The Department of Finance has expressed its full support for the congressional proposal to further deepen the domestic capital markets by building a sustainable corporate pension system while making available massive volumes of capital in the financial sector to help accelerate economic growth.
Finance Secretary Carlos Dominguez III said overhauling the country’s underdeveloped corporate pension system will be “a win-win for all” against the backdrop of the protracted coronavirus disease 2019 (Covid-19) pandemic given these positive outcomes expected from this proposed reform.
Corporate pension reform will not only expand and diversify the investor base of the capital markets, but will also be a major step forward in accomplishing President Rodrigo Duterte’s goals of financial inclusion and comfortable lives for all Filipinos, he said.
The bill centers on the establishment of an Employee Pension and Retirement Income Account (EPRIA), which is similar to the portable, employee-managed retirement accounts in developed economies that ensure workers continue to contribute to and grow their pension accounts even when they transfer from one job to another.
“The move to reform our corporate pension system, which has been underdeveloped for far too long, presents us with a wealth of benefits that go beyond increasing the efficiency of our capital markets,” Dominguez said yesterday during the hearing of the House committee on banks and financial intermediaries.
Chaired by Quirino Rep. Junie Cua, the committee held a hearing to discuss his proposed measure –House Bill (HB) No. 8938– which aims to deepen the capital markets by developing a robust institutional investor base and strengthening the regulatory environment.
Dominguez told lawmakers during the virtual panel hearing that corporate pension reform “will democratize wealth by opening access for thousands of small investors to grow their hard-earned savings through investments in the capital markets.”
“The reform is a big step forward to achieving President Rodrigo Duterte’s goal of financial inclusion and a comfortable life for all Filipinos while they are working and while they are in retirement,” he added.*