SSS invests P3 billion in domestic mutual funds

MANILA, Philippines — For the first time, the Social Security System (SSS) has invested P3 billion of its investment reserve fund (IRF) in three mutual funds in the country, a move seen to yield higher returns for the state pension fund, its top official said yesterday.

SSS president and chief executive officer Emmanuel Dooc said the state fund last June 27 infused P1 billion each in PhilEquity Fund Inc., managed by Philequity Management Inc.; Sun Life of Canada Prosperity Balanced Fund Inc., managed by Sunlife Asset Management Co. Inc.; and Philippine Stock Index Fund Corp., managed by BPI Investment Management Inc.

“This is the first time in 61 years that the pension fund invested in mutual funds. The deployment of P3 billion in domestic mutual funds, although modest in size relative to SSS’ size of about P500 billion, is a significant first step in partnering with top local managers and has a lot of potential benefits,” Dooc said.

Dooc said this move is part of the state fund’s efforts in “broadening its market-intelligent sources, discovering best practices and learning new investing styles that may be highly suitable to SSS.”

“The competition brought about by performance-focused fund managers should result in improved total returns of the SSS funds,” he said.

In addition, the SSS chief said the investment is a testament to its confidence in the Philippine financial market.

“While the capital markets may be in its usual third quarter weakness brought about by inflation concerns and global trade war, and the longer-term view of at least two years, the SSS is confident that its deployment in the three mutual funds will be rewarding,” Dooc said.

According to Dooc, the three mutual funds were chosen through a “competitive and transparent” evaluation process.

The Social Security Commission, the policy making body of the SSS, approved the accreditation of the three mutual funds on July 12 last year, while the approval of the release of the P3 billion investment was made on June 20.

SSS said the deployment of the amount was done in six installments from June 27 to July 4.

“SSS’ investment in domestic mutual funds was made with due diligence and prudence in line with the basic principles of safety, good yield and liquidity,” Dooc said.