SSS to invest P3B in capital market

SSS president and CEO Emilio de Quiros Jr. PHOTO FROM ARCHIVES.PIA.GOV.PH

MANILA, Philippines—The Social Security System (SSS) plans to invest P3 billion in the local capital market this year and will hire professional managers to take care of the fund.

Emilio de Quiros Jr., president and chief executive officer of the SSS, said this would be the first time that the state-run pension fund would hire fund managers.

De Quiros said three financial institutions would be selected and each would be given P1 billion to invest in peso-denominated equities and fixed-income instruments, on behalf of the SSS.

The P3 billion to be handled by the three fund managers accounts for less than 1 percent of the P370 billion in total investable funds of the SSS.

The SSS will choose the fund managers based on their experience and performance in handling large portfolio investments.

“This will be the first time [the SSS will hire fund managers]. From this move, we expect to learn from their investment strategies and benefit from their research,” De Quiros told reporters on Thursday.

The fund managers to be selected are expected to help the SSS meet, if not surpass, its revenue target for this year.

For 2014, the SSS has set a net revenue target of P34 billion. This is a conservative target, De Quiros said, given that the SSS already posted P38 billion in net revenues last year.

“We are conservative in setting targets but we always try to surpass the goals,” he said.

The P38 billion in net revenues recorded last year beat the official target of P36 billion, De Quiros said.

Revenues generated by the SSS are composed largely of contributions from its members and income from investments. On the other hand, its expenditures are composed largely of pension to retired members and survivors of deceased members.

Under its charter, the SSS can use a maximum of 12 percent of members’ contributions and 3 percent of investment income for its operational expenses.

He said the SSS intended to continue streamlining operations to keep its expenses below the limit.

Last year, he said, expenditures of the SSS hit only 67 percent of the limit.

This year, De Quiros added, the SSS intended to keep its operational expenses at no more than 65 percent of the limit.

Meantime, the state-run firm on Thursday launched the SSS-Citi Visa prepaid cards for members wanting to avail themselves of salary loans.

De Quiros said SSS members now have the option to receive the proceeds of their salary loans through the prepaid cards.

With the cards, SSS members may withdraw proceeds of the salary loans through automated teller machines (ATMs). Also, the card may be used to pay for goods from Visa-accredited merchants.