GSIS to invest $1B overseas
PENSION FUND ALSO DROPS PLAN TO SELL
12-PERCENT EQUITABLE STAKE
By Jun Ebias
Bloomberg
GOVERNMENT Service Insurance System (GSIS), a Philippine state-run
pension fund, said it is reviving plans to invest overseas and
that it may hire a fund manager to handle its investments.
The fund may invest
as much as $1 billion abroad, about a fifth of its total funds
available for investment, company president Winston Garcia told
reporters Tuesday in Manila. In May 2005, the fund said it may
invest as much as $300 million in bonds and stocks overseas. Garcia
didn’t explain why it still hasn’t done so.
Investing abroad will
help the fund boost profit, which is expected to rise to P40 billion
($760 million) this year from P37.7 billion in 2005, Garcia said.
Net income may rise to as much as P43 billion next year, he said.
“We cannot invest
all our funds in pesos and in the Philippines,” Garcia said.
“You have to diversify your risks geographically and in
terms of currency.”
The central bank, the
Department of Finance and the World Bank’s International
Finance Corp. will be asked to help select a fund manager that
will manage the fund’s investments at home and overseas,
he said.
THE GSIS, which owns 12 percent of Equitable PCI Bank, has dropped plans to
sell its stake in the third-largest lender.
“We will hold on to our Equitable
shares. As of now, we are no longer interested in selling,” pension fund
head Winston Garcia told reporters Tuesday. Garcia on April 5 had said a buyer
was willing to pay P95 a share to buy control of the bank.
The fund tried to auction its stake
in March, April and on May 8.
Garcia has been opposing a takeover
bid for Equitable from Banco de Oro. That bank had offered 1.6 of its shares
for every share of Equitable in January, the equivalent then of about P41.3
billion ($782 million). Banco de Oro said May 26 it may not pursue a merger.
Equitable PCI shares—which rose
to a six-year high of P82 on March 24 when Garcia first said he had a buyer
at P95 — fell 0.7 percent to P72 at the noon close of trading Tuesday.
The GSIS plans to initially invest $100 million overseas by the end of the year,
Garcia said. The fund manager may also be tasked to handle about P10 billion
of the company’s investments in the Philippines.
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