GSIS net income down 22% to P49B

MANILA, Philippines - The Government Service Insurance System (GSIS) reported yesterday a 22 percent drop in net income  last year  due to a surge in the number of retiring members.

In a briefing, GSIS President Robert Vergara said preliminary figures showed the state pension fund’s net income fell to P49 billion in 2013 from P62.5 billion in 2012.

“The largest contributor to this is the claims and benefits we paid out. This jumped up primarily because there were rationalization plans the government put in place in 2013 and will continue in 2014,” Vergara  said.

Vergara added that applications for retirement in 2012 and 2011 averaged around 36,000 but this figure surged to as much as 49,000 last year.

“Whenever there’s a surge in retirement applications, lumpsums will have a significant impact on claims we paid out,” Vergara said.

Revenues last year increased three percent to P139 billion from P135 billion, while expenses went up 20 percent to P90 billion from P75 billion.

“Revenues include income from investments, interest income from loans, dividend income, realized games from financial transactions, and contributions from our members,” Vergara   said.

“The bulk of our expenses, meanwhile, are the claims and benefits of our members,” he continued.

GSIS also booked a P30.5-billion income from investments last year, down 10 percent from P34 billion in 2012.

Vergara said the pension fund had a P116 billion equity portfolio as of end-2013, P340 billion invested in fixed-income instruments, P212 billion in loans to members, and P31 billion in loans to the real estate sector.

GSIS is looking at growing its net income to P50 to P60 billion this year, slightly higher than 2013 levels.

Vergara explained that the forecast is still below what was achieved in 2012 as rationalization plans of various government agencies are still in full swing, resulting in foreseen increases in retirement applications.

This year, the firm is also looking at bidding out its properties located in Makati City, Sucat, EDSA, Mabini St. and Taft Ave. in Manila, and Bonifacio Global City in Taguig.