THE Government Service Insurance System (GSIS) Family Bank has accumulated at least P2.5 billion in financial losses despite a capital infusion of P2.5 billion and an additional P1 billion from money market placements, a lawmaker said on Monday.
Rep. Rodolfo Valencia of Oriental Mindoro made the disclosure as he filed House Resolution 1731 calling for an inquiry into the losses incurred by the GSIS.
Valencia noted that it is puzzling that the GSIS Family Bank, a thrift bank, has been chalking up hundreds of millions annually in losses over the years, considering that the GSIS has helped the bank by coursing through it billions of money placements from 2006 to 2010 to reduce its losses.
“It is imperative and very urgent that the loss of the money of GSIS members, which include all of the congressmen and senators, their staff and those of both Houses of Congress, must be stopped along with the imprudent and unsound operations of the bank,” the lawmaker said.
Valencia added that the anomaly dates back to the Royal Savings Bank, then known as the Comsavings Bank, which later became the GSIS Family Bank, which was placed under receivership by the Central Bank without due process in 1984 after suffering a prolonged bank-run.
The stockholders of the then Royal Savings Bank agreed to sell at least 60 percent of their shares of stocks at par value and turn over control and management of the bank for it to be revived and recapitalized.
“Over the years, the GSIS Family Bank has been constantly losing money in atrocious amounts such that the GSIS had to infuse into it the amount of P2.5 billion on October 14, 1997 just to cover such accumulated losses. The income reportedly amounted to almost another P1 billion over the period but this again was lost down the drain without covering up the mounting losses,” Valencia said.
“Congress should look into the operations of the GSIS Family Bank and management to stop and end their detrimental and prejudicial effects,” he added.
