STATE PENSION FUND Government Service Insurance System (GSIS) wants to put $800 million in foreign-currency instruments to diversify its asset portfolio.

“$800 million is really for testing grounds in investment. It’s not too big… What we need is to understand the market globally, and we would like to look at our global fund managers how they handle,” GSIS President and General Manager Jesus Clint O. Aranas said in a press conference on Tuesday.

The plan to place $800 million in “foreign currency-denominated instruments” is part of the pension fund’s target of a 9% per annum return of investment.

“These days, return of investment is at an average of 5.5%, below our ideal rate of 9% per annum. We want to beat that 9%…that’s why we have a risk conservative approach,” Mr. Aranas said, adding that the pension fund will be maximizing the “very good” market performance recently.

GSIS is looking to hire two external asset managers to have an allocation of $400 million apiece.

“The fund manager must have an experience to manage a global portfolio because we want a fund manager who knows how to do dynamic asset allocation,” said Gracita Gilda V. Bocanegra, senior vice-president of GSIS, adding that they are open to local firms.

As of November, 62% the pension fund’s assets were invested in financial assets, 24% in loans to its members, 6% in investment properties, 4% in cash and another 4% in property, equipment and other assets.

GSIS posted a net income of P84.15 billion in the first 11 months of 2017, up 52.52% from the P55.17 billion posted in the comparable year-ago period.

Income generated from loans slightly increased by 3.8% to P22.49, as active loan accounts as of November 2017 grew to 1.19 million from 720,342 accounts posted in the comparable year-ago period.

Revenues from insurance also grew 11.2% in the eleven months ended November 2017. This was driven by “increased social insurance contributions” as the number of contributing members rose to 1.7 million as of November last year.

In the expenditure side, GSIS paid more than P85 billion in social insurance claims and benefits in the period, up 13% from P75.1 billion in 2016.

Meanwhile, GSIS’ total assets rose 8% to P1.09 billion as of November 2017.

“The growth was driven by income from financial assets, which doubled to P52.12 billion on the back of the robust performance of financial markets,” a statement from GSIS read. — Karl Angelo N. Vidal

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