Increasing PERA could actually be a bad sign — here’s why

Why Everybody wants to Increase the PERA

In this time of financial hardships among many Filipinos, government employees included, it is just but normal to desire for higher monetary benefits.

Among the benefits that many government employees long desired to increase is the Personnel Economic Relief Allowance or PERA. Aside from it being across the board, it is also not taxable.

Majority of government employees, if not all, want to increase the PERA from ₱2,000.00 per month to a higher amount.

In fact, many legislators had filed various Bills both in the House of Representatives and the Senate of the Philippines to increase the PERA; some to ₱4,000.00, others ₱5,000.00 and there’s even who filed to increase the PERA to ₱8,000.00.

The PERA Act

The PERA Act filed under Senate Bill No. 233 authored by Senator Chiz Escudero is among these various Bills that aim to increase the PERA.

Senate Bill No. 233 or the PERA Act proposes the following measures:

• Increase the current ₱2,000.00/month PERA to ₱4,000.00/month;
• No need to file new laws in the future to increase the PERA; and
• There will be automatic adjustments in the PERA depending on the annual inflation rate.

While increasing PERA could be enticing, doing the same means a different thing for us — a worsening economy.

Here’s our POV:

Why Increasing PERA could be a Bad Sign of a Worsening Economy

The Personnel Economic Relief Allowance (PERA) was originally granted to government employees as a buffer against rising living costs.

Its purpose was clear: to taper the economic impact of inflation and price increases on the daily lives of public servants.

PERA was never meant to be a reward or incentive; it was a relief mechanism, a way to soften the blow of a struggling economy on the workforce that keeps government services running.

The Original Intent of PERA

• PERA was introduced to help employees cope with the erosion of purchasing power caused by inflation.

• It was designed as a temporary cushion, acknowledging that salaries alone were insufficient to meet basic needs during times of economic stress.

• In essence, PERA is a signal allowance: its existence reflects the government’s recognition that the economy is not performing well enough to sustain workers’ livelihoods through salaries or wages alone.

Why Increasing PERA Is a Red Flag

When PERA is increased, it sends a troubling message about the state of the economy:

Acknowledgment of Worsening Inflation

A higher PERA means the government admits that the cost of living has risen significantly.

Instead of stabilizing prices, the solution becomes compensating employees for the loss of value in their salaries.

Evidence of Weak Purchasing Power

Salaries are supposed to be sufficient for basic needs. If PERA has to be raised, it shows that wages and salaries are lagging behind the real cost of goods and services.

Short-Term Relief, Long-Term Problem

Increasing PERA does not solve inflation; it only masks the pain temporarily. The more PERA grows, the clearer it becomes that the economy is failing to provide stability.

Signal of Government Strain

Allocating more funds for PERA means diverting resources from other programs. It reflects a government forced to spend more on relief rather than development — a sign of fiscal stress.

The Bigger Picture

PERA’s adjustments are not just about employee welfare — they are economic indicators. A rising PERA suggests:

• Inflation is persistent and uncontrolled.
• Wages are stagnant relative to the cost of living.
• The government is relying on allowances rather than structural reforms to address economic challenges.

Conclusion

PERA was granted to taper economic impact, not to serve as a permanent solution. When it increases, it is a symptom of a worsening economy.

For government employees, it may feel like a welcome relief, but for the nation, it is a warning sign: the economy is struggling, and allowances are being used as band-aids instead of addressing the root causes of inflation and weak purchasing power.

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