SSS eyes power sector for long term investment

MANILA, Philippines – The Social Security System (SSS) is looking at long term investments specifically on the power sector, its top executive said.

SSS president and chief executive officer Emilio S. de Quiros Jr. noted that the power sector is the most attractive investment option with a long term horizon. “There will always be a demand for power,” he said.

De Quiros explained that as the Philippine economy is moving decisively forward, the urgency of sustainable, uninterrupted and relatively inexpensive power becomes even more pronounced.

“Now that the economy is moving forward, homes and workplaces must have sufficient power. If we are to reach the next level of growth, energy must be accessible,” he added.

The state-run provident fund is focused mainly on the private sector, with the Government Service and Insurance System (GSIS) addressing the public sector.

The SSS has significant equity exposures in the mining sector through Philex Mining Corp., the property sector through Belle Corp., the banking and financial sector through the Union Bank of the Philippines (UnionBank) and Security Banking Corp., the power generation and distribution, utilities and infrastructure through First Philippine Holdings Inc. (FPH), and the telecommunications sector through the Philippine Long Distance Telephone Co. (PLDT).

The SSS has an investment pool reportedly worth P300 billion, spread out in options such as corporate loans and debt papers, loans of members, property and the equity market.

SSS executive vice president for investment Edgar B. Solilapsi said that they may still have some P15 billion in available investible funds. “Any investment must reflect prospective minimum earnings not less than six percent,” he said.

A maximum 30 percent of the investible funds are allowed to find its way to the equity market, followed by fixed-income instruments such as government securities and corporate papers, member loans and the property sector.

In the immediate horizon for investments in the power sector is the five-year, $2.5-billion worth of power projects of conglomerate Ayala Corp., whose power generation portfolio will generate a combined 1,000 megawatts (MW) from a combination of clean coal and renewable energy (RE) sources.

Aboitiz Equity Ventures (AEV) and its subsidiary, Aboitiz Power Corp. (APC), is also looking to invest in power generation and distribution as well as infrastructure projects in the next three to five years. In power generation alone, it has its sights on installed capacity of over 1,000 MWs worth at least P170 billion. AEV is the holding company of UnionBank.

Also in a three- to five-year investment timeframe, Global Business Power Corp. wants to build 1,000 MW in Luzon Global Business is the power generation arm of GT Capital Holdings, the holding company of the Metrobank Group.