ASEAN KEY DESTINATIONS
State fund invests in Philippine market
Robert Vergara, GSIS president and general manager, told reporters that once the pension fund completes the recall of funds from its Global Investment Program in June, the agency would become more aggressive on its investments in the equities market.
Although the top executive did not indicate which of the listed companies’ stocks the state-owned pension fund will buy, he said that it will be among the heavy industries such as those in power generation and energy, utilities such as the telecommunications, and possibly in the property sector but through real estate investment trust (REIT).
At present, about six percent of its P580 billion total funds meant for investments are in the stock market. When the total funds of about P32 billion from its investments overseas arrive in full by June, it will push its investing funds to around P612 billion.
“Too much cash strains your returns too much,” Vergara said. “I want equities to be in about eight percent to nine percent of GSIS’s investible funds.”
So far, GSIS’ placement in the equities market is at P45 billion.
Increasing the share of its investments in the equities market to nine percent could mean an additional cash of around P10 billion to be poured into the stock market.
Vergara said that its investments could be higher since the pension fund likewise wants to be active in REIT, pending the revenue regulation of the Bureau of Internal Revenue.
GSIS earlier said that its net income for the first quarter this year was flat at P14.6 billion or around the same level during the same period a year ago.
“Last year, there were equity transactions. But this year, there were not as many equity transactions but there was an increase in premium [payments] as a result of the salary increases [of government workers] last June,” Vergara said.
Vergara said that it was easy for the pension fund to project is growth for the year, as it was only looking at the premium payments of the members, who are all government employees and investment income.
“I think we’re looking at around P50 billion to 55 billion in net income this year. We’re on track [on net income for the first quarter],” Vergara said, adding however that GSIS is “slightly not on track on the equity returns” because the stock market did not do well in the first quarter.
Last year, Vergara said that revenues from premium contributions were about P47 billion, while revenues for investment was P38 billion.
GSIS then paid claims to its 1.4 million members of about P40.1 billion, making a net income of P44.9 billion for 2011.
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