GSIS plans to hike equity exposure this year

Posted at 02/04/14 4:22 PM

MANILA, Philippines - The Government Service Insurance System (GSIS) is seeking to expand its investments in publicly traded stocks, as it expects the local bourse to recover.

GSIS president and general manager Robert G. Vergara said the pension fund is planning to raise its equity exposure to 20% this year, from 16.7% (equivalent to P114 billion) as of end-December 2013.

"We’re looking at 2 to 3 years investment horizon. I believe that the country is fundamental strong to withstand volatility in the financial markets," he said.

Vergara said the state pension fund is still biased towards banking, infrastructure and consumer stocks.

To date, GSIS total assets are at P786 billion and its investable funds amount to P724 billion.

As it plans to raise its equity exposure, GSIS tapped First Metro Investment Corporation, Philequity Management Incorporated, and Rizal Commercial Banking Corporation (RCBC) as additional local fund managers. This is in addition to BDO Unibank, Metrobank, Bank of the Philippine Island, ATR KimEng and Philam Asset Management.

"We now have eight fund managers that we’ve tapped for our equity investments. We provided them P20 billion in investable funds, which is a very small amount against our P114 billion equity portfolio," Vergara said.

He said around P94 billion is still being managed by GSIS.

At the same time, GSIS said its net income fell 21% to P49 billion in 2013, from P62 billion a year ago.