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News 10/23

"Guaranteed" Repatriation of "Required Deposits"

PRA management shares the concerns expressed by retirees about what is called "guanranteed" repatriation of "required deposits".  We have therefore consulted the Bangko Sentral ng Pilipinas (BSP) regarding this matter.

The guarantee was formulated in 1985 during the enactment of Executive Order No. 1037, which governs the SRRV program.  In those days, exchange restrictions did exist.  The guarantee was meant to make absolutely sure that people who brought a certain amount of money into the country, could (when their membership ends) take out the same amount of money out of the country, without being subject to any exchange restrictions and/or having to go through any formalities of BSP.

PRA can not assume responsibility for investments made by retirees.  PRA ensures (and continues to prepare proposals to add more alternatives) that options exist for investing the "required" deposit in a number of ways, each with a different level of risk.  Such choice is the responsibility of the retiree, without recourse to PRA.  However, PRA intends to make available a safe option thus allowing to spread deposits in portions to be held in different banks and guaranteed by Philippine law.