The state-run pension fund’s Social Security System (SSS) could finally complete its planned offshore investments next year once it is no longer forced to pay more benefits to hard-hitting members and retirees. affected by the COVID-19 pandemic.
“Right now we are trying to study the environment. We are definitely looking at global bonds, global equities and talking to overseas fund managers, ”SSS Executive Vice President for Investments Rizaldy Capulong said at a press briefing on Friday.
Under Republic Law (RA) No 11199 or Social Security Law 2018, the SSS can invest up to 15% of its investment reserve fund in foreign currency deposits or debts denominated in foreign currencies, blue chip and non-speculative stocks. Prior to RA # 11199, which amended the SSS charter in 2019, the cap on foreign investment was 7.5% of the fund.
The SSS may also invest in other financial instruments approved by Bangko Sentral ng Philippines or in other assets issued abroad.
RA No. 11199 requires that SSS investments in foreign instruments or assets be listed on the stock exchanges of the respective countries where they were issued. The issuing companies must also be profitable in the past three years and have paid dividends at least once during that period.
SSS estimates show that 75 billion pesos could have been allocated had the pandemic not occurred. Capulong said the crisis halted the implementation of the SSS’s five-year foreign investment plan, which began in 2019.
“We had to prioritize the needs of our members and retirees. Since COVID-19 hit us, we have prioritized member loans as well as retirement loans over securities investments, ”Capulong said.
“But… we are already seeing lower loan disbursements this year compared to last year, which will help [us set aside] more funds so that we can start investing abroad by next year, ”he added.
Capulong said the mandatory coverage of Filipino workers overseas under RA 11199 meant that the SSS would be prepared to invest those additional contributions sent from overseas overseas.
From January to the first week of September, the SSS collected about 159 billion pesos in membership dues, more than the 139 billion pesos in benefits paid out during the same period, Capulong said.
Including gains from its domestic investments, the SSS’s cumulative year-round revenue reached 192 billion pesos last week, while its total spending was 163 billion pesos lower, Capulong added.
Despite the protracted pandemic that has cut millions of jobs and shut down thousands of businesses, the SSS has continued to increase the monthly membership dues rate for members to 13% this year, from 12% previously.
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