STOCK Brokerage DragonFi Securities, the country’s first Securities and Exchange Commission (SEC)-accredited Personal Equity and Retirement Account (PERA) administrator, wants revisions to the Capital Markets Efficiency Promotion Act (CMEPA), particularly the provision that all Filipino employees must contribute to their PERA accounts.
In a statement to The Manila Times, DragonFi co-founder and CEO Jon Carlo Lim raised concerns over the practicality of such a requirement.
While he acknowledged the Bureau of Internal Revenue’s (BIR) need for fiscal prudence, he warned that the rigid requirement may hinder the program’s effectiveness.
“I believe the commission significantly underestimates the positive multiplier effects that widespread adoption of PERA could generate,” he said.
As an alternative, Lim proposed a more flexible approach that would still meet the law’s intent while ensuring broader employer participation.
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“For example, require that the employer contribute to at least 60 percent of its workforce. This would ensure that the employer is aligned with the spirit of the law. Additionally, remove the requirement that all employees must contribute to their PERA accounts,” he suggested.
“In practice, it is more likely that employers will contribute to PERA as part of their employees’ compensation packages,” Lim said. “I believe employers are more inclined to treat PERA similar to de minimis to enhance overall compensation of the employee.”
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In December 2024, the SEC accredited DragonFi, which expanded its mandate to include securities brokers and investment houses.
Prior to this, only banks and trust entities could serve as PERA administrators, which limited its coverage. Since the law’s implementation in 2016, only around 6,000 accounts have been created.
DragonFi has been lobbying for reforms to make the system more appealing and aligned with global standards.
“DragonFi will make PERA the centerpiece of our efforts to address the pension gap in the country,” Lim earlier said, citing that only 20 percent of senior citizens are covered by the Social Security System, with average monthly payouts of P5,000 each.
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He added that PERA can be a powerful tool to build long-term savings and bolster capital markets, noting that investors can grow their retirement funds tax-free and withdraw them at age 55 without penalties.
