Social Security System President and Chief Executive Officer Romulo Neri said the pension fund remained on target to achieve a record P26.1 billion investment income this year, despite the meltdown of the financial markets in the United States, which has affected other economies in the world.
“Our present investments amounting to P216.9 billion are all in the local markets. These include government securities, which are virtually risk-free, and shares of stocks of blue-chip companies, corporate debts, housing and member loans and properties,” he said.
SSS’ funds are invested in accordance with its charter, which has put caps on investments here and abroad, Neri said.
The institution has the mandate to invest up to 7.5 percent of its reserve fund overseas, but it stayed away because of unfavorable investment climate and global turbulence. Instead, the SSS decided to optimize earnings in the local market.
In line with its P26.1 billion target for the year, the state-run SSS already earned a total of P21.0 billion in investments from January to July 2008.
Income from equities alone totaled P14.2 billion, which was 28 percent more compared with the same period last year. Earnings from government securities rose by 40 percent, amounting to P3.7 billion.
Under the Social Security Law, the SSS could only buy shares of stocks in companies which has paid dividends at least once and has posted profits during the last three years, Neri said.
“Our charter, which is very strict, allows us to invest only in companies with proven profitability and viability,” he said, adding that the fund was able to weather similar market shocks in the past such as the Asian financial crisis in 1997.