Filipinos can now put a familiar bank product to work for retirement without taking on stock market risk.
Retirement planning may soon become easier for Filipinos who prefer stable and familiar financial products. On August 20, 2026, the Bangko Sentral ng Pilipinas (BSP) issued Memorandum No. M-2026-044, allowing qualified banks to offer time deposits as investment products under the Personal Equity and Retirement Account (PERA).
The move gives Filipino savers another way to build retirement funds while taking advantage of PERA’s tax incentives.
Instead of choosing only market-linked investments such as stocks or unit investment trust funds (UITFs), contributors can use a traditional time deposit within their PERA account. This is particularly useful for people who want to protect their savings from market volatility while still allowing their money to grow over time.
To many Filipinos, especially those who are cautious about investing, time deposits are easier to understand than financial products whose returns can rise and fall with the market.
The new option also comes as PERA participation continues to grow. BSP data cited that PERA contributions reached ₱757.55 million in the first half of 2026, a 45.3% increase from the previous year, while active contributors rose to 30,055.
What is PERA and What is the Law Behind it?
The Personal Equity and Retirement Account (PERA) is a voluntary retirement savings program established under Republic Act No. 9505.
The law created PERA to help Filipinos build additional retirement savings on top of government pension programs such as the Social Security System (SSS) and Government Service Insurance System (GSIS), as well as employer-sponsored retirement plans.
It is important to distinguish the law from the new BSP rule. Republic Act No. 9505 is the law that established PERA, while BSP Memorandum No. M-2026-044 provides the new regulatory framework allowing qualified banks to offer time deposits under PERA.
Under the new rules, PERA time deposits must have a minimum maturity of 30 days. When a time deposit reaches maturity, its principal and interest can remain within the PERA account.
The contributor can then roll over the money, reinvest it in another time deposit, or transfer it to another eligible PERA investment without treating the transaction as an early retirement withdrawal.
The funds remain subject to the rules governing PERA, including contribution limits, withdrawal conditions, and applicable tax incentives.
Banks also cannot simply begin offering these products without meeting regulatory requirements. They must satisfy applicable BSP prudential standards, notify the central bank of their plans, secure accreditation from the Bureau of Internal Revenue (BIR), and work with an accredited PERA administrator.
The Tax Benefits: Why PERA Can Beat a Regular Time Deposit
The biggest attraction of placing a time deposit inside a PERA is the program’s tax treatment.
- 5% Annual Tax Credit. Local contributors can contribute up to ₱200,000 per year, while overseas Filipino workers (OFWs) can contribute up to ₱400,000. At the maximum OFW contribution, the potential tax credit can reach ₱20,000.
- 100% Tax-Exempt Growth. Interest earned through eligible PERA investments, including PERA time deposits, can benefit from the program’s tax exemptions. This is different from ordinary bank time deposits, where interest is generally subject to final withholding tax.
The tax advantage becomes more meaningful when savings remain invested for many years. Instead of losing part of the interest to taxes each year, more of the earnings can remain invested and potentially generate additional returns.
PERA also provides a retirement-focused withdrawal benefit. Qualified withdrawals made after the contributor reaches age 55 and has completed at least five annual contributions can be exempt from income tax. This is commonly described as the 55/5 rule.
For someone saving specifically for retirement, these incentives can make a PERA time deposit more attractive than keeping the same money in an ordinary taxable deposit account.
Why OFWs and Conservative Savers Should Pay Attention
The new PERA time deposit option could be especially valuable to OFWs. They have an annual PERA contribution ceiling of ₱400,000, twice the ₱200,000 limit for local contributors.
For OFWs who already understand time deposits and prefer conservative investments, the new option may remove one of the biggest barriers to PERA participation. They do not necessarily need to become experienced stock market investors to begin building a tax-advantaged retirement fund.
BSP Deputy Governor Lyn I. Javier highlighted the accessibility of the new product, saying, “Retirement planning should be simple, accessible, and within reach of every Filipino.”
By introducing PERA time deposits, we are providing another practical option for individuals who want to build their retirement savings through a product they already understand and trust. The growth of PERA participation also suggests increasing awareness of voluntary retirement savings.
However, availability will depend on banks completing the required accreditation and partnerships. Savers should therefore check whether their preferred bank is already qualified to offer PERA time deposits before making plans.
How Filipinos Can Start Building a PERA Time Deposit
Getting started involves several steps. First, a contributor should check whether a bank is qualified to offer PERA time deposits and whether it works with an accredited PERA administrator.
The saver then needs to open a PERA account if they do not already have one. This account is separate from a normal bank savings or time deposit account.
Once the PERA is established, the contributor can select an eligible time deposit as an investment. The minimum maturity is 30 days, although the appropriate term will depend on the contributor’s financial goals and cash-flow needs.
When the time deposit matures, the proceeds can remain inside the PERA. The contributor may reinvest the funds in another time deposit or move them to another eligible PERA investment, depending on their retirement strategy.
It is also important to remember that PERA is intended for long-term retirement savings. Contributors should understand the applicable contribution limits, withdrawal rules, taxes, fees, and investment conditions before committing their funds.
Beyond Retirement: DOPAY for Everyday Money Transfer
As Filipinos become more intentional about managing their finances, having both long-term and everyday financial tools can make money management more accessible. PERA time deposits provide a conservative option for retirement savings, while DOPAY offers a convenient way to move money from and to the Philippines.
DOPAY, a BSP-licensed financial institution, is your trustworthy e-wallet for sending, receiving, and managing money more convenient for Filipinos at home and abroad.
With DOPAY, OFWs can send money from anywhere, including Japan, Hong Kong, Dubai, and beyond, to the Philippines quickly and affordably while enjoying secure and transparent transactions.
For our beloved OFWs, DOPAY guarantees peace of mind. Simply top up your DOPAY wallet and send funds directly to your family’s DOPAY wallet in pesos, all within the app.
And with DOPAY’s Crypto Wallet, users can earn crypto rewards through the Trade & Earn program. Plus, the Refer & Earn program opens new opportunities for Filipinos to boost their income with every successful referral.
Download the DOPAY app today!
