SEC sees increase in Filipinos' Retirement Funds with CMEPA

The Securities and Exchange Commission (SEC) sees more Filipinos beefing up their retirement funds under the Personal Equity and Retirement Account (PERA), thanks to the enactment of Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA).

​Among the salient provisions of the CMEPA is the grant of a 50% additional tax deduction to private employers who contribute an amount equal to or greater than their employees’ PERA contributions.

Established under Republic Act No. 9505, or the PERA Act of 2008, PERA is a voluntary retirement saving program available to the public in addition to existing retirement benefits from Social Security System, Government Service Insurance System, and employer-sponsored plans.

The program offers contributors tax benefits not available in other retirement investment products, encouraging Filipinos to save for their future.

“The CMEPA strengthens the role of PERA by offering stronger incentives for long-term savings. It encourages companies to support their employees’ retirement planning while simultaneously increasing the capital available in the financial system, stimulating the local stock market,” SEC Chairperson Francis Lim said.

Following its enactment, the SEC lauded the Marcos administration for the landmark measure that lowered the tax rate for several capital market-related transactions.

“At its core, CMEPA is designed to align the Philippine capital markets more closely with regional peers by removing long-standing barriers to investor participation,” Chairperson Lim said.

“This supports the Commission’s mission to continue introducing reforms that will increase the local market’s competitiveness. The strict implementation of provisions under CMEPA is key toward ensuring broader public participation in the capital market and fostering a deeper investment culture among Filipinos,” he added.

One of the most significant reforms under the law is the reduction of the stock transaction tax (STT) to 0.1 percent from 0.6 percent, which is expected to stimulate market activity by lowering the cost of equity investments.

Additionally, the Documentary Stamp Tax (DST) on the original issuance of shares of stock has been reduced to 0.75 percent from 1 percent of par value—an incentive for companies seeking capital through initial public offerings (IPOs) or follow-on equity listings.

Rather than imposing a new tax, the CMEPA standardizes the final withholding tax on interest income at 20 percent, simplifying compliance across investment instruments. Meanwhile, the harmonization of the capital gains tax to a flat 15 percent on shares of foreign corporations aligns the Philippine tax regime with global standards and helps attract more foreign investments.