TUCP also urges GSIS to bare foreign placements

Published by rudy Date posted on October 9, 2008

The moderate Trade Union Congress of the Philippines (TUCP) joined the United Opposition (UNO) in calling for the Government Service Insurance System (GSIS) to disclose its foreign investments other than its reported earnings.

The GSIS announced that it had earned more than $600 million in profit from investments abroad.

TUCP and UNO, however, claimed GSIS had failed to report some P1.7-billion earnings over the last six months.

TUCP general secretary Ernesto Herrera said that based on foreign exchange gains alone, the $600 million the GSIS had stashed overseas should have grown nearly 12 percent over the last six months.

“The investments should have gained by at least P2.92 billion, and not just P1.25 billion,” Herrera said.

“This implies that the current peso market value of the pension fund’s foreign investments as of Sept. 30, assuming the $600 million is still intact, should have grown by a corresponding 11.65 percent,” he said.

Citing data from the Bangko Sentral ng Pilipinas, Herrera said the peso averaged 41.82 per dollar in April – the same month the GSIS actually deployed the $600 million under its global investment program (GIP).

Six months later, or by September, according to Herrera, the peso averaged 46.69 per dollar, or a difference of P4.87 per dollar from April.

Last Sunday, GSIS reported that its GIP posted an impressive growth in the total value of investments of five percent to P1.245 billion as of Sept. 30, 2008.

Herrera said it was curious as to why the GSIS, in its Oct. 6 statement, chose to state and report the GIP’s supposed gains only in pesos, and not in both dollars and pesos.

“Why did the GSIS not report the supposed gains in dollars? Because we suspect the $600-million original investment may have already lost face value in dollar terms,” he asked.

The UNO, for its part, said GSIS should disclose before the public if it had any exposure to the US-based financial company Lehman Brothers that went bankrupt.

UNO president Makati Mayor Jejomar Binay made the statement in reaction to claims of the GSIS that its GIP grew by 5 percent, or P1.25 billion in value as of Sept. 30, but it refused to reveal its foreign placements.

“As members of GSIS, government employees deserve to know how the agency has invested our money. The members have a right to demand transparency from the GSIS because, after all, they are handling hard-earned contributions for millions of government employees,” Binay said.

Binay chided the GSIS for claiming that “vested interest groups” were pressuring them to reveal its exposure to the American financial companies that had collapsed as a result of the US financial crisis.

“There is only one interest group here, and it is the membership of the GSIS. The contributors need to know the truth,” Binay said. – Mayen Jaymalin with Jose Rodel Clapano, Michael Punongbayan, Philippine Star

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