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April 21, 2024

SSS Enlists LandBank and DBP as fund managers

The Social Security System (SSS) has designated the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) to oversee a total of P2 billion in funds, according to an announcement on Thursday.

On October 13 and 17, LandBank’s Trust Banking Group and DBP’s Trust Banking Group each received P1 billion in investible funds, as stated by SSS President and Chief Executive Officer Rolando L. Macasaet in a Thursday release.

Macasaet emphasized the anticipated advantages of engaging external fund managers to handle a portion of SSS’s investible funds. He noted that leveraging their expertise would aid in the growth of SSS funds and the diversification of the investment portfolio.

The management tenure for LandBank and DBP is set for the next three years, as per SSS.

These state-run financial institutions join BPI Asset Management and Trust Corp. as well as Security Bank Corp.’s Trust and Asset Management Group in overseeing SSS’s pure fixed-income investments.

As of November 16, SSS has assigned management responsibilities for seven investment mandates, totaling P8 billion, covering pure fixed income, balanced, and pure equity funds to five local fund managers.

SSS initiated the inclusion of local fund managers in its investment strategy in 2016, according to Rizaldy T. Capulong, SSS Executive Vice-President for the Investments Sector.

Under Republic Act No. 11199, also known as the Social Security Act of 2018, the SSS has the authority to appoint local or foreign fund managers to oversee its Investment Reserve Fund (IRF).

The IRF, a designated portion of the SSS Reserve Fund, is allocated for investments whose returns contribute directly to the reserve fund’s growth.

Ernesto D. Francisco, Jr., SSS Senior Vice-President for the Fund Management Group, emphasized that engaging knowledgeable fund managers aligns with global best practices, especially in the context of pension funds. This strategic approach enables pension funds like SSS to leverage the expertise of fund managers in frontier markets where they lack a competitive advantage, such as foreign investments.