GSIS checks out investment opportunities in local market

MANILA, Philippines—The Government Service Insurance System is looking to invest in domestic blue-chip stocks after pulling out its massive placements in overseas markets, according to its chief.

Robert G. Vergara, GSIS president and general manager, said in an interview the pension fund was particularly interested in banks as well as energy companies.

“We believe banks are a good proxy for the Philippine economy,” Vergara said. “Similarly, we think utility businesses” will continue to show strongly.

The GSIS chief added that the pension fund was receiving cash in tranches from the $675 million it had redeemed and previously earmarked for its global investment program, or GIP.

GIP money has started coming back in, with $230 million already received and the rest expected to be fully remitted by the third week of June.

He said that all the GIP funds will be deployed domestically, particularly by increasing the GSIS’ investments in fixed income and equity instruments.

“We are also anticipating the launch of the real estate investment trusts and [big-ticket infrastructure projects under the government’s] public-private partnership program,” Vergara said.

He explained that the GSIS management felt it was better to invest in the local market than overseas, considering that such tack shielded the agency from foreign exchange fluctuations.

Last week, Vergara said the GSIS posted a P14.6-billion net income in the first quarter, which was on track with the agency’s projections.

He said that in January-March of 2010, the pension fund engaged in equity transactions, while there were none this year.

However, there was an increase in revenues from insurance premium because of the 10-percent increase in the salaries of government workers effective June.