The Securities and Exchange Commission (SEC) expects an increase in Filipinos’ retirement savings under the Personal Equity and Retirement Account (PERA) programme, following the enactment of Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA).

A key provision of the new law grants a 50% additional tax deduction to private employers who contribute an amount equal to or greater than their employees’ PERA contributions.

Established by a 2008 law, PERA is a voluntary retirement savings programme that supplements existing benefits from the Social Security System and other pension plans.

“The CMEPA strengthens the role of PERA by offering stronger incentives for long-term savings,” SEC Chairperson Francis Lim said. “It encourages companies to support their employees’ retirement planning while simultaneously increasing the capital available in the financial system, stimulating the local stock market.”

The CMEPA also introduces several tax reforms to make the local market more competitive. One of the most significant changes is the reduction of the stock transaction tax to 0.1 percent from 0.6 percent.

The law also reduces the documentary stamp tax on the original issuance of shares and standardises the final withholding tax on interest income at 20 percent.

“At its core, CMEPA is designed to align the Philippine capital markets more closely with regional peers by removing long-standing barriers to investor participation,” Chairperson Lim added.

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