P640B in GSIS assets safe, says chief

NAGA CITY—A top official of the Government Service Insurance System (GSIS) who was in this city Friday said the state-run agency now had total assets of P640 billion, all of it in “safe hands.”

Newly appointed GSIS president and general manager Robert G. Vergara told some 300 pensioners and stakeholders in a dialogue the system’s assets consisted of 45 percent in government bonds (in pesos, dollars, euros); 34 percent in loans to members; 11 percent in the local equity market; and 10 percent in “very liquid cash” and treasury bills.

That translates roughly to P288 billion in bonds, P217.6 billion in loans, P70.4 billion in the equity market and P64 billion in cash, for a total of P640 billion.

Questionable investments

Responding to a concern raised by a GSIS member about past investments that “could have been questionable,” Vergara said the GSIS pulled its investments out of foreign markets and reinvested locally to help generate growth for the economy, including a P15-billion investment in infrastructure this year.

He said that in the first quarter of 2008, the previous board of trustees earmarked $1 billion for foreign markets (roughly P41 billion), of which $600 million had been “deployed” or invested.

Last year, Vergara said the board approved his and GSIS chair Daniel L. Lacson’s recommendation to take back the $600-million foreign investment, as well as cancel the $400 million committed to two European banks.

He said this decision came about after President Aquino’s visit to the United States in September last year.

Vergara said that on that visit, Mr. Aquino received $250 million in investment pledges just as the GSIS was about to commit $400 million to foreign investment.