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The joys of having PERA.. Tipid Tips for all  

Sunday, October 12, 2008

Alvin Tabanag is a well-known guru when it comes to money matters. I first met him when we needed writers for the BROOD Online Magazine and now here is Alvin again with a very interesting tip that he forwarded to me via e-mail. This is for everyone to lighten up their ordinary day.

Joys of tax-free saving and investing
By: Ma. Salve Duplito
Philippine Daily Inquirer
http://blogs.inquirer.com/moneysmarts

THE LAND OF SMILES CALLED the Philippines is no happy place for a small saver or investor. This is a sentiment that has often been repeated among low-income groups to academicians to Makati-type executives.

It’s not just that developing the discipline to save regularly requires touch sacrifices; it is because the taxman’s bite on every peso your savings and investments earn is huge.

A new law called the Personal Equity Retirement Account (PERA) Bill is pregnant with promises to change all that. Financial professionals and ordinary Filipinos who are savings-conscious can hardly wait for the implementing rules and regulations of the law to be published and enforced.

NEST EGG

Republic Act No. 9505 (full text available for download at Inquirer.net) at its core will allow Filipinos to have a voluntary retirement nest egg that lets money compound more quickly because of tax sweeteners.

Everybody knows that living on Social Security System or Government Service Insurance System pension alone means you have to cut it pretty close to the bone.

Also, Filipinos working and living overseas are not required to become members of SSS or GSIS, and while they may volunteer to contribute, most end up not doing so.

When you come home after working overseas, the PERA can serve as your ticket to comfortable golden years, says the bill’s main proponent, Sen. Edgardo Angara.

Yet, few realize what the bill will mean to ordinary Filipinos.

“At this point, frankly speaking, not a lot of people appreciate the PERA Bill. If the government does not do more to educate ordinary Filipinos, the only people who will benefit from this are those who are already saving and investing, when in fact this is for the low- to middle-income and first-time investors,” says Alvin Tabañag, a registered financial planner.

That banks and other financial services companies are not likely to go out of their way to teach the poor about how to get wealthy is expected, says Tabañag, who is also the founder and training director of AdvantagePlus Consulting and creator of www.PinoySmartSavers.com. “They can’t make money out of them,” he says.

Tabañag has made it his personal crusade to teach things like the PERA Bill and other aspects of financial literacy for free to schools, cooperatives and barangays. “The rich already have people working for them who will make them richer. It’s the poor who need this kind of knowledge,” he says.

Read the full article at http://archive.inquirer.net/view.php?db=1&story_id=163465

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