The Philippines’ audit commission urged the Government Service Insurance System (GSIS), a pension fund for the civil service, to prioritise recovery of money tied up in unprofitable investments, and to comply with statutory requirements before entering into future investments.
As of December 31, 2020, GSIS had invested 754.19 million pesos (US$14.96 million) in 16 unlisted companies, only three of which paid dividends last year, the Commission of Audit says in a report on December 5.
“We recommend that the GSIS management the Financial Management Group to prioritise the recovery of GSIS’ funds which are tied up in no-earning investments, and/or submit proof of monetary and/or non-monetary benefits received by the GSIS from these companies,” the commission says in the audit report posted on its website.
It says the pension fund should comply with the Government Service Insurance Act 1997, particularly on requirements for liquidity, safety/security and favourable yields, before entering into any investment- related transactions in the future.
According to the report, the management had told the commission that the fund does adhere to the requirements under the law, and that it will continue to recover any benefits from the non-earning investments.
“Also, [the GSIS] management emphasised that the identified non-earning investments are insignificant compared to the total size of the investment assets currently held and which yield better returns for the GSIS,” it says.
GSIS had 1.44 trillion pesos of assets under management as of end-2020.
