The Bangko Sentral ng Pilipinas (BSP) has taken another step toward broadening financial inclusion; this time by allowing overseas Filipinos to invest in central bank securities through retirement funds, giving them access to what insiders call “the safest yield in town.”
Through a new issuance, the BSP has lifted the 10-percent non-resident ownership cap for Personal Equity and Retirement Account (PERA) unit investment trust funds (UITFs), a technical tweak that effectively opens the central bank’s short-term securities market to more Filipinos abroad.
While the reform might appear niche, the implications are substantial: it brings overseas Filipino workers (OFWs) and expatriates closer to the domestic financial system, turning remittances into investments, not just consumption.
A Quiet but Significant Policy Shift
Under the previous framework, UITFs, investment pools managed by banks and trust companies, could invest in BSP securities only if foreign participation in those funds remained below 10 percent.
That rule effectively sidelined many PERA-accredited UITFs since nine out of 13 already had more than 10 percent non-resident investors. As a result, OFWs contributing to these funds were denied exposure to the safest and most liquid instruments in the Philippine market — the BSP’s own securities.
The new rule fixes that.
By exempting PERA-registered UITFs from the 10-percent limit, the BSP is giving more overseas contributors access to diversified portfolios that now include risk-free central bank instruments, long considered the benchmark of stability.
The Rationale: Inclusion Meets Market Depth
The BSP’s move sits at the intersection of financial inclusion, market development, and diaspora engagement – three long-standing policy goals.
By encouraging OFWs to park savings into formal, long-term accounts rather than short-term deposits or real estate speculation, the central bank aims to strengthen both individual financial resilience and domestic capital markets.
“This is a smart way to connect the global Filipino’s savings with the country’s liquidity ecosystem,” one private banker told OffMarketHours. “It turns remittance income into structured investment participation — something we’ve been missing for decades.”
Numbers Tell the Story
As of end-2024, the PERA system, the Philippines’ voluntary retirement savings framework, remains small but growing fast.
- Total voluntary retirement contributions: ₱491.39 million, up 24% year-on-year.
- Number of contributors: 5,912 (up 6.4% from 5,555 in 2023).
- Breakdown:
- 4,211 employed Filipinos – ₱341.75 million
- 789 overseas workers – ₱82.25 million
- 912 self-employed – ₱67.39 million
These numbers may seem modest compared to the ₱1.8 trillion OFW remittance inflows recorded annually, but analysts see this as a structural foundation for a true private pension system, one that complements the state-run Social Security System and GSIS.
What It Means for OFWs and the Market
For Overseas Filipinos
The policy gives OFWs access to secure, BSP-backed investments through PERA funds, potentially higher-yielding and better diversified than traditional savings accounts. It also provides a legally protected retirement vehicle, encouraging long-term wealth accumulation rather than purely remittance-based spending.
For the Banking Sector
Banks managing UITFs gain more flexibility to balance liquidity and returns. By investing in BSP securities, fund managers can improve stability without sacrificing performance, a win for both investors and institutions.
For the Capital Market
The move broadens participation in BSP securities, deepens the investor base, and links overseas capital with domestic liquidity management. It also signals that the BSP is progressively liberalizing its financial instruments to engage the Filipino diaspora, a group whose aggregate savings could rival institutional portfolios if properly mobilized.
Analyst Insight: A Step Toward “Remittance Reinvestment”
Economists call this part of a bigger trend: turning remittance flows into reinvestment flows.
“The BSP isn’t just managing liquidity anymore — it’s managing inclusion,” said an investment strategist interviewed by OMH. “If remittances are the lifeblood of the economy, PERA funds are the vessel that keeps it circulating long-term.”
By channeling OFW savings into instruments that stay within the domestic market, the BSP helps retain liquidity, strengthen the peso, and encourage responsible financial behavior among the country’s global workforce.
The Bigger Picture: Trust, Savings, and the Future of Financial Citizenship
This reform may look technical, but it’s a milestone in redefining what it means to be a “financial citizen” of the Philippines. For decades, millions of overseas workers have been indispensable to the economy yet structurally disconnected from its capital markets.
By letting OFWs invest in BSP securities through PERA, the central bank is bridging that gap, giving global Filipinos a literal stake in the country’s financial system.
As the BSP put it, “It’s not just about inclusion; it’s about participation.”