GSIS records P14.6B in net income in Q1

MANILA, Philippines—The Government Service Insurance System posted P14.6 billion net income in the first quarter, roughly the same as year-ago period and on track with the agency’s projections, its president announced.

Roberto G. Vergara, also GSIS general manager, said that in the period of January to March of 2010, the pension fund engaged in equity transactions while there were none this year.

However, “there was an increase in premium because of the 10-percent increase in the salaries of government workers effective June,” Vergara said. “These two factors offset each other.”

He said that the first-quarter performance was in line with the GSIS’ forecast of a full-year net income of between P50 billion and P55 billion.

This means an increase of between 9 percent and 20 percent from P46 billion in 2010.

“It’s very easy for us to project our growth because at the end of the day, our revenues are driven by just two items,” the GSIS chief said.

One is premium payments from members, which are on salary, which in turn are a given especially since President Aquino has announced that the increases that were supposed to be coming in July will be fast-tracked to June.

The other component is GSIS’ investment income, including loans to members and plays in the fixed income and equities market.

Vergara said 2010 revenue from premium contributions was about P47 billion while revenue from investment was about P38 billion.

On the other hand, the GSIS paid out claims or pensions to members reaching about P40.1 billion.

“I think we’re on track on the revenue from premiums and slightly not on track on the equity returns,” Vergara said. “The market was not doing well in the first quarter, and bounced sharply only in April.”

Last week, Vergara said the GSIS suspended its housing loan program to focus on other types of loan it could offer to its members and pensioners and relieve the pension fund of something outside its key competencies.

He also said GSIS members would be better off borrowing their housing funds from key shelter agencies like the Pag-IBIG Fund, considering that the latter has always offered less interest.

Even then, Vergara said the pension fund would be ready to provide its members an initial P5 billion for housing funds, especially if a system could be worked out with Pag-IBIG.