STATE PENSION FUND Social Security System (SSS) has selected Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) to manage P2 billion in funds, it said on Thursday.
LANDBANK’s Trust Banking Group and DBP’s Trust Banking Group received P1 billion in investible funds received in two tranches on Oct. 13 and 17, SSS President and Chief Executive Officer Rolando L. Macasaet said in a statement on Thursday.
“We see that SSS will greatly benefit from tapping external fund managers to manage a portion of our investible funds. We can take advantage of their expertise to help grow the SSS funds and diversify the investment portfolio,” he said.
LANDBANK and DBP will manage the fund for the next three years, SSS said.
The state-run lenders join BPI Asset Management and Trust Corp. and Security Bank Corp.’s Trust and Asset Management Group in managing SSS’ pure fixed-income investments.
As of Nov. 16, SSS has awarded the management of seven investment mandates for its pure fixed income, balanced and pure equity funds worth P8 billion to five local fund managers.
SSS began hiring local fund managers as part of its investment strategy since 2016, SSS Executive Vice-President for Investments Sector Rizaldy T. Capulong said.
Under Republic Act No. 11199 or the Social Security Act of 2018, the SSS can appoint local or foreign fund managers to handle its Investment Reserve Fund (IRF).
The IRF is a portion of the SSS Reserve Fund allocated for investments whose income will go back directly to the reserve fund to help it grow.
“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,” SSS Senior Vice-President for Fund Management Group Ernesto D. Francisco, Jr. added. — AMCS