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Philippine president says he fired pension fund GSIS's head

By Asia Asset Management  
Jul 9, 2019

Philippine President Rodrigo Duterte says he sacked the head of the Government Services Insurance System (GSIS) last week although his own office had issued a statement earlier saying that the pension fund’s chief, Jesus Clint Aranas, resigned for personal reasons.

The move comes at a time when Mr. Aranas had been looking to sell a 78-hectare land at the Manila North Harbour which is currently occupied by International Container Terminal Services Incorporated (ICTSI), a company controlled by Philippine tycoon Enrique Razon.

GSIS says in a statement on July 4 that this plan is now on hold. It says Mr. Duterte has named GSIS Chairman Rolando L. Macasaet as officer in charge of the pension fund on the recommendation of Finance Secretary Carlos G. Dominguez.

According to a person familiar with the matter, Mr. Duterte and Mr. Aranas had been on good terms previously but their relationship soured when Mr. Aranas moved to sell the port area land.

“It is believed that Mr. Razon is a big supporter of [Mr. Duterte] and contributed a lot to his campaign,” the person tells Asia Asset Management (AAM), speaking on condition of anonymity.

Mr. Duterte said in a speech on July 5 that he had "just fired the president of the GSIS yesterday", framing it as a fight against corruption in the government.

"I will deal with corruption. I'm dealing [with] it until now. I just fired the president of GSIS yesterday...And I try to really stop the corruption in the higher crust of government," according to a video recording of Mr. Duterte’s speech when he officiated the launch of a rice processing complex in Leyte, southeast of Manila.

But in a statement the previous day, Salvador Panelo, the presidential spokesman, said Mr. Aranas resigned for "personal reasons" and that Mr. Duterte accepted it "due to reports and allegations that there had been impropriety in the management of the GSIS leading to loss of confidence".

The July 4 statement was subsequently revised to drop any reasons for Mr. Aranas' exit. Mr. Panelo did not immediately respond to questions from AAM.

Mr. Duterte picked Mr. Aranas to head the GSIS in November 2017.

The GSIS statement says Mr. Duterte accepted Mr. Aranas' resignation on July 2 and that the pension fund has “revoked all resolutions relating to the proposed sale of the GSIS's port area property until further study and consultation with all stakeholders".

A report published by Philippine news website Rappler on July 4 cites ICTSI as saying that GSIS only has a "naked title and has no right to use or sell" the property.

Spokespersons for GSIS did not immediately respond to questions from AAM.

GSIS, which manages retirement savings of public sector employees in the Philippines, had 1.1 trillion pesos (US$21.43 billion) of assets under management at the end of 2017.