NG settles P14-billion premium obligations to GSIS with T-bonds

The Government Service Insurance System (GSIS) received from the National Government some P14-billion worth of Treasury bonds in varying tenures as settlement for unpaid premiums. A memorandum of agreement (MOA) to this effect was signed Thursday by the Department of Budget and Management (DBM) and the Bureau of Treasury (BTr).

"Our expected yield will reach P1-billion per year under a 15-percent interest earnings," Winston Garcia, GSIS president and general manager, said.

The P14 billion includes both principal (P7.145-billion) and interest (P6.28-billion).

Of the P7.145-billion principal, P6.464-billion represents unpaid premiums from the National Government while the balance of P681-million represents unpaid premiums from local government units and other agencies.

Also part of the settlement is the transfer of land titles from the Philippine National Construction Corp. (PNCC) and the GSIS.

According to the PNCC the present property where the GSIS building stands is owned by the PNCC’s predecessor, the Construction Development Corp. of the Philippines (CDCP). The property currently occupied by the PNCC found beside the GSIS building was said to be allocated by the CDCP for GSIS prior to its construction.

The PNCC agreed to give the title for the property where the GSIS stands today to the government pension fund. The only condition is that they pay for the difference in the value of the present site (62,000 square meters) and the value of the original site which was only 57,000 square meters.

"We will be paying a difference of P15-to P18-million," Garcia said.

Earlier, the GSIS reported a 42.19-percent increase in net earnings from P5.409-billion in the first three months of 2000 to P7.690-billion in the same period this year.

The January to March performance was well within the pension fund’s yearend target of a 50-percent growth.

The main source of earnings will come from the premium contributions, which account for more than 60 percent of total earnings, with the estimated 40 percent coming from various investment instruments.

Net income for 2001 is projected to grow by at least 50 percent to P30 billion compared to the P20 billion the year before.

Last year, premium contributions reached P38 billion while gross revenues were placed at P52 billion. However, the premiums-to-investment mix is expected to change this year.

Gross revenues from January to March this year was reported at P13.131 billion, or 33.5 percent higher than the P9.832 billion in the same period last year.

Investments in the first quarter of the year reached P142.0 billion from P117.1 billion for a 21.32-percent growth. Reserves grew 15.28 percent from P150 billion last year to P173 billion this year.