MANILA, Philippines — State-run Government Service Insurance System (GSIS) is planning to engage the private sector for the possible redevelopment of its idle assets, which would help strengthen the state fund’s financial position.
In a statement, GSIS chairman and acting president Rolando Macasaet said the state pension fund’s board of trustees is considering to enter into public-private partnerships (PPP) to transform its assets and boost its income.
“The GSIS board wants to understand how PPP works so that we can maximize use of GSIS’s property assets, for the benefit of our over two million members and pensioners,” Macasaet said.
“Through PPP, GSIS can redevelop its properties for productive or commercial use, which will boost our income and sustain our fund life,” he said.
In line with this, the GSIS chief, together with the GSIS board of trustees attended a seminar on PPP conducted by Philippine Reclamation Authority chairman Alberto Agra.
The GSIS board was briefed on various PPP modalities, including build-operate-transfer schemes, joint ventures, divestment, lease, management contract, service contract, real property swap and concession.
During the previous GSIS administration, it was the state fund’s policy to sell all of its non-performing assets.
It put together a plan to sell its 672,645-square meter property in Port Area Manila, which is estimated to have a market value of P33.632 billion.
However, it later on rescinded the board resolution granting permission to the sale, pending discussions with the International Container Terminal Services Inc. (ICTSI) and the Philippine Ports Authority (PPA) to settle disputes over the property.
Meanwhile, the last time the GSIS entered into a PPP was in 2012, when it partnered with the Philippine Investment Alliance for Infrastructure (PInAI). PInAI considered as the first private equity fund for infrastructure projects in the country.
The state pension fund last year committed to invest P16.764 billion in the fund, in line with its efforts to diversify its investments and generate higher returns.
In the first quarter of 2019, GSIS’ net income jumped four-fold to P38.7 billion from P9.05 billion in the same period last year.
The state fund attributed the increase mainly to the rise in stock market values, as well as the increase in interest income.
GSIS said its premium collections also grew by seven percent year-on-year as active members increase to 1.8 million this year from 1.7 million last year.
Total assets also reached P1.2 trillion, six percent higher than the level recorded in the same period in 2018.