GSIS bares foreign gains

The Government Service Insurance System has gained about $70 million from its investments in the global markets in nearly three years.

Robert Vergara, president and general manager of GSIS, told reporters Friday that the pension fund’s overseas investments yielded cumulative earnings of $70 million since initiating a diversification early in 2008, contrary to reports that it lost money.

“The $600 million is now $670 million. Our placements earned 12 percent in dollar terms,” said Vergara in a lunch briefing with reporters.

The new GSIS management has suspended the disbursement of $400 million from the original amount of $1 billion set by the previous board.

He said $400 million placed in the Amundi balanced fund run by Credit Agricole had grown to $455 million, while $200 million placed with Pimco, the world’s largest fixed income fund manager with over $1 trillion in assets, had increased to $215 million.

Vergara said the board was set to review its global investment program that would end next year.

He said the fund was looking at various options, including the possibility of withdrawing the global placements in favor of domestic investments in sectors like infrastructure. GSIS could limit the investments in emerging markets whose prospects of returns are better than those of developed markets, or shift to commodity markets instead of fixed-income instruments.

GSIS, which provides benefits to the state’s more than 1 million workers, may also boost investment in Philippine stocks, Vergara said. Banks, property developers and utilities look attractive, he said.

“These are all part of the review. If we choose to continue the global investment program, [the term would have to be] more than a year, at least a couple of years although we review the funds quarterly internally,” said Vergara.

He said there could also be a separate selection criteria for the fund managers focusing on emerging markets, commodities or currencies, depending on the thrust of its global placements.

Meanwhile, the GSIS board of trustees authorized the release of P908.96 million in cash dividends to eligible members after it posted another surplus in revenues from its Social Insurance Fund and Optional Life Insurance Fund., –Elaine R. Alanguilan, Manila Standard Today