SSS co-investing with MIC only in brownfields

STATE-RUN Social Security System (SSS) President and Chief Executive Officer Rolando L. Macasaet clarified on Tuesday that the pension fund would only co-invest with Maharlika Investment Corporation (MIC), the country’s sovereign wealth fund, in “brownfield” investments.

In a press briefing on Wednesday, Macasaet stressed that the pension fund will only invest in an existing project or facility to launch a new activity or investment opportunity that already has a stable cash flow.

“Pension fund kami, hindi kami development fund. Ang pera ng SSS, hindi ko pwedeng ilagay sa mga high-risk investments. [We’re a pension fund, not a development fund. I cannot put the funds of SSS in high-risk investments],” Macasaet said, referring to “greenfield” investments or facilities that have yet to be constructed.

This, after Macasaet said earlier that the pension fund is keen on co-investing with the MIC in brownfield investments.

Macasaet noted that if the MIC injects its capital into an infrastructure project and if he sees it fit for the pension fund, then he would invest as well.

The SSS chief said the pension fund will not invest in a toll road that’s about to be built as this would entail risks. Instead, it would put its funds into an existing one, such as the North Luzon Expressway (Nlex), which already has a stable cash flow.

“Ang SSS, hindi ko ilalagay ang pera sa isang korporasyon na nagsisimula pa lang ang construction. [I will not put SSS’S funds into a corporation that’s beginning its construction],” Macasaet underscored.

For the SSS to preserve its capital, it invests the contributions of its members to government securities, corporate or multilateral institutions and equities, short and medium-term loans, money markets, and other investment instruments approved by the Bangko Sentral ng Pilipinas.

SSS and other governmentowned and -controlled operations providing social security and public health insurance, are prohibited from investing in the Maharlika Investment Fund.

Under Republic Act (RA) No. 11954 or “An Act Establishing the Maharlika Investment Fund,” the MIC is created as the “sole vehicle for mobilizing and utilizing the MIF for investments in transactions aimed at generating optimal returns on investments [ROIS].”

The Development Bank of the Philippines and Land Bank of the Philippines remitted P25 billion and P50 billion, respectively, to the Bureau of the Treasury (BTR) in September last year, contributing a total of P75 billion to the sovereign wealth fund.