GSIS revenue rose 14% in 1st 7 months

The Government Service Insurance System’s net revenue in the seven months to July increased by 14 percent year-on-year to P46.4 billion, from P40.7 billion, as its equity investments rose due to the economy’s fair performance.

GSIS president and general Robert G. Vergara Friday said in a briefing that, as of July, the pension fund was “tracking very well and very much above what we have budgeted.”

Gross revenue jumped 15 percent to P79.8 billion during the comparative periods, while total spending rose 16 percent to P33.4 billion.

Bulk of the P4.6-billion increase in expenditures was due to an increase in claims and benefits, Vergara said.

“We treat claims for pensions as expenses,” he explained. “It’s not that we’re spending a lot more to maintain our business, [but] we’re paying out more to members for benefits they receive.”

Also, Vergara said, GSIS has been more active with its equity portfolio this year.

Equity investments went up 29 percent to P86.5 billion in July from P67.2 billion at end-2011.

“We started [under the Aquino administration] in an underweight position in equities and we were building our equity portfolio all year in 2011,” Vergara said.

As of July, equities account for 13 percent of the GSIS’ total portfolio—including loan receivables—of P652.3 billion.

According to the GSIS chief, the pension fund wants equities to account for about 15 percent of its portfolio equivalent to about P100 billion.

“We’re still optimistic, we really think the Philippine market—despite its current level—could move higher in the next 12 to 18 months if only because of country specific factors,” Vergara said.

“We have a lot of fiscal room to invest in the economy, we have banks which are very well capitalized, liquidity is there, and [the national government’s] debt position is improving,” he added. “All that suggest to me that, in the next 12 months, there will be strong support for equity earnings.”

Vergara said the GSIS “likes” stocks in banks, construction and gaming. The agency is “neutral” on utilities, but wants to “revisit an underweight stance” on telecommunications.

For the rest of the portfolio, fixed income investments get the biggest slice at 44 percent, or P289.7 billion. In terms of value, this was a 9.5-percent increase from P264.1 billion in December.

Outstanding loans to members amount to P195.2 billion, or 30 percent of the total. Real and other properties are valued at P34.6 billion (5 percent) while cash and cash equivalents are pegged at P46.4 billion (7 percent).