GSIS earns P16.5B from stock trades

Buoyed by the strong performance of the stock market, the state-run Government Service Insurance System (GSIS) booked P16.5 billion in gains from the capital market in the first 10 months of the year, more than six times the P2.4 billion registered the previous year.

The stock exchange has been on a bull run for the past weeks as a result of renewed investor interest in the country given the stable fiscal condition, robust remittances from overseas Filipino workers, low interest rates, and a stronger peso.

Of the total gains, P6.1 billion have already been realized from investments in stocks and bonds compared to P4 billion booked last year. Realized income from equities trading reached P2 billion or an increase of 131 percent from the year-ago level’s P864.2 million.

Gains from investments in Philippine bonds and notes likewise grew 32 percent to P4.1 billion from P3.1 billion a year earlier.

GSIS president and general manager Winston F. Garcia stressed the importance of supporting the stock market, being one of the key indicators of economic growth.

"As a government financial institution, GSIS has realized the need to take the lead in continuing to invest in the stock market as one of the cornerstones of a sustained capital market growth," said Garcia.

GSIS has about P150 billion in investible funds, of which approximately P30 billion are invested in the stock market, normally in a portfolio involving blue chip companies like San Miguel Corp. and Philippine Long Distance Telephone Co., among others.

"The GSIS is primarily responsible for the bullish investor sentiment on the market with its steadfast commitment to invest in the bourse particularly on blue chip companies," said Vivian Yuchengco, managing director of The First Resources Management and Securities Corp. and chairperson of the Philippine Association of Securities Brokers and Dealers Inc.

"All government financial institutions should follow their lead and make a strong commitment to invest in the stock market," Yuchengco added.

However, a measure that seeks to limit the investment options of GSIS could affect its ability to protect and provide benefits to government employees.