GSIS raising stock investments portfolio

State-run Government Service Insurance System (GSIS) said that it plans to boost investments in the stock market to about 12 percent of its entire investable funds in the long-term.

Robert G. Vergara, GSIS president and general manage said that the pension fund may increase holdings in equities to 9 percent this year and fixedincome investments to 50 percent after exiting from the $670 million foreign investments.

Vergara said GSIS, which manages pensions of more than one million state workers, is looking at power, banking and commodities stocks.

“We have a very strong cash position,” he said, citing the pension fund’s P580 billion worth of assets.

“We’re being very deliberate about how we invest” in the stock market, Vergara earlier said. “Every time the market has weak days, we’re there buying the things we like. Every time the market has strong days, we step
back.”

GSIS started a $600 million global investment program in 2008 to diversify its portfolio due to a shortage of options at home.

The program earned returns slightly above 4 percent in US dollar terms, less than the 9 percent returns the overall fund targets.

GSIS is eyeing a high double-digit growth in net income this year due to increase in contributions from members after Malacañang approved the third tranche of salary increase.

The pension fund for government employees is looking at between P50 billion and P55 billion profits this year from P43.31 billion in 2010.

President Aquino earlier promised advanced implementation of the third tranche of the Salary Standardization Law amounting to P2.8 billion.

Vergara said with the higher salary of government workers, their month contribution to the pension fund will, likewise, increase by about 10 percent.

The GSIS chief, meanwhile, revealed that in the first three months of the year the pension fund posted a P14-billion net income, or just the same amount compared with the same period last year.