State-run pension fund Government Service Insurance System plans to invest $800 million overseas this year as a part of the multi-asset strategy to increase its funds, a top executive said Tuesday.
GSIS president and general manager Jesus Clint Aranas said the investment overseas would depend on “global market behaviors.”
“We will ‘test the waters’ with the $800-million investments overseas but we have to understand the global market,” Aranas said in a news briefing at the GSIS headquarters in Pasay City.
GSIS senior vice president Gracita Bocanegra said around 10 percent of GSIS’ total assets were currently invested abroad.
Aranas said the fund was not putting all its money in the global markets as it would also be a financier or equity partner under the “Build, Build, Build’ program of the Duterte administration.
“We will look for the right partners for infra projects,” Aranas said, adding that the returns on investments would eventually benefit the beneficiaries.
GSIS’ total assets increased 8 percent year-on-year in the first 11 months of 2018 to P1.09 trillion. Aranas said the growth was driven by income from financial assets, which doubled to P52.12 billion on the back of the robust performance of financial markets.
Revenues earned from insurance grew 11.2 percent year-on-year, beefed up by increased social insurance contributions as the number of contributing members rose to 1,707,795 as of November 2017.
GSIS paid more than P85 billion in social insurance claims and benefits in January to November last year, representing a 13-percent increase from P75.1 billion a year ago. The amount included disbursements for monthly old-age pension of P7.5 billion covering 316,323 pensioners; survivorship amounting to P65.3 billion for 132,449 pensioners; and life insurance and retirement claims of P616.2 million and P980.2 million, respectively.
Social insurance contributions still exceeded claims and benefits by P7.84 billion.
Income generated from loans went up 3.8 percent to P22.49 billion. Active loan accounts as of November climbed to 1.2 million from 720,342 a year ago.
Data showed that as of Nov. 30, 2017, the pension fund’s assets were 62-percent invested in financial assets, 24 percent in loans to GSIS members, 6 percent in investment properties, 4 percent in cash and 4 percent in property, equipment and other assets.
Aranas said the key challenge for GSIS was to sustain the growth in funds through investment returns, “so we can provide for the benefits of our members and pensioners, as and when they fall due.”
He said while this was becoming more difficult in the current environment of low interest rates in global and domestic fixed income markets, “ I assure our stakeholders that GSIS is well-equipped to meet this challenge given our sound investment policy and capable investment team.”