Guide to PERA Investment Instruments

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It’s been almost 3 years since the implementation of Personal Equity Retirement Account or PERA at the end of 2016. Up to this time, most Filipinos are still in the dark about what PERA means and what it can do for them in their retirement.

Many of those who have heard of PERA opt to avoid putting their money in it due to a combination of lack of information regarding PERA investment instruments and confusion on how PERA fits in their financial plans.

Earlier this year, I wrote a primer on PERA and why all of us need it asap. I’m happy to say that it is one of my most popular posts and second most active in terms of reader engagement (thanks to all you *hennys* who asked questions!).

Now, I’m going to slowly dive into the nitty-gritty of PERA with this guide to PERA investment instruments.

So before we proceed, please go back and read my primer to PERA first. Otherwise, you might be confused about what I’m going to say in this post.

To recap, PERA stands for Personal Equity Retirement Account. It is a scheme that allows Filipinos to voluntarily invest for their retirement.

Among the benefits are: gains will not be taxed, getting an income tax credit equivalent to 5% of your annual investment, exemption of your PERA investments from insolvency or bankruptcy, among others.

It’s a great way to invest for retirement slowly, especially for young workers who still have decades before they retire.

The Bangko Sentral ng Pilipinas (BSP) allows the following instruments to be PERA-qualified:


  • UITFs
  • Mutual Funds
  • Annuity Contracts
  • Insurance Pension Products
  • Pre-need Pension Plans
  • Publicly listed stocks or other securities in the Philippine Stock Exchange
  • Exchange-traded bond
  • Government securities and
  • Other instruments that the BSP may allow after deliberation


So far, there is only a handful of UITFs that the BSP allows to be sold under the PERA scheme.

As of August 2019, only two banks, Bank of the Philippines (BPI) and Banco de Oro (BDO) offer PERA-qualified UITFs. Land Bank will soon launch its own PERA UITFs, but there’s still no information on the launch date.



If you are looking for an alternative PERA investment instrument, you’re out of luck. It seems that banks are focusing on UITFs at the moment and there’s no buzz on whether or not they will actually offer other investment instruments in the near future. 

Seeing the way that the BSP and other implementing government agencies fail to educate the public about the importance of PERA, I can’t really blame them.

Why would financial institutions waste their time and resources on developing products that nobody will buy?

Money Market

At this time, there are three (3) PERA-qualified money-market UITFs. BPI and BDO UITFs are already being sold. Land Bank’s will be launched soon. See the details of the respective UITFs on the table below. Please use the slider at the bottom of the table to see the information for Land Bank’s fund.

BPI Money Market FundBDO PERA Short Term FundLand Bank PERA Money Market Fund
StrategyProvide returns in excess of the return of the 91-day Philippine Treasury Bills Capital preservation, income generation and liquidityHigh liquidity and decent returns from short-term and flexible investments
Mgmt Fee0.5% p.a.0.50% p.a. 0.20% p.a
Other Fees2.0840% – External Auditor Fees (Source: 28 June 2019 KIIDS)To be updated one has access to additional KIIDS in the following months. BDO only has the latest and previous months available on their site.Information not available but Declaration of Trust provides for fees for third parties under Article X. (Source: Declaration of Trust)
Launch Date19 December 201627 June 2017Launching soon
Underlying securitiesMore or less 90% of holdings are in Fixed Rate Treasury Notes – Government Debt ; 6% in Time deposits and the money market (Source: 28 June 2019 KIIDS)More or less 80% in fixed rate government treasury bills (Source: 28 June 2019 KIIDS) 100% Special Deposits Account
Min Holding PeriodNone30 calendar days 30 calendar days
Early Redemption FeeNone0.50% of the original participation amount 25% of the net earnings of the redeemed principal but not less than Php 500
Initial InvestmentPhp 1,000Php 1,000Php 5,000
Minimum InvestmentPhp 1,000Php 1,000Php 1,000
Benchmark91 Day Treasury Bills 91-Day Treasury Bills Percentage change in Bloomberg Philippine Sovereign Bond Index Money Market or, in its absence, any relevant and industry accepted benchmark

As you can see, out of the three money market UITFs, Land Bank’s offer is very different compared to the offers of other two banks (again, if you can’t see the Land Bank information, use the slider at the bottom of the table).

Not only will Land Bank only have 0.20% in annual management fees, the underlying instrument will also be a special deposits account. Both BPI and BDO charge 0.50% in annual management fees and are invested in 91-day treasury-bills.

Now, I don’t know how the Land Bank fund will work since there is no information available yet about its special deposits account. Plus, I can’t find any information online about its prospective benchmark.

But I think if for some reason you want to invest in a money market fund, Land Bank’s offering may be a great option. Given that returns on t-bills are usually low and don’t even match, let alone surpass, inflation, the .05% annual management fees PLUS other associated fees will eat up whatever little gain you will receive. Land Bank’s 0.20% fees (plus external fees) is so much more attractive.

If external fees for all money market UITFs will be around the same percentage across the three banks, I don’t see any reason why anybody would want to put their retirement money in a money market UITF. Not unless their goal is to actually have less money compared to when they started. The 2.0840% external auditor fees charged against the BPI fund is absolutely ridiculous.


Currently, there are four (4) bond PERA offerings: 2 from BPI, and 1 each from BDO and Land Bank. BPI has separate offerings for Philippine corporate bonds and Philippine government bonds. BDO’s UITF is almost completely invested in Philippine government bonds while Land Bank does not have any specific information about its ratios yet.

Please use the slider at the bottom of the table to see the rest of the information.

BPI PERA Government Bond FundBPI PERA Corporate Income FundBDO PERA Bond Index FundLand Bank PERA Bond Fund
Strategy/GoalsCapital appreciation and income from portfolio of long-term fixed income securities issued by the government of the Philippines Provide returns in excess of the return of the BPI Philippine Corporate Bond IndexTrack the total return of the Markit iBoxx ALBI Philippines 1-5 (Domestic) IndexGenerate steady stream of income through investments in a diversified portfolio of peso-denominated fixed income securities
Management Fee1.00% p.a. 1.25% p.a.1.00% p.a. 1.00% p.a
Other Fees1.1428% External Auditor Fees (Source: 28 June KIIDS)1.28% (External Auditor Fees (Source: 31 July KIIDS)To be updated one has access to additional KIIDS in the following months. BDO only has the latest and previous months available on their site.Information not available but Declaration of Trust provides for fees for third parties under Article X. (Source: Declaration of Trust)
Launch Date19 December 201616 December 201627 June 2017Launching soon
Underlying securities95% in Philippine government bonds. Around 94% in Philippines corporate bonds99.97% Philippine government securities100% fixed income securities diversified into tradable Philippine government securities, corporate bonds, and bank deposits
Minimum Holding PeriodNoneNone30 calendar days 30 calendar days
Early Redemption FeeNoneNone1.00% of original participation amount25% of the net earnings of the redeemed principal but not less than Php 500
Initial InvestmentPhp 1,000Php 1,000Php 1,000Php 5,000
Minimum InvestmentPhp 1,000Php 1,000Php 1,000Php 1,000
BenchmarkBPI Philippine Government Bond IndexBPI Philippine Corporate Bond IndexMarkit iBoxx ALBI Philippines 1-5 (Domestic) IndexPercentage change in the Bloomberg Government Bond Index AI (All In), or, in its absence, any relevant and industry accepted benchmark

Three of the funds: BPI PERA Government Bond Fund, BDO PERA Bond Index Fund, and Land Bank PERA Bond Fund charge 1.00% annual management fees plus external fees. The BPI PERA Corporate Income Fund charges 1.25% annual management fee plus external fees.

Much like the money market UITFs, I don’t see any reason why anybody would want to put their retirement money in bond UITFs, especially if their retirement horizon is 20-30 years from now. The gains are too small and will be eaten up by inflation. The only reason why you would want to put a portion of your money to a bond UITF is if (1) you are around 5 years away from your retirement or (2) you’re 5 years or so away from turning 55, which is the minimum age the BSP allows withdrawal without penalty, and you want to withdraw your entire investment by then.


Both BPI and BDO offer equity UITFs. BPI’s is actively managed while BDO is an index UITF.

BPI PERA Equity FundBDO PERA Equity Index Fund
StrategyLong term capital growth derived from portfolio of equities by Philippine domiciled companies. Provide returns in excess of the PSEi.Track the performance of PSEi
Management Fee1.50% p.a1.00% p.a
Other Fees1.59% External Auditor Fees (Source: 28 June KIIDS)To be updated one has access to additional KIIDS in the following months. BDO only has the latest and previous months available on their site
Launch Date16 December 201622 December 2016
Underlying securitiesHoldings in 27 biggest companies in the PSEPSEi
Minimum Holding PeriodNone30 calendar days
Early Redemption FeeNone1.00% of original participation amount
Initial InvestmentPhp 1,000Php 1,000
Minimum InvestmentPhp 1,000Php 1,000
Tracking errorUndisclosed1.44% (self reported; since inception)

Among all the available PERA investment instruments so far, I think this is the best in terms of returns. Although I personally have my PERA account with BPI (a huge mistake on my part which I can’t wait to undo), I would choose to put my retirement money in the BDO PERA Equity Index Fund.

The annual management fee is lower at 1.00% AND it tracks the Philippine Stock Exchange index (PSEi) while BPI’s UITF is actively managed.

What I just can’t understand with BDO’s PERA index UITF is why is its tracking error so high? If you’ve read my guide to Philippine Index Funds, the lower the tracking error, the better the fund is able to track its index. This is just so surprising to me because BDO has a non-PERA index UITF and it seems to be tracking the PSEi way more accurately.

I just hope for the sake of its PERA investors that the managers of the BDO’s PERA index UITFs get their shit together. It’s not as if they need to think of some brilliant strategy to copy the PSEi. It can be even be automated!

Still, compared to the BPI PERA Equity Fund, BDO’s returns are still comparatively higher.

Dollar Denominated

So far, there’s only 1 dollar-denominated PERA UITF and it’s yet to be launched.

Land Bank PERA Global Fund
StrategyGenerate relatively higher income through investments in Dollar-denominated fixed income securities issued by the Philippine national government and by local companies
Management Fee1.00% p.a.
Other FeesInformation not available
Launch DateLaunching soon
Early Redemption Fee25% of the net earnings of the redeemed principal but not less than USD 10.00
Minimum Holding Period30 calendar days
Initial InvestmentUSD 200.00
Minimum InvestmentUSD 100.00
BenchmarkJP Morgan Asia Credit Index (JACI), or in its absence, any available relevant or similar benchmark

At first glance, this UITF is exciting because it’s a dollar-denominated instrument. Nope. It’s going to invest in US dollar-denominated bonds and fixed income securities issued by the Philippine government and local companies. So compare it to the bond UITFs I discussed above, only in dollars.


Despite the lack of options, I think all of us should be investing in a PERA account right now. I personally think the best way for young people to invest for retirement is by putting their money in a low-cost index fund.

I’ve heard of some people saying that they will wait until more financial institutions offer PERA investment instruments or until the Bureau of Internal Revenue (BIR) give the go-signal for the issuance of the income tax credit.

Both concerns are valid. But, knowing how slowly the implementation of laws happen and how slowly Philippine financial institutions offer more options for PERA investment instruments or better options in general (see: extortion-level high annual management fees charged by mutual funds and UITFs), I don’t think both are going to happen in the next 5 or maybe even 10 years.

Remember how long it took for the BSP to finalize the PERA implementing guidelines?

The PERA Law or Republic Act 9505 was passed in 2008 and it was only implemented at the end of 2016. That’s 8 years.

Basically, people were only able to invest in PERA in 2017. If we wait until the government and the financial markets are all lined up before investing for retirement, we would lose around 10-ish more years.


To illustrate the differences in gains, I’m using this table I generated from a compounding interest calculator online. Excuse the US$ since I got this from a US site. The underlying calculations should be the same.

So say you invest the maximum amount every year, which is Php 100,000 (for those based in the Philippines; Filipinos based abroad can invest up to Php 200,000).

We will assume that the PERA equity index fund of your choice has an average annual return of 10%, which is achievable for PSEi.


Compounded interest 30 years

If you invest regularly for 30 years, your money would have grown to Php 19.839 million from your total contribution of Php 3 million. But if you invested for only 20 years (because you were waiting for the perfect time before getting in), you only get Php 6.972 million in your retirement, from your total contribution of Php 2 million.
This is even worse if you were only invested for 10 years. From your total contribution of Php 1 million, you only get Php 2.012 million.

So if you’re in your 30s or 40s now, it’s not in your best interest to delay investing in PERA.

You might be thinking that this is not applicable to you since you’re still in your 20s and you have more than 40 years to invest. I know I have readers who are in their early 20s or in their teens.

Well, actually, if you invest longer and leave your money to compound for 40 years, you get Php 53.211 million from your total contribution of Php 4 million.

That’s so much higher than what you can expect to get from SSS (Social Security System) or GSIS (Government Service Insurance System).

Remember, in investing, time is your best friend.

What do you think about investing in PERA? Please let me know in the comments.

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Guide to PERA financial instruments
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Katie Scarlett

is a personal finance advocate working towards achieving financial independence and early retirement (FIRE).

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25 Responses

      1. I just opened an account with BDO. Sana maayos nila ang system at management ng funds na to at hindi mawala na parang bula ang perang pinaghirapan.

  1. Hi, this was very informative which makes me want to open a PERA acct. Also, I read sa primer mo on PERA accts that you need to hold your investment for atleast 5yrs or until you retire at 55yrs old unless due to unforseen events like death or disability. I also saw that may Holding period ang kada acct type. For example, I opened a PERA acct under BDO equity index with a holding period of 30 days. Though wala naman akong plan magwithdraw prematurely, but what if:
    1. I would like to withdraw past 30days, but less than 5yrs or 55yrs old, will I still incur early redemption fees like regular UITF’s and MF’s?
    2. Also, can I withdraw the full amount or just a part of it?

    1. Hi DJ,

      1. If you withdraw past the 30 days, you will be subject to taxes just like when you sell regular UITFs and MFs. If you claimed tax credit, you would have to pay that back.
      2. Do you mean if you have to withdraw the full amount when you retire? You don’t have to. You can withdraw a part and leave the rest in the fund. But if you opt to withdraw everything when you retire, you can do that too.

      Katie Scarlett

  2. Good day got this from another finance blog “the available investment under PERA is UITF. And to clarify, when you redeem a UITF (not under PERA) there will be no taxes. Redemption of UITF are not subject to taxes.” So my question is that will it be redundant to invest in PERA when I could just invest in a typical UTIF not under PERA considering they are both not taxed? thanks

    1. Hi Vincent,

      Proceeds from the sales of MFs are not considered part of a person’s gross income, hence, no income tax will be collected from it. But, there have already been taxes collected from the sale/exchange of underlying assets of MFs, which the investor does not have to pay directly but has already been computed on the fund’s value. For example, let’s consider 2 equity funds, 1 is under PERA and the 1 not under PERA.

      For the fund not under PERA, every time it trades on stocks, it is charged a 0.06% stock transaction tax on the total value of the trade. Imagine how many times a fund performs a trade in the course of a year. Now all of these stock transaction taxes collected by the BIR from your fund will already be computed into the fund’s value. So even though no taxes will be collected from you directly when you withdraw from your fund, taxes have already been paid to the government. It’s like invisible taxation, at least from the investor’s point of view. You think you’re not paying taxes but you actually are and it’s eating your investment’s gains.

      Meanwhile, Section 9 of the PERA Act says that “All income earned from the investments and reinvestments of the maximum amount allowed herein is tax-exempt.” So you keep all your money without taxes deducted from it, “invisible” or otherwise.

      Katie Scarlett

  3. Hi Miss Katie,

    Would like to kind inquire to which BDO investment tool would you prefer? Equity seems a good choice for good ROI. However, you were wary that BDO managers must take caution on handling the equity funds. I am actually planning to open a PERA but I am being skeptical of my future investment.

    By the way, your post was very informative. Thank you!

    1. Hi Kirk,

      I still prefer the BDO equity index fund since this PERA is for the long-term. I’m just concerned that the managers are not able to closely match the PSEi but I also hope they iron out the kinks since they have only been in operation for 2-3 years.

  4. ‘BPI and BDO UITFs are already being sold’ – I’m intrigued by this statement. I’m subscribed to BPI Equity Index fund. Where can I get more info about this?

    Also, can you make a guide on how to enroll in PERA for BDO? Thanks.

    1. Hi Stephen,

      You can visit the websites linked on the Post, which should direct you to the PERA-qualified instruments of both banks.

      Sure, I can make a guide on how to enroll for a BDO-PERA account with the walkthrough of the process.

  5. Hi Katie, very informative post, thank you. I actually found you on reddit when i stumbled upon r/phinvest a month ago and now I can’t think of anything but securing my future. I have a BDO account and now I want to invest on their BDO PERA Equity, but I would just like to clarify this, if you’re familiar:

    “DISCLOSURES: BDO Unit Investment Trust Funds (UITFs) are not deposits but trust agreements. They are not obligations of nor guaranteed by BDO and are not insured by the PDIC.”

    Does this mean, in the event that the administrator goes bankrupt, there’s a possibility that our fund value will lessen/get damaged? Thanks in advanced!

  6. Hi! I just recently discovered your blog and have been reading your posts religiously. I’m 24 years old and working abroad so I’ve been looking into several investments that I can make while I’m still relatively young. What really got my attention was MP2 and PERA. I just have some questions which I hope you can help me with.
    1. If I start contributing starting now at 24 years old, does that mean I have to wait until 55yrs old until I can withdraw something from my account (despite starting really earlier)?
    2. I plan on contributing the maximum amount possible but just in case I can’t fulfil that for some reason, will it matter that the amount I contribute differs yearly?
    3. In the article, you assumed 10% return but is this factual (as in based on previous records) or just an assumption?
    4. How much is the risk when it comes to losing the money you placed in the account?

    I really hope you can help me with my questions. And thank you so much for existing! I really want to save up for my future as soon as possible so your posts and detailed explanations give me so much joy.

    1. Dear Ann,

      1. For PERA, yes, you have to wait until you are 55 years old before you can start withdrawing from your PERA account. The reason is that PERA is supposed to fund your retirement, which typically happens after 55 years for most Filipinos. For MP2, the account will mature in 5 years, no matter what your age is.
      2. No, as long as you contribute at least 500pesos every time in MP2. For PERA, the minimum contribution is 1,000 a year. If you already have accounts with both MP2 and PERA and you fail to add to whatever is already on the account, there’s no problem (apart from the fact that you have less money in the account).
      3. For this article, I used Philippine Stock Exchange index (PSEi) funds. Actually, this is a moderate estimate since according to my calculations, Year-on-year returns of PSEi historically averaged around 14-15%. I will write an article about this soon.
      4. If you’re referring to PERA-PSEi index fund account, the risk is the same as investing in a PSEi mutual fund/UITF/ETF.


  7. Hi katie! In this article, you suggested opting for the BDO PERA Equity Index Fund since it has higher yield. I also read your article on index funds and have decided to invest in FMETF long term using peso cost averaging method. Is it advisable to invest in BDO PERA Equity Index Fund while investing in FMETF? Should I just be choosing one? FMETF has lower fees but I find the tax exemption of BDO PERA Equity Index Fund appealing.

    For context, I’m 22 years old and just starting to invest; i know I’ve got ample time before retirement. Reading your articles has been really helpful against anxiety regarding my finances. It’s also made me execute actionable steps towards improving my situation. For now, I’ve decided to focus investing on MP2 and FMETF. Hopefully in the future you can make an article on how to diversify investments. Sincerely, thank you for all the insights! 🙂

  8. Hi Katie! I’m reading up on the pros and cons between BPI’s and BDO’s PERA equity fund for the last few weeks now.
    You mentioned that signing up to BPI’s was a “huge mistake” and you’d rather go with BDO’s fund.
    Is it simply because of the difference in the management fee or are there other reasons, fundamental or strategy-wise?
    I also notice that BPI’s NAVPU is currently valued at Php 0.82 while BDO is at Php 83.8. Are you familiar with the implications of these values? Kindly share if you know.:)
    Thank you and more power!

    1. Jeremy,

      It’s because of both: I’d rather invest in an index fund instead of an actively managed fund and the difference between their management fees.

      Regarding the NAVPU, since they’re different kinds of equity funds, this simply means the funds have different values. It’s the total asset divided by the number of shares. Buying shares based on NAVPU is not a sound decision because it does not mean that one has higher value than the other. A higher price does not mean it’s more valuable, and vice versa. You’d still be better off basing your decisions on other factors such as fund type and fund expenses.
      But a direct comparison between an actively managed fund and an index fund

  9. Hi there, can I ask if I can just deposit whatever money I have left to pera? For example, on january I have 3000 pesos and february let’s 2000pesos and so on? Is it advisable to do that? I’m not and ofw so my income is not that high to invest but I can set aside every month for whatevers left of my money and I don’t have work now. Thank you.

  10. Hi there, is there a minimum amount to deposit to PERA so it will be “sulit”? Example its advisable to deposit 8000 on FMETF to maximize brokerage fee, is there something similar to PERA? Thank you!

  11. I kinda disagree with PH Equity Funds. Currently PH Equity Funds are down -10%+ unlike the Bond Funds which are up 10%+ from 3yrs cumulative performance. If you look at the charts. PSEI is ranging at the 6k levels which is the same range in 2015-2017. That means your money if you invested at the start of PERA didn’t even earn that much, much worse if you started 2019 and you’re fund is down in the negative territory.

    If you don’t trust the govt or the economy going forward, better put it on a Pera Bond Fund.

    1. @teokun Very convenient of you to criticize equity funds in 2021, where majority of the world’s markets are either down or consolidating. Equity funds inherently carry more risk than fixed income/bond funds so you’re right that if you’re scared to take on risk, then better go with bond funds. Considering how battered the market is, my personal PERA equity fund is only down 3%. I started right before the pandemic last year and my tranching strategy helped me to recover from the last March bloodbath. But remember that the PERA cannot be redeemed until you reach at least 55 (and you don’t need to redeem right away if you don’t want) so unless you’re nearing 55 soon, the equity funds statistically are more likely to generate more returns over a long period. Not to mention also that when interest rates begin to rise (when the pandemic is over), bond yields will fall. So really, bulk of your PERA risk management will depend on your time horizon.

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