SSS to invest overseas as it diversifies asset base

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THE SOCIAL Security System (SSS) is eyeing to finally invest overseas as its new charter allows a bigger chunk of its reserve funds to be parked in foreign-currency securities.

SSS President and Chief Executive Officer Emmanuel F. Dooc said the state pension fund has plans of investing overseas as the allocation for foreign investments in its reserve fund was increased in the new Social Security Act of 2018.

“Yes, we have (a plan) because of the asset allocation for foreign investment has been doubled from 7.5% to 15%,” Mr. Dooc said in a mix of English and Filipino during a press briefing last Thursday.

The amended charter of the Social Security Commission — the policy-making body of the SSS — allows the pension fund to put up to 15% of its investible funds in foreign currency and investment-grade instruments.

The funds can be invested overseas, provided that the instruments are listed in bourses and that the issuing company has a proven track record of profitability over the last three years.

“That is one thing that we have to do in order to diversify and also to bet higher yield,” Mr. Dooc said.

The SSS also expressed interest in hiring fund managers and advisers for its offshore investments.

“We have not been doing that (investing overseas) because of lack of expertise, so we will be engaging hopefully fund managers and advisers,” Mr. Dooc said.

“I will constitute a study group to do that and we’ll be engaging consultants and experts… There are many consultants who are offering their services, so what we will do is to accredit or bid it out.”

In July last year, the SSS invested P3 billion of its investment reserve fund in three local mutual funds, divided equally between Philequity Management, Inc., Sun Life of Canada Prosperity Balanced Fund, Inc. and Philippine Stock Index Fund Corp.

Mr. Dooc previously said the SSS is looking to invest overseas to diversify its asset base and to fund pension and benefit payments, similar to the Government Service Insurance System (GSIS).

The GSIS last year bared plans to invest some $800 million in foreign currency-denominated instruments and hire two external asset managers. However, the plans did not push through. It instead jacked up its investments in foreign currency assets. — K.A.N. Vidal