By Bankero staff
The Social Security System (SSS) is holding on to its 4.75 percent stake in a casino-linked company despite a warning from the Commission on Audit (COA), arguing that selling now would only lock in losses.
In its 2025 annual audit report obtained by Bankero, COA questioned the pension fund’s continued ownership of 460.39 million shares in a company classified under the casinos and gaming sector.”“Retaining this stake undermines principles of prudence and ethical investing,” COA said.
SSS defended the investment, saying “the investment has generated cumulative income of P535.900 million from trading gains and cash dividends and remains net positive on a lifetime basis when measured against the original carrying value.”
That positive lifetime record contrasts with SSS’s broader equity portfolio, where unrealized losses more than tripled from ₱11.6 billion in 2021 to nearly ₱40 billion in 2025, according to a separate COA finding.
SSS argued that depressed stock prices, weak tourism conditions and unfavorable market sentiment made divestment imprudent.
The pension fund accumulated most of its shares between 1998 and 2000, when the company was primarily a real estate developer. The company entered the gaming business in 2011 through the acquisition of a gaming subsidiary and participation in an integrated resort and casino project SSS has maintained its current shareholding since 2017. But COA maintained “the investment cannot be viewed merely as a passive legacy holding.”
COA questioned the continued exposure after SSS publicly declared in August 2025 that it had no investments in online gaming and no plans to enter the sector, amid a Department of Finance proposal to restrict government investments in online gambling.
Under the Social Security Act of 2018, SSS must manage members’ funds with prudence, diligence and due regard for safety, liquidity and returns.
Auditors recommended a comprehensive review of the holding, a documented divestment or risk-mitigation plan with specific timelines, and an investment policy explicitly excluding gambling-related businesses.
SSS acknowledged having no strict list of prohibited investment sectors, although it adopted an environmental, social and governance policy in 2019.
Management said it was reviewing the casino-linked investment for possible inclusion in a broader divestment or portfolio-rebalancing program covering underperforming stocks.
