It’s all about public trust

For workers in government, every peso deducted from their salary for their contribution to state-administered insurance funds is a seed planted for the future. But lately, concerns have swirled around the management of the Government Service Insurance System (GSIS) under its president and general manager Arnulfo “Wick” Veloso, who the ombudsman suspended for six months without pay. 

Veloso, who concurrently sits as GSIS Board of Trustees vice chairman, along with six other GSIS officers were all placed under preventive suspension. GSIS executive vice president for support services Juliet Bautista was named officer-in-charge.

Allegations were hurled and speculations quickly spread. For the accused government officials who might have actually done their job above board, they immediately served their suspension. Meanwhile, they pay out of their own pockets to get services of a lawyer.

But when the case involves retirement funds, even a whisper of doubt can unsettle the 2.7 million government employees and retirees who rely on GSIS. What are the facts before Veloso et. al. got suspended?

From the horse’s mouth, so to speak, Veloso related the bare facts when he reported before us at the Tuesday Breakfast Club last week how the GSIS grew its assets by more than P300 billion in just three years under his stewardship. From P1.54 trillion in 2022, he noted, the fund rose to P1.88 trillion as of June 2025. With 40 years of banking and finance background before he joined the GSIS in 2022, Veloso took pride in that this growth came without any increases in GSIS member contributions and without tapping additional government fund support.

Veloso noted the projected actuarial life of the state-run retirement fund agency has now been extended until 2058. That means three more decades of benefit certainty for millions of public servants. 

The suspension of these GSIS officials came after the Board decided to invest in P1.45 billion of non-traded preferred shares, not in tradable common stock, in Alternergy. A renewable energy company listed on the Philippine Stock Exchange, the investment in Alternergy was presented to the GSIS Board by Investment Capital Corp. of the Philippines (ICCP) – a trusted investment bank – and was scrutinized by the GSIS Investment Team.

As calculated, he cited, these shares offer P118 million in fixed annual dividends over seven years, with the entire capital returned in full at the end of the term. The expected total return is P2.2 billion. This Board’s decision to invest in Alternergy supports the country’s shift to clean windmill source of energy while earning returns for the GSIS.

So how come Veloso got suspended for such investment decision done by the GSIS Board? 

Another GSIS Board decision to invest in DigiPlus also drew criticism. To certain quarters, it was labeled as “gambling” stock. Actually, DigiPlus is a holding company, publicly listed and regulated, and was added to the PSE Index. DigiPlus is valued at P365 billion with a target price of P81 per share. But isn’t investing in stocks a gamble? You either win or lose, depending on how well you play the stock market.

According to Veloso, the GSIS exposure in DigiPlus is just P1 billion, or 0.13 percent of its total investment portfolio. Further, he explained, the decision to invest came after internal review and was based on the company’s financial fundamentals, steady dividend record and plans for international expansion in Brazil and South Africa.

Veloso argued all these questioned investments were reviewed by the GSIS Investment Team composed of elite chartered financial analysts (CFAs) and risk managers. Thus, he swore, he acted within the scope allowed by GSIS policy and Republic Act No. 8291 that provided, among other things, approved investments must be cleared by technical teams. These transactions were likewise part of the Management Report and submitted to the GSIS Board of Trustees, he added.

Being tasked as fund managers and investment officers, he stressed, they considered time-sensitive opportunities aligned with risk appetite and return of investment objectives. Passing on these secured earnings on investments would have meant leaving real money on the table, he insisted.

“So, where is the ‘mismanagement’?” Veloso rhetorically asked.

As of today, he reported, 72 percent of the GSIS portfolio remains invested in low-risk assets such as government securities, loans to members and real estate. The rest are structured investments. To some who claimed as reckless such investment decisions, Veloso pointed to the GSIS financial data to support reasoned diversification.  

Equally troubling to Veloso is how some of the details behind these transactions were leaked selectively and used to frame a misleading narrative. Investment information on this scale is commercially sensitive. When released out of context, he rued, it invites unnecessary panic and opens the fund to risks created not by market movements but by speculation and misinformation.

When the numbers are strong, the process is documented and the institution has not faltered, the public deserves to ask whether all the fuss is really rooted in truth, or simply ill-motivated noise. So it must be grounded in facts, not mere innuendoes spread in “fake news” that proliferate in social media.

Sadly, here’s what gets drowned out in the noise. The real story of lives touched. The flagship loan programs of the GSIS dubbed as Ginhawa Flex and Ginhawa Lite programs. “Ginhawa,” which means comfort or relief, gives government workers hope of comfortable monthly pension when they retire. It also gives the lowest interest rate in the market and raising dignity of 1.9 million government employees freed from the clutches of loan sharks. 

After years of teaching in overcrowded classrooms, serving in hospitals with delayed hazard pay, guarding our streets or toiling in the quiet corners of government offices, they can finally look forward to their retirement funds to sustain them in the twilight years of their lives.

The issue is about public trust and long-term stability. It is about delivering on the promise of comfort that every civil servant works a lifetime to earn. For Veloso, the record of the GSIS Ginhawa program will be his strongest defense.