Law firm to help GSIS select fund manager

The Government Service Insurance System (GSIS) has tapped the Picazo Buyco Tan Fider and Santos Law Office to assist in the selection of a fund manager that would manage its P10- billion worth of securities.

The GSIS is trying to decide which one among the following will hire fund manager: Smith Barney, ING Barings, JP Morgan, and Merryll Lynch.

GSIS president and general manager Winston Garcia said the fund manager will handle its so-called index fund, a stock portfolio composed of at least 20 listed companies listed in the Philippine Stock Exchange (PSE).

"These securities are a mixture, much like the PSE index. We will dispose of the fund depending on the market conditions," Garcia said.

Likewise, the pension fund will acquire idle or underutilized government properties worth at least P6 billion.

Right now, the government fund is in the middle of negotiations with the Philippine National Railways (PNR) including a 12-hectare property in the Tutuban area. The property worth P1.8 to P2 billion is partly occupied by the Tutuban commercial center and its parking area.

It is also negotiating with the Philippine National Construction Corp. (PNCC) for a 13-ha undeveloped property in Pasay City with an estimated cost of P4.5 billion. However, the GSIS is negotiating for a much lower cost of P1 to P1.2 billion.

Another big ticket potential acquisition is a 12-ha undeveloped property in the reclaimed area in Pasay City. However, negotiations have not yet started.

"We are looking at good buys but we are interested in good discounts likewise," the GSIS president said. "We will be paying the acquisition in tranches to preserve our reserves, which stood at P190.82 billion at the end of 2001."

The GSIS is also awaiting the decision of the Quezon City local government and the Housing and Land Use Regulatory Board (HLURB) regarding a piece of idle property located in the Quezon Memorial Circle.

The Ayala Land Corp. and Henry Sy of the SM Group have already indicated an interest in a joint venture with the GSIS for the development of the property.

If it is HLURB and the local government rules that the property can be developed into a shopping mall, the SM Group has the edge. On the other hand, if it is ruled that the area should be used for residential or housing purposes, the Ayala Group may end up as the GSIS partner.

The land banking strategy would allow government agencies to gain liquidity and cover its losses arising from costs of maintaining acquired non-performing properties or under utilized assets.