GSIS has hired foreign asset management companies, Cerberus and Lehman Brothers to review the possibility of acquiring and managing the problem loans, said GSIS president Winston Garcia.
"They are now conducting due diligence on the bad debts," he added.
Unofficial estimates indicate that GSIS was saddled with P30 billion in non-performing assets in 2001. The state pension fund had a net income last year of P25.6 billion, down from an earlier projection of a P33-billion net income. Garcia cited the recommendation of the Commission on Audit (COA) as the reason for the sealing down.
"They want us to make provisions for the huge burden of the NPLs and the losses from stock transactions made by the previous administration," the GSIS official said. That would be roughly 28 percent better than the P20-billion net earnings registered in 2001.
Only 40 companies or institutions account for the P22-billion NPLs, Garcia said. That includes the National Home Mortgage Guarantee Fund, Empire East Properties, local government units, and the National Government.
Income from investments reached P14.0 billion. Of the total, half of the earnings came from salary loans from members, 15 percent from equities, another 12 percent from commercial loans, and the balance from other activities.
Meanwhile, GSIS slapped a 90-day suspension without pay on two senior officials "for betrayal of the confidential nature of their positions as GSIS lawyers and open defiance of the rules and regulations of public sector unionism," Garcia said.
Put on hold were lawyers Mario Molina of the litigation department and Albert Velasco of the investigation department. GSIS is also preparing to file administrative charges against another five rank-and-file members for grave misconduct.
Garcia charged that Molina, Velasco and the five rank-and-file members participated in a protest action last Wednesday at the GSIS grounds during working hours. They were supported by outsiders seeking the ouster of the pension fund president.
"As far as the management and the legitimate union of GSIS are concerned, the work force of this institution is not on strike. As a matter of fact, both management and the union are deep in negotiations for a new collective bargaining agreement," the GSIS president said.
GSIS believes that the protest action was the handiwork of "a sinister alliance of businessmen and politicians to discredit not only the GSIS management but also the entire Arroyo administration," he added.
However, Garcia refused to name the members of the "sinister alliance."
In a report, GSIS said there is a strong possibility that the people behind the protest actions were also behind the behest and midnight loans made in the previous administration. "We made this startling discovery as we were embarking on a program to clean up the institution’s various loan portfolios," Garcia said.