GSIS to invest in P25-B infrastructure fund

MANILA, Philippines – A P25-billion infrastructure fund will be launched in July, with the state-run Government Service Insurance System (GSIS) among the lead investors, President Benigno S. Aquino III said on Monday, May 28.

“This is the biggest fund allocated for the country’s infrastructure plans,” the president announced at the 75th anniversary of the GSIS, a pension fund for state workers, in Pasay City.

GSIS would pour half of the P25 billion (roughly US$300 million) fund that may be used for public-private partnership (PPP) for infrastructure projects, GSIS president and general manager Robert Vergara said.

The goal of the fund is to generate a return of at least 9% to 15% a year for GSIS through investments in areas that include transportation, energy, power, water, environment, communications sectors as well as other PPP investment opportunities, Vergara added.

The pension fund is the lead investor in the so-called Philippine Investment Alliance for Infrastructure, which will be managed by Maquarie Infrastructure and Real Assets (MIRA), a division of the Macquarie Group. The investment horizon of the fund is 10 years, Vergara said.

“Along with GSIS and MIRA, two other foreign institutions will participate as anchor investors in the Fund,” Vergara told reporters.

“We are pleased to partner with GSIS, the largest pension fund in the Philippines, particularly at a time of strong economic growth in the country,” said MIRA Senior Managing Director Frank Kwok.

GSIS performance

President Aquino lauded the GSIS for its improved  delivery of services of and cited as proof its P60.4 billion in net revenues last year and its payment of P53.3 billion in social insurance claims and benefits, which is 26% higher than in 2010.

“With these positive numbers, GSIS is more effective in serving its members and beneficiaries?” the president said in the vernacular.

Aquino said that the GSIS was created with the “clear mandate” to help government employees in times of need and to ensure that they lead a decent life through the provision of pensions, loans, insurance and other benefits.

Vergara said the GSIS would likely double their equity exposure over the course of the next 12 months from where they are at present.

Last year, the pension fund decided to unwind its entire $670 million it has invested abroad. – Rappler.com