State-run Social Security System (SSS) is eyeing to invest roughly about ₱75 billion of its trillion-peso reserve fund overseas over the next five years as it seeks to diversify beyond the “unexciting” domestic market.

SSS President and Chief Executive Officer (CEO) Robert Joseph Montes De Claro said during an event with Rizal Commercial Banking Corp. (RCBC) that the state pension fund is currently drafting a policy that would “enable SSS to also invest overseas” for the first time.

“Hopefully, there will also be opportunities so that SSS is not restricted to investing only in the Philippines. If there are interesting opportunities overseas, then we would also [invest], in a very controlled, secured way,” De Claro said.

As stipulated in the Social Security Act of 2018, 7.5 percent of the investment reserve fund (IRF) can be invested in foreign currency-denominated investments.

“Depending on the uptake, but probably within the next five years, we should have 7.5 percent of the SSS funds already invested outside the Philippines.” This would be equivalent to roughly $1.2 billion in investments, De Claro said.

Tapping the offshore markets will be gradual, beginning with a modest allocation, with De Claro stressing that the first one-percent investment would be the most challenging as board-approved policies need to be in place first.

This preparation for foreign investments comes against the backdrop of SSS’ rapidly growing funds alongside its assets, which now stand at ₱1.35 trillion. De Claro expects these assets to grow to ₱1.5 trillion by end-2026, ₱1.75 trillion by end-2027, and ₱2 trillion by end-2028.

Steering a chunk of the reserve fund to offshore assets comes as the pension fund is limited by local opportunities. De Claro said that the Philippine capital market is “not that exciting,” which could weigh on the profitability of SSS.

SSS booked a sharp surge in net income to ₱143 billion in 2025, fueled by improved collection efficiency and prudent fund management. This boosted total assets and pushed its reserve fund past the ₱1-trillion mark for the first time.

De Claro noted that a steady growth in earnings, when paired with a larger expansion in benefit payouts, would weigh on the net income of the pension fund—potentially lower than the 2025 record.

“[Earnings] won’t be at the ₱140-billion level, but we will be paying out more than ₱250 billion in benefits in 2026,” the CEO said, adding that most of the annual benefit disbursements are pension releases, which have recently been raised.

He further said that the benefits payout for this year will be more than 10 percent of what was recorded last year.

SSS’ net income fell by 28 percent to ₱48 billion in the first half on the back of higher benefit payouts to pensioners. Benefit payments, which took up more than four-fifths of total expenses, increased by 19 percent to ₱173.5 billion as of end-June from ₱145.7 billion a year ago.