MANILA, Philippines — State-run Social Security System (SSS) has deployed P7 billion of its investment reserve fund (IRF) to local fund managers as part of the pension fund’s efforts to diversify its portfolio and improve returns.
In a statement over the weekend, SSS president and chief executive officer Aurora Ignacio said the pension fund has tapped five local fund managers to manage P7 billion of its assets, to be invested in equity funds, balanced funds, and fixed-income funds.
Originally, the SSS opened the bidding for the services of nine local fund managers to administer the investment of P9 billion in funds. However, the SSS said only P7 billion was deployed to qualified fund managers.
Ignacio said the local fund managers underwent an open and competitive bidding and transparent evaluation process.
She said the fund was divided into three Balanced Fund Mandates, three Pure Equity Fund Mandates and one Pure Fixed Income Fund Mandate, each infused with P1 billion.
According to the SSS, BPI Asset Management and Trust Corp. bagged contracts to manage P3 billion in funds, or P1 billion each under all the three mandates.
SSS also deployed P1 billion each to Rizal Commercial Banking Corp., and ATRAM Trust Corp. under the Balanced Fund Mandate, while another P1 billion each was entrusted to Metropolitan Bank and Trust and Co. and Philequity Management Inc. under the Pure Equity Fund Mandate.
“The SSS management believes that it can benefit from the investment value-added services of the fund managers, such as training, access to proprietary investment analysis and information and access to business analytics,” Ignacio said.
Meanwhile, Ignacio said the remaining P2 billion IRF allotted for two more local fund managers will be open for rebidding this year.
Under the old charter of the SSS, the pension fund is allowed to appoint local or foreign fund managers to manage its IRF.
As of end-2018, the SSS’ IRF stood at P495.6 billion, 43 percent of which is invested in government securities.
About 19 percent of the total IRF is also invested in equities, while another 19 percent is allocated for loans to members. Three percent goes to bank deposits, eight percent to corporate notes and bonds, seven percent to real estate, and the remaining one percent to mutual funds.
Last year, the SSS tapped three local fund managers to manage P3 billion of its IRF and invest them in domestic mutual funds.
The state fund invested P1 billion each in PhilEquity Fund Inc., as managed by Philequity Management Inc.; Sun Life of Canada Prosperity Balanced Fund Inc., as managed by Sunlife Asset Management Co. Inc.; and Philippine Stock Index Fund Corp., as managed by BPI Investment Management Inc.
SSS, under the leadership of former president Emmanuel Dooc, previously expressed its intent to pursue an offshore investment program as part of its strategy to diversify investment portfolio and improve revenues.