Quick answer
PERA (Personal Equity and Retirement Account) is a voluntary retirement account created by RA 9505. Contributions earn a 5% tax credit, investment income inside the account is tax-free, and withdrawals after age 55 with at least 5 years of contributions are tax-free. Under the CMEPA law (effective July 1, 2025), you can contribute up to ₱200,000 a year, or ₱400,000 if you are an overseas Filipino, and employers can now contribute too.
Key takeaways
- Annual limit: ₱200,000 (₱400,000 for overseas Filipinos), doubled by CMEPA from ₱100,000 / ₱200,000.
- 5% of your contributions comes back as a tax credit certificate you can use to pay other national taxes.
- Interest, dividends and gains earned inside PERA are tax-exempt.
- Qualified withdrawal: age 55 and at least 5 years of contributions; early withdrawal costs you the tax benefits plus penalties.
- Open PERA through an accredited administrator (banks, brokers, fund companies) and choose eligible funds, bonds or stocks.
On this page
Most Filipino workers will rely on SSS (or GSIS) and Pag-IBIG for retirement, and for many that won't be enough. PERA is the government's answer: a personal retirement account with tax benefits, similar in spirit to a 401(k) or IRA. After years of low awareness, the CMEPA law made it significantly more attractive in 2025.
How PERA works
- You open a PERA account with an accredited administrator: a bank, broker or fund company approved by the BSP or SEC.
- You contribute any amount you like up to the annual limit, as often as you like.
- Your money is invested in PERA-eligible products you choose: funds, government bonds and, with some administrators, stocks or ETFs.
- You claim a 5% tax credit on contributions.
- You withdraw tax-free after 55, provided you've contributed for at least five years.
The tax benefits
| Benefit | What it means |
|---|---|
| 5% tax credit | 5% of your annual contributions, issued as a tax credit certificate usable for national taxes |
| Tax-free investment income | No tax on interest, dividends or gains earned inside the account |
| Tax-free qualified withdrawals | No tax when you withdraw after 55 with at least 5 years of contributions |
| Employer contributions (new) | Employers can contribute and deduct it, with an extra deduction if they meet CMEPA's conditions |
Example: you contribute ₱10,000 a month (₱120,000 a year).
- Tax credit: 5% × ₱120,000 = ₱6,000
- If your investments earn interest, dividends or gains, none of it is taxed while inside PERA. Outside PERA, interest would be taxed 20% and dividends 10%.
Contribution limits after CMEPA
| Before July 2025 | From July 1, 2025 | |
|---|---|---|
| Resident Filipinos | ₱100,000 a year | ₱200,000 a year |
| Overseas Filipinos | ₱200,000 a year | ₱400,000 a year |
The higher overseas limit makes PERA especially useful for OFW financial planning.
Withdrawal rules
Qualified withdrawal: you are at least 55 years old and have made contributions for at least five years. You can take the money as a lump sum or in installments, tax-free.
Early (unqualified) withdrawal: you'll generally have to:
- return the tax credits you received,
- pay the taxes that would have applied to the investment income, and
- pay applicable penalties or administrator fees.
Exceptions apply for death, and for permanent total disability or hospitalization under the rules. In practice, only put money in PERA that you're sure you won't need before 55.
What you can invest in
Depending on the administrator:
- PERA UITFs and mutual funds: money market, bond, balanced, equity and index funds
- Government securities, including some Retail Treasury Bond offers through PERA platforms
- PSE-listed stocks and ETFs, with some broker-administrators
For long horizons, a low-cost equity index or balanced fund is a common core choice. See index funds in the Philippines and UITF vs mutual fund.
How to open a PERA account
- Choose an administrator. Compare their fund menu, fees, minimum contribution and app experience. The BSP and SEC publish lists of accredited PERA administrators.
- Prepare requirements: valid ID, TIN, and for OFWs, proof of overseas work.
- Apply online or at a branch. Complete the risk profile.
- Fund your account and choose your investments.
- Claim your tax credit: your administrator provides the documents; tax credit certificates are processed through the BIR. Some administrators assist with the process.
Who should use PERA?
PERA makes most sense if you:
- already have an emergency fund and no high-interest debt;
- want retirement income beyond your SSS pension;
- are at least 10 years from 55, so investments have time to grow; and
- can commit money until retirement.
If you need more flexibility, a regular investment account or Pag-IBIG MP2 may suit you better. Many people use both: MP2 for medium-term goals and PERA for retirement.
Frequently asked questions
How much is the PERA tax credit?
5% of your PERA contributions for the year, up to the annual contribution limit. Contributing ₱200,000 gives a ₱10,000 tax credit certificate, which can be used to pay national internal revenue taxes but is not paid out as cash.
Can I withdraw my PERA before age 55?
You can, but an early (unqualified) withdrawal means returning the tax credits you received, paying tax on the investment income that was exempt, and possible penalties, except in cases such as death or permanent disability. Treat PERA as money for retirement only.
Who can open a PERA account?
Filipinos with a Tax Identification Number who have the legal capacity to contract, whether employed, self-employed or overseas. Foreign residents with a TIN may also be eligible under the rules.
What can I invest in through PERA?
PERA-eligible products such as UITFs and mutual funds designated for PERA, government securities, and, depending on the administrator, shares listed on the PSE and exchange-traded funds. Each administrator offers its own menu.
Can my employer contribute to my PERA?
Yes. CMEPA allows private employers to contribute to employees' PERA accounts and claim a tax deduction, including an additional deduction if they contribute to all eligible employees and at least match employee contributions.
Sources
Figures checked against these official and primary sources on October 4, 2026. Government rates and promos change, so confirm on the agency's site before you act.
- Grant Thornton Philippines: Encouraging retirement savings through PERA under CMEPA
- Republic Act No. 9505, Personal Equity and Retirement Account Act of 2008
- Bangko Sentral ng Pilipinas: PERA information
- Bureau of the Treasury: RTB 32 available via PERA platforms
General information, not personal financial, tax or legal advice. See our editorial standards and disclaimer. Found an outdated figure? Email support@success.ph.