Insurers invest P14.84B in 2000

The country’s insurance industry invested at least P14.84 billion last year in various investment instruments including government bonds, corporate bonds, eurobonds, corporate loans, bank notes, government securities, capital markets, and commercial papers.

The initial amount is broken down as P7.999 billion in local currencies and $134.157 million (approximately P6.842 billion) from both life and non-life insurance companies including reinsurance firms.

Single biggest investment by a company in a given month was the P710 million made by the National Reinsurance Corporation of the Philippines (National Re). In April last year, it invested in P700 million in short-term government securities under a repurchase agreement and another P10 million on short-term commercial papers and promissory notes.

Single biggest dollar-denominated investment was undertaken by the Malayan Zurich Insurance Company Inc. for Citibank’s PEDRO investment product worth $50 million.

Biggest peso-denominated monthly investment was noted in January 2000 worth P1.426 billion. This was anchored on the P492.1-million common share acquisition by the Philippine American Life and General Insurance Co., Inc. (Philamlife) on the then Equitable Bank (P120 million) and AIG Credit Card Co. Philippines Inc. (P377.1 million).

In the same month, Great Pacific Life Assurance Corp. (Grepalife) invested P313.2 million in short-term commercial papers of the First Malayan Leasing and Financing Corp. and acquired shares of stock of YGC Corporate Services Inc.

Biggest dollar-denominated investment in a given month, was recorded in October 2000 amounting to $62.897 million.

Aside from Malayan Zurich investment in Citibank worth $50 million, Pru Life Insurance Corp. of the UK made a $5-million investment on high-yield reserve asset (HYRA) facility while John Hancock Life Insurance Corp. invested in eurobonds worth $5 million.

These are broken down on $1 million with the Philippine National Oil Corp. (maturity 2001), the Republic of the Philippines (maturity on 2006), another ROP 2008), the Bangko Sentral ng Pilipinas (2004), and Globe Telecoms (2009).

It must be noted that in the last half of 2000 investments sunk rapidly due to the deterioration of the political and economic climate. This was mainly prompted by the expose of graft and corruption including money laundering and illegal gambling involving the country’s head of state.

In terms of peso-denominated investments, P5.154 billion were registered in the first six months of the year but investments plummeted to P2.865 million in the last six months of 2000. It was the reverse in the dollar-denominated sectors strongly reflecting the lack of investors confidence in the Philippine financial and economic conditions.

From January to June 2000, dollar-denominated investments reach $42.94 million but this doubled to $91.217 million in the July to December period.

As expected the leading life insurance companies made the biggest investments last year.

Between Philamlife, Sun Life, Manulife, Insular Life and Grepalife alone, investments in peso-denominated investment products accounted for almost P4 billion of the total P7.999 million. – Ted Torres