SSS to stay out of stock market for now - Neri

DAVAO CITY, Philippines — The Social Security System (SSS) will try to steer clear of the stock market this year, in favor of industries instead that will yield predictable returns, as it takes a more conservative stance in investing, the fund’s president, Romulo L. Neri, said here on Wednesday. At a gathering of SSS officials here, he said the pension fund has a total "investible fund" of P200 billion but will not invest much in the volatile bourse and look for opportunities other than real estate, since the agency has reached the allowed ceiling of 6% for the industry. The safest investments would be treasury bills although they only generate a small profit, he said. The agency, he said, is seriously considering putting in P12.5 billion for the planned P330 billion infrastructure stimulus package of the government. Based on the plan, one-third of the total package will be funded by the private sector and government financing institutions, roughly P50 billion will be equally shouldered the SSS, Government Service Insurance System, the Land Bank of the Philippines and the Development Bank of the Philippines. "But we haven’t committed any money yet," he said. Earlier, Cebu Rep. Ramon Durano, House committee on economic affairs chairman, asked Mr. Neri to justify the P12.5-billion share of the SSS. Party-list representatives like those from Gabriela and Bayan Muna have also demanded an explanation from Mr. Neri on the "highly questionable" investment. Mr. Neri said the agency wants to secure a guarantee from the government to protect SSS assets as well as to increase the return to up to 10%, from the indicative yield of 8%, in the proposed stimulus package. "The P12.5 billion is only five percent of the total investible fund of SSS," the official said, explaining that the SSS charter has prudential guidelines when it comes to investments to ensure liquidity. The SSS charter, he said, allows a ceiling of 6% of real property, 30% for infrastructure, and 40% for treasury bills and government assets. The SSS has zero exposure in the global market. — Joel B. Escovilla, BusinessWorld