GSIS benefits from soaring PSE index, PH economic gains

Rappler.com
The head of a state-run pension fund shared that the strong investment interest toward the Philippines is trickling down to beneficiaries of the pension and insurance funds that GSIS is managing for government employees and institutions

MANILA, Philippines – The head of a state-run pension fund shared that the strong investment interest toward the Philippines is benefiting the Government Service Insurance System (GSIS).

GSIS president and general manager Roberto Vergara said the record-breaking performance of the local stock market is trickling down to the beneficiaries of the pension and insurance funds that GSIS is managing for government employees and institutions.

In a December 3 interview aired on ANC, Vergara said “The market really has strong momentum” and that the much-anticipated upgrade of the Philippines to investment grade credit rating status will further boost yields.

“I was just in Hong Kong this weekend and I spoke with investment banks there. There are a lot of investors who want to get in so I can only guess if they do get in, with the possibility of us getting investment grade next year, we can see a good run up similar to what we’ve seen in the last couple of years,” Vergara said, as quoted by ANC.

GSIS is mandated by law to put in a substantial part of its assets in the local capital markets, including long-dated instruments such as 25-year Treasury bonds.

The GSIS netted P46.4 billion in the first 7 months to July, reflecting a 14% increase from a year ago’s P40.7 billion. The higher yield from its equity investments due to the Philippine economy’s fair performance was cited as the key reason for the healthy growth.

GSIS has been more active with its equity portfolio this 2012, allotting about 13% of its total portfolio, which includes loan receivables, of P652 billion.

The pension fund is aiming to increase to 15% the share of equities of its portfolio, equivalent to about P100 billion.

Equity investments went up 29% to P86.5 billion in July.

The state-run pension funds in the country — the other is Social Security Services (SSS) — are considered key players in the development and expansion of the local capital markets. – Rappler.com