GSIS sets aside $800M for offshore investments

STATE- RUN Government Insurance Service System ( GSIS) is setting aside $ 800 million for offshore investments, aiming to take advantage of expected improvements in global markets this year.

Diversification will be a primary focus of the pension fund in 2018, officials said in a press briefing on Tuesday.

“The returns that we are getting from our investments here averaged 5.5 percent, below our ideal assets growth [ rate] of 9 percent per annum,” GSIS President and General Manager Jesus Clint Aranas said.

“We want to beat that the 9 percent … That’s why we came up with risk- conservative approach toward our investments,” he added.

“We can’t put everything [ offshore] … the amount ($ 800 million) … is for testing [ the markets].”

GSIS executives also said the $ 800- million allocation for foreign currency- denominated instruments was in line with plans to hire two external fund managers with a proven

ability to manage a “multiasset strategy”.

As of November last year, the pension fund’s assets were up 8 percent to P1.09 trillion.

It said that 62 percent invested in financial assets, 24 percent in loans to members, 6 percent in investment instruments, 4 percent in cash and 4 percent in property, equipment and other assets.

Income from financial assets was said to have doubled to P52.12 billion on the back of the robust performance of financial markets.

Net income for the 11-month period was P84.15 billion, up 52.52 percent year- on- year.

With regard to expenditures, the GSIS said it paid more than P85 billion in social insurance claims and benefits, a 13- percent increase compared to the P75.1 billion in the same period the prior year.

Disbursements for monthly old age pensions totaled P7.5 billion for 316,323 pensioners; survivorship, P65.3 billion for 132,449 pensioners; and aggregate life insurance and retirement claims of P616.2 million and P980.2 million, respectively.

Social insurance contributions still exceeded claims and benefits by P7.84 billion, it said.

“As always, the key challenge for GSIS is to sustain the growth in our funds through investment returns, so we can provide for the benefits of our members and pensioners, as and when they fall due,” Aranas said.