GSIS PLEDGES $300M FOR PPP SUPPORT

STATE-RUN Government Service Insurance System (GSIS) has pledged $300 million to a fund that multilateral lenders will set up for the Philippines’ public-private partnership (PPP) program to be launched in the middle of the year.

In a briefing, GSIS President Robert Vergara said that the pension fund is still formalizing the structure of its participation in infrastructure projects, while working with at least two multilateral lenders on a structure that would suit them.

“We’re targeting at least half a bil- lion dollars with this. We also believe that this will enhance our existing investments,” he told reporters on Thursday.

GSIS also said that the $300 million would be on top of the proposed PPP bonds that the pension fund has committed with three other government financial institutions.

GSIS, along with Social Security System, Land Bank of the Philippines and the Development Bank of the Philippines, committed P50 billion each for the proposed PPP bonds that would provide funding for proponents of infrastructure projects.

“We’re moving fast with this. I think the government is serious in starting these projects. We hope to be in place to participate,” Vergara said.

For the infrastructure fund, GSIS and the multilateral lenders would choose a fund manager that would recommend which project to finance.

“Considering the long nature of these projects, it would be a relationship that could span 10 to 20 years. The longest that you could go into are government bonds of 25 years, which only give returns of 7.1 percent, which is not enough since we needed a yield of at least 9 percent for our actuarial requirements,” he said.

Vergara added that the multilateral agencies will contribute between $200 million and $400 million to the fund for infrastructure.

GSIS registered an unaudited net income of P57.5 billion in 2011, or 24.19 percent higher than the P46.3 billion during the same period in 2010.

Vergara said that the income growth of GSIS was boosted by premiums and income from investments and loans.