The Government Insurance Service System (GSIS) said a shift to fair value accounting of its financial assets allowed it to post a significant increase in its net income in 2014.
In a press briefing on Friday, GSIS announced that the state-run institution posted P139.9 billion in net income in 2014. This represents a more than 200-percent increase from its P44.3-billion net income in 2013.
GSIS explained that while the figures were boosted by a shift to fair value accounting of financial assets, the underlying trends demonstrated solid financial performance as a result of continued collection efficiency and the better performance of the local equity and fixed income markets.
The agency’s total revenues for 2014 rose to P231.5 billion from P135 billion posted in 2013, while its assets now total P910 billion, an increase of 15.6 percent from the P788 billion at the end of 2013.
Claims and benefits paid to GSIS members and pensioners increased to P84.2 billion in 2014, a modest improvement from the previous year. GSIS pointed out, however, that 2013 payouts were inflated by the implementation of rationalization plans in various government agencies in the fourth quarter of 2013, it said.
GSIS added that its investment allocation is currently divided into 48 percent in fixed income instruments, 26 percent in members’ loans, 17 percent in equities, 4 percent in real estate and the remaining 5 percent in cash.
“The goal for this year is to sustain this momentum so that we can continue to provide responsive services and benefits to our 1.8 million members and stakeholders,” GSIS President and General Manager Robert Vergara said.
Vergara is also optimistic that the country’s economic recovery, which started in the fourth quarter of 2014 when gross domestic product rebounded to 6.9 percent, will continue to provide support for corporate earnings.
He said the economic recovery gave GSIS confidence that the economy has bounced back from the weak growth resulting from calamities and more cautious public spending.
“I think the economy should continue to grow at higher rate . . . which means that corporate earnings growth should be strong and should underpin valuations in the market,” he concluded. MAYVELIN U. CARABALLO