for PERA by its own regulator: the BSP, the SEC or the Insurance Commission. The value of most of these can go down as well as up. Our UITF guide explains the most common kind. See mutual funds.

PERA, MP2 and the SSS Pension Booster

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The MP2 figures come from Pag-IBIG Fund Circular No. 487 (2026); the Pension Booster figures from SSS’s Pension Booster FAQ (August 2024). See Pag-IBIG MP2. See the SSS Pension Booster.

Recent changes

• Higher limits since 2023. The yearly limits went from PHP 100,000 (PHP 200,000 for overseas Filipinos) under RA 9505 to PHP 200,000 (PHP 400,000) from 1 January 2023, as the BSP’s FAQ shows.
• Employer contributions, 2025. The Capital Markets Efficiency Promotion Act (RA 12214, Sec. 9) gives private employers an extra tax deduction of 50% of what they pay into their employees’ PERAs, if they contribute to all their employees’ accounts and at least match what each employee puts in. It did not change the yearly limits.

For the bigger picture, see our retirement planning guides.