The Bangko Sentral ng Pilipinas (BSP), through Memorandum No. M-2026-044, has issued guidelines for banks seeking to offer time deposits as accredited investment products under the Personal Equity and Retirement Account (PERA) framework. The guidelines give PERA contributors access to a familiar, relatively low-risk investment option while prescribing the regulatory requirements applicable to banks offering the product.
While the Manual of Regulations for Banks (MORB) recognizes deposits as PERA-eligible investment products, the memorandum establishes the framework for offering time deposits specifically as accredited PERA investment products. A PERA time deposit remains a bank time deposit subject to applicable banking laws and regulations, as well as PERA-specific requirements governing eligibility, ownership, administration, transfer, rollover, withdrawal and tax treatment.
Only banks that satisfy the applicable prudential criteria under the MORB may offer PERA time deposits. A bank’s board of directors must approve the PERA time deposit program, after which the bank must notify the BSP and submit the prescribed documents, including the board approval and certifications of compliance.
Following the BSP’s confirmation that the bank has complied with the applicable prudential requirements and submitted complete documentary requirements, the BSP will transmit its confirmation to the Bureau of Internal Revenue (BIR). The bank must thereafter obtain BIR accreditation before it may offer or accept placements in PERA time deposits.
Banks may offer or accept PERA time deposit placements only pursuant to a written arrangement with one or more accredited PERA Administrators. The PERA Administrator remains responsible for the administration of the contributor’s PERA, including compliance with applicable contribution limits, PERASys enrollment, recordkeeping and tax reporting.
Product names must clearly include the term “PERA” and must be used consistently in customer documents and marketing materials. Interest rates must be market-based and comply with applicable deposit disclosure requirements. PERA time deposits must have a minimum maturity of 30 days.
Banks must also provide contributors with prescribed disclosures, including the applicable interest rate, effective annual yield, fees and charges, PERA tax incentives and their conditions, pre-termination and withdrawal rules, and relevant risks.
For PERA contributors, the guidelines introduce another investment option within the country’s voluntary retirement savings system. PERA time deposits combine the relative stability and familiarity of a traditional bank deposit with the tax-advantaged structure of PERA. As bank deposits, they remain subject to applicable Philippine Deposit Insurance Corporation deposit-insurance rules.
Contributors should note, however, that the maturity of a PERA time deposit does not by itself constitute a withdrawal from PERA. Upon maturity, the proceeds remain PERA assets and may be rolled over, transferred or reinvested in accordance with the contributor’s instructions and applicable PERA rules. Similarly, pre-termination of the time deposit does not constitute a PERA withdrawal if the proceeds remain within PERA and are held, transferred or reinvested in accordance with those rules.
For banks, the new framework presents both a product opportunity and a compliance exercise. Banks considering PERA time deposits should assess their eligibility under the MORB, BSP notification and BIR accreditation requirements, arrangements with PERA Administrators, systems capabilities, and customer documentation and disclosures before launching the product.
By providing a framework for qualified banks to offer time deposits within PERA, the BSP combines a traditional deposit product with PERA’s long-term retirement savings structure and tax incentives. Whether the new product significantly broadens PERA participation will depend in part on how banks and PERA Administrators develop and market their offerings and how their returns and costs compare with other PERA investment options.
Cruz Marcelo & Tenefrancia will continue to monitor BSP and BIR issuances concerning PERA investment products and other developments affecting the Philippine banking and financial services sector.
This article is for general informational purposes only and does not constitute legal advice.
For further information, please contact:
Francis L. Fragante, Partner, Cruz Marcelo & Tenefrancia
fl.fragante@cruzmarcelo.com
