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A group of
Spanish journalists were huddling around the president and
general manager of the Government Service Insurance
System, Winston Garcia, just days after having officially
launched the landmark $1-billion global investment
program.
The
Spaniards were winding down the interview as another
foreign journalist was ushered in also seeking an audience
with the former local government official who now heads an
institution with consolidated assets in excess of P400
billion.
Garcia’s
staff was everywhere and one was welcoming me to the GSIS
penthouse offices overlooking scenic
Manila
Bay
that I thought had a look I never saw before.
Right.
There was an H. R Ocampo hanging right behind the staff
that handles Garcia’s calendar, correspondences and
communications.
There were
several more paintings in the receiving room but I noticed
only the H.R. Ocampo because the distinctive color and
style was unmistakable. Several similar paintings hang
outside the fifth-floor offices of members of the monetary
board of the Bangko Sentral ng Pilipinas just a stone’s
throw away from the GSIS building.
“It’s a
form of investment. We have collected quite a number for
public viewing,” Garcia said many years earlier.
That
remark, many years old, came to mind even as Garcia was
counting off the merits of the billion-dollar global
investment program.
That’s
right. The GSIS was going truly global and while that was
in itself a wonderful event it was also a sad commentary
on the state of the country’s domestic capital market.
While
there are ongoing efforts to deepen and widen that market,
where big volume and high-value projects take many years
to complete and are matched with long-duration money, the
Philippine capital market is many years away from
maturity.
Garcia
said the GSIS would break many rules and he himself would
be hauled from pillar to post if he were to invest that
much money in what is now the Philippine capital market.
“One, I
would be cited for not optimizing returns on the money of
millions of government workers if I were to invest that
money locally. I have investment return benchmarks to
observe when I release that money and the Philippine
capital market simply cannot give it to me,” he said.
According
to him, the GSIS has not invested in the Bangko Sentral’s
special deposit account facility where the interest rate
is more than the 5-percent return for overnight borrowing.
The
official line, of course, is that the GSIS needs to
diversify its risk while meeting all the prudential
limits.
And media
mileage is created by the interest of foreign fund
managers in handling a Philippine portfolio of this size
no matter that he same cannot be invested locally unless
the GSIS wanted trouble to come down the heads of its
corps of managers.
Its choice
of money managers are some of the best in the world, with
a track record of astute wealth management and ability to
deliver specific returns.
Garcia
said awarding the portfolio to ING Investment Management
and to Credit Agricole Asset Management (Singapore)
Ltd. was granted solely on the basis of merits.
The
former, he pointed out, operated in the Philippines since
1990 and has some $503 billion worth of assets under its
care or under management.
ING vowed
to invest the GSIS portfolio in a mixture of high
dividend, property securities, fixed income and other
global alternative investment outlets.
Credit
Agricole, which has assets under management of some $725
billion, has a highly experienced corps of wealth managers
that has earned the respect of such global ratings firm as
Fitch Ratings.
Both vowed
to give back returns of 8 percent, far more than the
ceiling of maybe 6 percent if Garcia were to invest a
portion of that money in the BSP’s SDA facility.
The whole
point to the whole exercise, of course, is to project the
state-owned fund’s actuarial life as far into the future
as possible.
This
pertains to the ability to service the pension and benefit
requirements of GSIS members between now all the way to
2040.
But
Garcia, who continues to look for ways by which state
workers may benefit from their contributions, aims to push
the actuarial life further to 2100.
Success in
the program means 93 years of worry-free years for
pensioners and members, according to Garcia.
On the way
out from Garcia office was a sign urging employees to
report any acts of discourtesy to officers and the rank
and file.
Garcia
runs a tight ship at the GSIS but people think it a good
thing.
One is
struck by Garcia’s efforts at putting more culture into
the everyday life of employees and I made a silent vow to
check this by visiting the GSIS website and clicked its
arts and gallery section.
The
computer said the site was under construction.
Arts and
investments were both works in progress. |
