The current Board of the Government Service Insurance System (GSIS) will recommend that its successor continue investments by the government workers’ retirement fund in much-needed infrastructure projects in the country through programs like the Philippine Investment Alliance for Infrastructure (PINAI).
“As we approach the middle of the year and the administration change, it is customary for agencies to prepare transition reports. The GSIS transition report will contain the things to consider. We are completing the write up on how this [PINAI] first infrastructure fund was invested,” GSIS President and General Manager Robert Vergara told reporters during a press briefing on Wednesday.
With the transition report, “We want to reach out to members. Inform them how that money was invested. How it is now helping address shortages in different parts of the country. How it’s supposed to improve transport links to Metro Manila,” Vergara said.
In 2012, the state-run pension fund partnered with Asian Development Bank (ADB), Dutch pension fund manager Algemene Pensioen Groep (APG), and Australia’s Macquarie Group to set up the $625 million PINAI fund to finance infrastructure projects in the Philippines.
GSIS allocated $400 million for the program while ADB gave $25 million. APG and Macquarie raised the remaining $200 million, while Macquarie Infrastructure and Real Assets (MIRA) was tasked to manage PINAI.
PINAI is part of the Ayala- and Panglinan-led joint venture, Light Rail Manila Corp., which won the contract to operate, maintain, and extend LRT-1.
PINAI has also funded a wind power project in Northern Luzon, and a solar power project in Negros.
Vergara said the GSIS would probably recommend the creation of another fund that can be called PINAI 2.
“We may invest at least the same amount but we will look at the kind of asset allocation and the portfolio it should have if the available returns on other investments continue to be attractive as they are now,” he said.
“Maybe we will start with another $400 million and then see whether there are other reasons to ramp the figure a little higher. There is no point in going up to a gigantic number. Once the investments are made, then we will revisit them and see whether the investment proposition of core infrastructure projects is still as attractive to fund later,” he said.
Vergara said GSIS is interested to fund core infrastructure projects on power, light rail, land farms, railways, and bulk water.
“There are a lot of very good projects, and if we were to earmark another $400 million or $500 million, it would not be that difficult to deploy given the needs of the country for these types of infrastructures,” he concluded.
GSIS posted a hefty decline in its net income for 2015 behind a huge loss in financial assets amid tighter financial markets.
The state-run pension fund’s unaudited net income in 2015 amounted to P48.85 billion, dropping 65 percent from the P140.22 billion net income in 2014.