Finance Secretary Benjamin Diokno has asked the government’s social institutions under his watch to invest their long-term pension funds on public infrastructure.
This developed as the latest Department of Budget and Management data showed that total government infrastructure spending in the first half of 2022 reached P600.1 billion, up 12 percent year-on-year but 6.4-percent below-target mostly due to the ban on new public expenditures ahead of the May 9 presidential elections.
Last week, President Marcos’ chief economic manager met with top officials of the state-run Government Service Insurance System (GSIS) and Social Security System (SSS), both of which have long-term money largely unutilized except for holdings in government securities like T-bills and bonds.
Diokno said the plan was for the GSIS, the SSS, Philippine Health Insurance Corp. (PhilHealth) and the Home Development Mutual Fund (Pag-Ibig) to invest in infrastructure, in line with the Marcos administration’s “build better more” program. “We will optimize, maximize the use of long-term money for infrastructure.”
During a Senate hearing last week, Rizaldy Capulong, officer in charge of SSS, said that in 2020, the SSS held P640 billion in assets; the GSIS, P1.44 trillion; PhilHealth, P274.5 billion; and Pag-Ibig, P669.8 billion.
In July, GSIS officials said that out of its P104-billion investible funds, only P35 billion had so far been invested in infrastructure and private equities. Wick Veloso, president and general manager of GSIS, had said he wanted to be involved in discussions with implementing agencies that have shovel-ready infrastructure projects needing financing in the power, telecommunications, digital infrastructure, housing, food security, electricity, water and medical service sectors.
The GSIS last invested P16.8 billion in infrastructure a decade ago through the public-private Philippine Investment Alliance for Infrastructure, which will wind down in 2024.
Diokno noted that these institutions have mandates to invest a portion of their funds, including in infrastructure, which have higher returns on investment—usually more than double the GS yields. INQ