The Social Security System plans to invest P20 billion more in equities to take advantage of favorable growth projections for the country’s stock market.
Emilio de Quiros Jr., president and chief executive officer of SSS, on Thursday said that the pension fund manager would look into diversifying its equity investments so it could further push up its income.
“We are looking at other sectors to which we can move in,” De Quiros told reporters in a press conference organized by the Philippine Information Agency.
SSS currently has equity investments in companies belonging to the telecommunications, mining, and banking sectors.
In particular, it has stakes in Philippine Long Distance Telephone Co., Philex Mining, Security Bank and Union Bank.
De Quiros said the pension fund manager would also consider investing in other sectors, perhaps even energy, to take advantage of potential growth of the stock market.
Under its charter, SSS can allocate as much as 30 percent of its funds for investments in equities. De Quiros said the state-owned firm so far has spent only 21 percent on equities, and so it could afford to invest as much as P20 billion more—the limit of its 30-percent allocation.
The state-owned firm earlier said it expected to generate P16 billion in net income this year—lower than the P22 billion it actually posted last year.
SSS sees its income from equities dwindling this year because the outlook for the stock market at the start of 2011 was not as bullish as that of last year.
However, De Quiros said SSS could expect to generate more income from equities after the stock market was projected to perform better in the months ahead.
Investments in equities account accounted for more than half of the SSS net income.
Current total investments of SSS stand at P286 billion. Of the amount, between P80 billion and P85 billion are in equities, while the bigger share of P108 billion is in government securities, De Quiros said. Other investments are in corporate bonds and loans to SSS members.
The country’s equities market posted a 5.82-percent gain in the second quarter, according to the financial services firm First Metro Investments Corp.
The mining and oil sector posted the highest gain of 37.43 percent, First Metro’s data showed.
The stock market has been buoyed largely by foreign portfolio funds. Foreign capital has been flowing into the Philippines and other emerging Asian markets and away from developed countries.—Michelle V. Remo