CalPERS investments in RP up 16.5% to $78.33-M

The California Public Employees Retirement System (CalPERS), the biggest pension fund in the US, has been gradually increasing its stock investments in the Philippines, based on a study conducted by the Philippine Stock Exchange (PSE).

Available records show that CalPERS’ investments in local stocks amounted to $78.33 million as of its last fiscal year ending June 30, 2005, up 16.5 percent from $67.25 million at the previous fiscal year.

In determining the value of the CalPERS investments in the Philippines, the PSE reviewed the individual stocks that the pension fund held at the end of June 30, 2005, PSE president Francis Lim said.

Lim said the exchange also tracked the investments of CalPERS in the Philippines by going over the reports of the pension fund as far back as June 30, 1999. In that year CalPERS kept $57.27 million in local stock market investments. But the amount dropped to $19.29 million in 2000, fell further to $16.82 million in 2001 and settled at $12.46 million in 2002, its lowest since 1999.

"I think 2002 was the time when CalPERS entertained its worst doubts about our country’s future," Lim recalled.

But in 2003, CalPERS’ investments in the local stock market surged to $41.86 million and grew further to $67.25 million a year later and to $78.33 million at the end of its last fiscal year in 2005.

"If we were to annualize the rate of growth of CalPERS‚ investments in local stocks from 2002 up to 2005, the increase would average 104 percent," Lim said.

"I expect other investors to take their cue from CalPERS, because its decisions influence the global direction of managed funds. So, now is the time to invest in the Philippines, while we are just about to stage a bull run," Lim further said.

The PSEi, which tracks the movement of local stock prices, has so far gained 20 percent since the start of the year, helped by favorable developments in the political and economic fronts.

Lim said he believes that the value of Philippine investments of CalPERS may have reached $106 million at the end of April 2006, which means that the pension fund realized a 35.3 percent gain in just a period of 10 months.

"That’s three times faster than the rate of increase of its investments elsewhere," Lim said.

Lim drew the conclusion, based on available information that showed that the yield of the pension fund’s investments worldwide averaged only 11.2 percent from June 30, 2005 to February 2006.

"The gains, which CalPERS is enjoying now, are sufficient proof that it has made the right decision to invest in the Philippines," Lim said.

CalPERS is the second largest pension fund in the world with a global portfolio estimated at $207.1 billion as of February 2006.

The Philippines earlier earned a higher score in a crucial review among 27 emerging markets.

It was assigned an average score of 2.13 or 0.13 of a percentage point higher than the two threshold rating that Wilshire gave to the Philippines last year.