MANILA, Philippines - The Social Security System (SSS), the state-owned pension fund for private employees, is currently cashing in on its stake in firms with small market capitalization as part of its portfolio management and investment strategy, its top official said.
SSS president and chief executive officer Emilio de Quiros, Jr. said the move to sell its stake in Phoenix Petroleum Corp. is part of that strategy.
The pension fund started selling its stake in Phoenix last year and it expects to complete the divestment this year.
“We’re completing that,” De Quiros noted.
SSS has a 9.68 percent stake in Phoenix, which the pension fund started accumulating in 2009. The oil firm is one of the companies approved for inclusion in the equities portfolio of the SSS under the pension fund’s Small Market Cap Investment Program launched in 2009.
Under the program, SSS invests in companies with small market capitalization to help these firms when they list in the stock market.
De Quiros said that it was time to cash in on these investments.
Apart from Phoenix, De Quiros said the pension fund is also reviewing its stake in the Philippine Stock Exchange of roughly five percent.
“That’s also under review,” he said.
De Quiros said the pension fund constantly reviews its various stake in different companies as part of efforts to grow its investments.
“If we need to cash in at a certain point, we do that,” he said.
Aside from small cap firms, the agency is also studying the possibility of selling its stake in mining giant Philex Mining.
“We’re open to selling that if the offer is good,” he said.
SSS owns 22.43 percent of Philex Mining and has not unloaded its block in the mining firm. SSS’ stake represents 1,103,565,052 common shares of Philex.
Philex Mining, controlled by Hong Kong-based conglomerate First Pacific Company Ltd., was incorporated in 1955 and is listed in the Philippine Stock Exchange. The company is primarily engaged in large-scale exploration, development and utilization of mineral resources in the Philippines.
In December 2009, First Pacific bought the 9.2 percent Philex stake of the Ongpin Group, the Development Bank of the Philippines and Walter Brown. It also bought the 5.9 percent stake of the Government Service Insurance System in January 2010.
De Quiros, who has extensive experience as a banker before he was appointed as SSS chief, said that while there are offers to buy the pension fund’s stake in Philex, these are carefully being studied because it is among the lucrative investments of SSS.
In 2009, the SSS under then president and chief executive officer Romulo Neri considered selling its sizable shares in Philex.