The Government Service Insurance System (GSIS) plans to secure new investment opportunities as part of its efforts to diversify and enhance long-term profitability.

Wick Veloso, GSIS president and general manager said the fund has intensified its focus on alternative investments, including private equity (PE) and real estate.

PE investment involves investing in companies or taking a significant stake in firms in order to help them grow and increase their value.

“GSIS remains to be strong as we continue to search for yield to boost its generation of revenue. To this end we have increased focus on alternative investment including PE and real estate,” Veloso said in a statement on Monday, Feb. 19.

In 2023, the GSIS recorded substantial growth in its financial performance.

The pension fund’s revenue increased by 33 percent, reaching P311.3 billion, compared to P234.9 billion in the prior year.

Additionally, the net income surged by 70 percent from P66.4 billion to P113.3 billion in 2023.

Notably, GSIS posted a remarkable 3,903 percent increase in total comprehensive income, reaching P143.4 billion, compared to P3.6 billion in the previous year.

Despite the difficulties the markets faced last year, Veloso said that the GSIS’ strategic and proactive management of both its stocks and bonds portfolio yielded a favorable rate of return.

“We continue to push and do our best to boost long-term profitability of the GSIS and support the overall economy,” Veloso said. “We strive to establish a diversified portfolio by securing new investment opportunities.”

“Our risk profile has remained balanced with our fixed income having extended its average tenor to 7.8 years while maintaining average yield at 7.3 percenr in a climate of declining rates,” he added.

In November last year, GSIS made a P1.45 billion investment in the renewable energy firm Alternergy Holdings Corp. to expedite the development of the company's diverse clean energy projects.

Moreover, GSIS raised its ownership stake in Metro Pacific Investments Corp. (MPIC) to 11.98 percent from 3.3 percent.

Meanwhile, loans like the Multipurpose Loan (MPL) increased from P157.7 billion to P209.6 billion 2023 due to the launch of the MPL Flex.

Last year, the GSIS also reviewed corporate loans and other project finance institutions like the Manila Metro Rail Transit System (MRT) 7 project.

“Our participation in the P100 billion MRT 7 project finance loan in the amount of Php7.5 billion further solidifies our presence in key sectors and supports critical infrastructure development initiatives,” GSIS said.

Other positive factors include the highest record for gross premiums written (GPW) for non-life insurance businesses.

Last year, the pension fund had an impressive breakthrough of 44 percent from P6.8 billion in 2022 to P9.8 billion last year.

In terms of social insurance premiums, GSIS was able to collect 17 percent higher last year to P177 billion from P151 billion, while P166 billion was paid for pensions and other benefits.

Other increases considered were the insurance contract reserves, valued at P30 billion last year. According to the state pension fund, this was the highest record since the COVID-19 pandemic. This was because of the high-interest rate fixed-income products of their investments.

“Moreover, [we have] also been proactive in diversifying its investment outlets in the fixed income space,” GSIS said.

The insurance system showed its business adaptability through its investments in the Republic’s offering of the maiden Tokenized Treasury Bonds (TTBs), which are one-year and fixed-rate government securities.