EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
•! t|)e 
crrtirf
S E N A T E
S. B. No. 768
*19 JUL 24 P5:10
Introduced by Senator SONNY ANGARA
AMENDING SECTIONS 5 AND 8 OF REPUBLIC ACT NO. 9505, OTHERWISE 
KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA) 
LAW AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Republic Act No. 9505 or the Personal Equity and Retirement Account (PERA) 
Act was signed into law in 2008. This law, which my father and I worked on during 
the 14th Congress, establishes a framework wherein banks offer long-term savings 
plans coupled with, sound investment options that enjoy tax incentives—all designed 
to help Filipinos achieve a comfortable and financially secure retirement.
The scheme seeks to encourage Filipinos to save and prepare for their 
retirement by giving PERA holders several tax incentives, including an income tax 
credit equivalent to five percent (5%) of the total PERA contribution and tax- 
exemption of investment earnings from PERA savings. A private employer may also 
contribute to its employee's PERA to the extent of the amount allowable and such 
contribution shall be allowed as deduction from the employer's gross income.
The PERA law was envisioned to provide Filipinos an alternative option for 
their retirement plans other than the ones available under the Government Service 
Insurance System (GSIS), the Social Security System (SSS) or the Pag-IBIG Fund. 
However, despite being passed more than a decade ago, the PERA law was formally 
launched by the Bangko Sentral ng Pilipinas only on December 16, 2016.
While PERA's launching is a welcome development, more Filipinos need to be 
enticed into saving and investing into their future. According to the 2018 Manulife 
Investor Sentiment Index, our countrymen only set aside 3.6 months' worth of


personal savings for retirement on average—the lowest among the 8 eight Asian 
countries in included in the survey.
Hence, this proposed bill aims to make PERA more attractive by increasing the 
maximum allowed annual contributions entitled to tax incentives from P100,000 to 
P200,000 (up to P400,000 for Overseas Filipino Workers (OFWs). Instead of a five- 
percent (5%) income tax credit, this bill proposes to treat PERA contributions as 
deductions from gross income. Hopefully, with such changes, more Filipinos would 
be encouraged to invest in PERA, which will not only foster savings but also promote 
capital market development—two crucial factors in sustaining our economic growth.
In view of the foregoing, the passage of this bill is earnestly sought.
SONNY ANGARA


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHIUPPINES 
)
First Regular Session 
)
S E N A T E
s. B. No. 768
^cu a i? ’
of tljc w ti. tarj>
•If JUL24 P5 00
a ObV-
Introduced by Senator SONNY ANGARA
AN ACT
AMENDING SECTIONS 5 AND 8 OF REPUBLIC ACT NO. 9505, OTHERWISE 
KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA) 
LAW AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled:
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
Section 1. Section 5 of Republic Act No. 9505 is hereby amended to read as
follows:
"Sec. 5. Maximum Annual PERA Contributions. -  A Contributor may 
make an aggregate maximum contribution of [0f)e] TWO hundred 
thousand pesos [ (P100,000709)] (P 200,000.00) or its equivalent in 
any convertible foreign currency at the prevailing rate at the time of 
the actual contribution, to his/her PERA per year: Provided, That if the 
Contributor is married, each of the spouses shall be entitled to make a 
maximum contribution of [One] TWO hundred thousand pesos 
[ (P100,000.00)] (P 200,000.00) or its equivalent in any convertible 
foreign currency per year to his/her respective PERA Provided, further. 
That if the Contributor is an overseas Filipino, he shall be allowed to 
make maximum contributions double the allowable maximum amount.
A Contributor has the option to contribute more than the 
maximum amount prescribed herein: Provided, That the excess shall 
no longer be [ entitled to o tax credit of five percent (5% )] ALLOWED


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
AS DEDUCTION FROM GROSS INCOME, AS PROVIDED IN  
SECTION 8 OF THIS ACT.
The Secretary of Finance may adjust the maximum contribution 
from time to time, taking into consideration the present value of the 
said maximum contribution using the Consumer Price Index as 
published by the National Statistics Office, fiscal position of the 
government and other pertinent factors."
Sec. 2. Section 8 of Republic Act No. 9505 is hereby amended to read as 
follows:
"Sec. 8. Tax Treatment o f Contributions. -  [The Contributor shall-be 
given on ineemc tax credit equivalent to five percent- (S^/o) of the tetet 
PERA contribution: Provided, however, That in no instance con there 
be any refund of the said tax credit arising from the PERA 
contributions. If the Contributor is on overseas Filipino,- 
entitled to claim tax credit from
emended] 
FOR 
INCOME 
TAX 
PURPOSES, 
PERA 
CONTRIBUTIONS UP TO THE MAXIMUM AMOUNT PRESCRIBED 
IN  
SECTION 
5 
OF THIS ACT SHALL 
BE 
ALLOWED AS 
DEDUCTIONS FROM GROSS INCOME OF EACH CONTRIBUTOR: 
PROVIDED, HOWEVER, THAT ANY EXCESS IN  THE MAXIMUM 
AMOUNT SHALL NO LONGER BE ALLOWED AS DEDUCTIONS 
THEREOF.
Sec. 3. Implementing Rules and Regulations. -  The Bureau of Internal 
Revenue (BIR) shall issue the implementing rules and regulations regarding all 
aspects of tax administration relating to PERA: Provided, That individuals earning 
purely compensation income, as defined in Section 32 (A)(1) of the National Internal 
Revenue Code (NIRC), as amended, derived from sources within the Philippines, the 
income tax on which has been correctly withheld under the provisions of Section 79 
of the NIRC, as amended, and will be a Contributor to a PERA are still not required 
to file an income tax return but are subject to substituted filing: Provided further. 
That the BIR shall issue the necessary rules and regulations in relation to this matter


1 
such that correct taxes are withheld and/or collected: Provided finally, That the
2 
failure of the concerned agencies to promulgate the said rules and regulations shall
3 
not prevent the implementation of this Act upon its effectivity.
4 
Sec. 4. Separability Clause. -  If any portion or provision of this Act is
5 
subsequently declared invalid or unconstitutional, other provisions hereof which are
6 
not affected thereby shall remain in full force and effect.
7 
Sec. 5. Repealing Clause. -  All other laws, acts, presidential decrees,
8 
executive orders, presidential proclamations, issuances, rules and regulations, or
9 
parts thereof which are contrary to or inconsistent with any of the provisions of this
10 
Act are hereby repealed, amended, or modified accordingly.
11 
Sec. 6. Effectivity. -  This Act shall take effect fifteen (15) days after its
12 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,