SSS likely to meet 2015 investment income goal

THE SOCIAL Security System (SSS) is on track to meet its goal for investment income in 2015, an official said, with the agency targeting a 6% rate of return for the year.

Speaking on the sidelines of a recent press briefing, SSS Executive Vice- President for Investments Sector Rizaldy T. Capulong said the agency will likely breach its investment income target for 2015, based on its performance seen in the first 10 months.

“Against full-year target investment income, I think we will just hit 95% to 104% of the target. I think we are on target in October overall,” Mr. Capulong said.

The SSS booked P24.213 billion in investment income in October, or a 7.04% rate of return.

As of end- November, total investments of the SSS stood at P423.81 billion, against revenues from investments and other income at P26.933 billion — also well above the 6% margin, based on latest available agency data.

Broken down, bulk of the investments are placed in government securities at P169.84 billion or 40% of the total.

Republic Act 8282 or the Philippine Social Security Act of 1997 allows the pension firm to invest portions of its reserve funds in government bonds and securities, shares of stocks, mutual funds, and foreign currency deposits, among other financial instruments to raise the money needed to pay out benefits and monthly pensions.

Nearly a fourth or P98.348 billion of the total investments are placed in equities. Mr. Capulong said the firm owns shares of stock in more than 50 companies, among them banks, utility firms, and property developers which are both listed and privately-held.

Some P78.722 billion are invested in the form of loans to SSS members. Other fund placements are P24.907 billion in bank deposits, P33.381 billion in corporate notes and bonds, and P18.612 billion in real estate holdings.

Total revenues for the first 11 months stood at P147.699 billion, with investment proceeds adding to the P120.766 billion monthly contributions from the agency’s 33.56 million members.

Apart from the salary contributions of private sector workers, the SSS relies on investments and other income to pay the monthly pensions of its 2.15 million retir-

ees and other benefits claimed by pension fund members. The SSS also has the option to invest offshore, but Mr. Capulong said this has not been carried out since the authority was given to the agency nearly 20 years ago.

The state-run pension fund raised P34.53 billion in investment income in 2014 to post an 8.74% rate of return for the year.

For 2016, the SSS expects to raise P30 billion in investment income and P141 billion in member contributions to arrive at a net profit of P41 billion. Agency officials, however, warned that this could slip into a net loss should lawmakers insist on the P2,000 across-the-board recently vetoed by Pres. Benigno S.C. Aquino III.