By Daxim L. Lucas, September 24 2018; Philippine Daily Inquirer
Image Credit to BWorldOnline
The central bank wants to improve the attractiveness of personal retirement accounts by making them accessible online to give Filipinos real-time access to their investments and allow them to choose the services offered by financial institutions.
This and a slew of reforms for the debt and foreign exchange markets were outlined before financial industry officials last week by the Bangko Sentral ng Pilipinas who noted an increasing demand for a more active capital market due to global developments.
Speaking before the general membership meeting of the Money Market Association of the Philippines, BSP Deputy Governor Chuchi Fonacier said the central bank has been continuously working with various government agencies and industry players for the implementation of the Personal Equity and Retirement Account (Pera) “as a means to improve the financial well-being of every Filipino.”
Enacted in 2016, the Pera law provides a formal framework to help Filipinos 18 years old and above prepare for their eventual retirement. Take-up among investors has been slow, however, due to limited accessibility, difficult application requirements, fee structure and tax regulatory concerns.
The proposed scheme intends to establish a shared online Pera platform or a “Pera marketplace” which connects all participants from administrators, to product providers and to custodians.
“Contributors, especially Overseas Filipinos, will then have easier access to open a Pera account and invest in Pera products,” Fonacier said.
“Since its launch, the Pera market has been steadily growing, and with your assistance we can achieve a lot to speed it up,” the central bank official told the gathering which also included members of ACI Philippines, the Investment House Association of the Philippines, the Trust Officers Association of the Philippines, the National Association of Securities Broker Salesmen Inc. and the Fund Managers Association of the Philippines.
“We will also leverage on the National Retail Payment System to reduce transaction costs,” she said, as she asked the trust industry to support these initiatives to be able to mobilize more resources for the development of the capital market.
At the same time, Fonacier said the central bank was also keen on developing a more organized foreign exchange trading market that supports a flexible and market-determined exchange rate.
“We intend to set up a formal governance framework to clearly establish BSP’s direct supervision over the foreign exchange market pursuant to our charter,” she said, explaining that this will cover the roles and responsibilities of the BSP as the ultimate overseer of the foreign exchange market.