SSS planning to invest overseas
To shore up revenues, state-run pension fund Social Security System (SSS) is eyeing to foray into offshore investments while also hiking the exposure to as much as a fifth of its investment portfolio, its president and chief executive Emmanuel F. Dooc said.
While its charter allows for a foreign investment equivalent of up to 7.5 of the total portfolio, SSS only invests in domestic tools at the moment, Dooc told reporters last Wednesday.
The SSS would also seek Congress approval to increase by 2.5 percentage points per year the share of foreign investment to the portfolio until it reaches the target of 20 percent, Dooc said.
He said the proposal was “received favorably” by members of the SSS board during a recent meeting.
“At the moment, this is just a proposal to make the pension fund a tool for economic activity,” he said.
The SSS was also mulling over relaxing rules under its charter mandating investment only on equities or bonds with a “Triple A” rating, which Dooc said was difficult to look for. “We’ll propose to invest in those with at least an investment grade,” he said.
The SSS was also looking to adopt a dividend requirement for foreign equity that would match the dividend payment scheme of domestic equities, Dooc added.
“We are positioning ourselves because we realized that it’s very unpalatable to just rely on an increase in contributions. We also have to harness opportunity to derive higher gain from investments,” Dooc added.
Amid the clamor to hike pension benefits, Dooc said the SSS wanted to “prove that we can also source funds other than the contribution that we demand from our members.”
The latest SSS data showed that as of October last year, total investment level stood at P470.2 billion, with an average return on investment of 7 percent.
Government securities worth P182.3 billion accounted for the bulk or 39 percent of the portfolio, followed by equities (P109.2 billion or 23 percent of the total), loans to members (P86.6 billion or 19 percent), bank deposits (P32.7 billion or 7 percent), corporate bonds and notes (P39.3 billion or 8 percent), and real estate (P20.1 billion or 4 percent).
