State-run Government Service Insurance System (GSIS) is moving to double the share of its investment portfolio dedicated to loans to capture market share from private lenders and shield state employees from predatory debt cycles.

Jose Arnulfo “Wick” Veloso, GSIS president and general manager, told reporters that the pension fund aims to increase its loan exposure to 40 percent of its total investments from the current 20 percent.

Veloso said the shift is a fundamental change in how the institution views its role in the Philippine credit market. He noted that GSIS must view private cash lenders as direct competitors to drive improvements in member services and maintain relevance.

The expansion is specifically aimed at curbing the prevalence of “ATM-sangla,” an informal and often exploitative lending practice where borrowers hand over their debit cards and personal identification numbers to creditors as collateral.

Veloso said the aggressive growth in the GSIS loan book is necessary to protect government workers, particularly those in provincial areas who face significant debt burdens and lack access to affordable credit.

Under the newly launched GSIS Ginhawa Go Loan Program, qualified members can access credit ranging from ₱1,000 to ₱50,000. Short-term credit lines of up to ₱4,000 carry repayment terms of 30 to 90 days, while larger disbursements up to the ₱50,000 cap offer tenors between three and 24 months. Interest rates for the program are set between six percent and seven percent per annum, calculated in advance.

Veloso defended the pricing as the most competitive in the current landscape, despite market expectations of further monetary easing by the Bangko Sentral ng Pilipinas.

While the central bank's benchmark rate is widely anticipated to move toward 4.25 percent, Veloso maintained that the GSIS rate remains the lowest available to its constituency.

He added that while the pension fund is studying ways to offer even more favorable terms, the current structure represents the market floor for comparable credit products.

The shift into lending comes as the pension fund also looks to capitalize on a shifting interest rate environment, with Veloso noting that GSIS expects increased gains from its existing holdings of government securities following recent easing cycles.

In addition to traditional consumer and micro-credit, the fund is evaluating the introduction of loans specifically for stock market investment.

However, Veloso signaled a cautious approach to equity-linked lending, citing the need for robust financial literacy.

He said that members must understand the inherent capital risks of the equity market before such a product is rolled out. GSIS is currently waiting for the Philippine Stock Exchange to finalize relevant rules before determining the feasibility and timing of a launch.