Social Security System chairman Amado Valdez asked Congress to pass a law that will enable the pension fund to invest in public-private partnership projects.
Valdez said in a statement Tuesday the new idea would directly redound to the working class as they would own a stake in infrastructure projects.
“For the first time, SSS funds will be used in profitable nationwide projects. This new thrust has been motivated for the clamor of a higher pension and to ensure that the fund is sustainable in perpetuity,” Valdez said.
SSS is pushing for amendments to its charter specifically on the conservative provisions that limit the fund’s investing capacity.
The SSS charter provides for certain limitations on the powers of the commission to invest its reserve fund. At present, SSS could only invest in private securities (40 percent), housing (35 percent), real estate (30 percent), short and medium-term member loans (10 percent), government financial institutions and corporations (30 percent), infrastructure projects (30 percent), foreign currency denominated investments (7.5 percent) and any particular industry that the commission deems profitable.
“For example, P183 billion of the SSS investment reserve fund is in government securities. This means that the money of the working class is lying in government securities without any asphalt road being built,” Valdez said.
SSS also has plans to diversify assets by directly investing in up to 25-percent ownership in a wide range of industries, including infrastructure projects such as toll roads, real estate, utilities and even lotto operations.
Valdez cited the case of the Singapore pension fund which has a 40-percent stake in Globe Telecommunications through Singtel which the pension fund owns.
“This means that the core net profit of Globe Telco, which according to news reports was at P16 billion in 2016, was plowed back to the Singaporean pension fund to the benefit of its pensioners. This can also be done here at SSS,” he said.
Valdez said the return on SSS investments had an average of 7 percent for 2016, but SSS was hoping to bring it up to 15 percent to 20 percent next year.
“But we need the help of Congress to pass the SS Law amendments that will allow the SS Commission to execute these new investments” he said.