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Philippine pension fund SSS hires two state-owned banks for 2 billion peso bond mandate

To date, SSS has awarded the management of seven investment contracts for balanced fund, pure equity fund, and pure fixed income fund
By Goh Thean Eu   
November 20, 2023

The Philippines' Social Security System (SSS) has hired two state-owned banks for a 2 billion peso (US$35.94 million) fixed income investment mandate for three years.

The amount was equally split between the Land Bank of the Philippines and the Development Bank of the Philippines.

SSS President and Chief Executive Officer Rolando Ledesma Macasaet says the banks each received 1 billion pesos in two tranches last month.

“They will manage the funds within specific risk parameters for three years to expand the SSS investment portfolio and generate more earnings,” he says in a statement on November 17.

According to Macasaet, the SSS will “greatly benefit” by outsourcing some of its investment funds to external managers.

“We can take advantage of their expertise to help grow the SSS funds and diversify the investment portfolio,” he says.

Ernesto Francisco Jr, senior vice president for the fund management group at SSS, adds that hiring qualified local asset managers has been part of its investment strategy since 2016.

“Tapping more investment savvy fund managers is a best practice worldwide, particularly with pension funds. This strategy allows pension funds like SSS to access the expertise of fund managers in frontier markets where they do not have a competitive advantage like foreign investments,” he says.

The SSS, which manages retirement savings of private sector employees, the self-employed, and Filipino overseas workers, had 773.39 billion pesos of assets under management as of end-2022.