State-run Social Security System said it plans to redevelop its idle and old properties such as an old building on a prime location in Makati City in partnership with real estate developers to gain better yield for the fund.
SSS president and chief executive Emmanuel Dooc said in an interview that redeveloping and renovating idle real estate properties would fetch their desired returns.
“The new investment plan may call for redevelopment of idle properties or existing properties which are not fetching the desired return,” Dooc said.
He said these properties could include the old SSS building along Ayala Ave. in Makati City. “That’s an old building, but if we want to maximize the returns for that, we have to put up a new building. It could be in partnership with another named developer,” Dooc said.
Dooc said a property consultant would present this week before the Social Security Commission partnership plans with commercial developers such as Ayala Land Inc. and Federal Land. The consultant may also present a plan for developing the project on its own.
SSS chairman Amado Valdez also disclosed a plan to invest in infrastructure projects under the public-private partnership scheme.
The fund pushes for direct capital infusion in tollway construction under the PPP to generate lifetime income and to provide more meaningful benefits to members.
“In the past, SSS invested in South Luzon Tollways through corporate bonds which generated a yield of close to seven percent. This time, we want to explore the possibility of funding projects for new tollways, income of which is for a lifetime. We plan to invest 25 to 30 percent of our reserve fund in these road development projects and we expect the same rate of return, if not better,” Valdez said.
“SSS seeks to include new investment vehicles where SSS can invest their reserve fund without compromising the basic investment principles of safety, good yield and liquidity. We hope that this legislation will be passed immediately to help us in our pursuit to increase the income of the agency and enhance the benefits for our members,” Valdez said.
Dooc said SSS invited the PPP Center to make a presentation on PPP projects.
He said SSS officials were aware of the liquidity requirement of the system. “We have many liabilities like this pension, so there must be balance between our liquidity position and our investment position which may give us better yield,” he said.
He said the new investment vehicles could be through private finance, real estate investment trust, private equity and collective investment scheme, private equity funds and multi-asset structured funds.
“We are proposing asset allocation changes, like an increase in private security from 40 percent to 60 percent of the investment reserve fund so we can release more fund for private securities,” he said.
“We will be re allocating our assets so we can directly respond to be better yielding. There was a cap, so we may be asking Congress to make amendments,” he said.