PHILIPPINE NEWS SERVICE — After cashing in on its equity investments over the past few weeks, state-run pension fund manager Government Service Insurance System said yesterday it is venturing aggressively into the real estate market because of unattractive returns on government securities.
GSIS president and general manager Winston Garcia yesterday told a press conference that a portion of its investible funds amounting to as much as P200 billion would be earmarked for real estate investments.
“The real estate market is now genuine and real and is still bound to grow,” Garcia said.
He said GSIS had offered to buy the 100-hectare Food Terminal Inc. in Taguig City and a 15-hectare portion of the Nayong Pilipino property from the government.
He said the pension fund manager had started negotiations with Philippine Reclamation Authority to take over the 800-hectare reclamation project of the botched Public Estates Authority–Amari joint venture earlier nullified by the Supreme Court in 2003. The property sits near Mall of Asia and the new business district of Pasay City.
Garcia told reporters that Agriculture Secretary Arthur Yap was receptive about the proposal of GSIS to buy the FTI property after the pension fund offered to fund the necessary infrastructure, such as the six-lane access road from C-5.
“This is a government-to- government transaction and we can give what the private sector cannot. This will also help pump prime the economy,” said Garcia.
The GSIS chief said the pension fund manager could get a return on investments of 500 percent to as much as 800 percent from its real estate investments over the next five to 10 years.
“We have to balance out the low interest rates offered by government securities. We are losing heavily right now and we are getting only 5 to 6 percent on our investible funds, below our 11 percent target,” Garcia said.
He said GSIS was looking at disposing some P10 billion worth of foreclosed assets over the next two to three years by cutting by half to 6 percent the interest charged on all housing loans through SAIS (Sais ang interest sa Lahat) and GMA HeLPS (Garantisadong Mababang Amortization na House en Lot Para Sa’yo).
“No other financial institution, private or otherwise, has reduced interest rates to 6 percent on all housing accounts. We hope others would follow suit so that in the end, our move to lower our rates would benefit the entire public,” he said.
Garcia said GSIS had raised P27 billion from the sale of its equity investments at the Philippine Stock Exchange over the last four weeks, including P14 billion from its interest in food and beverage giant San Miguel Corp.
Garcia said the pension fund manager was also set to pick a financial advisor that would manage at least $1 billion worth of investible fund in the international market.
He said GSIS would send out invitation to at least 30 financial managers handling at least $100 billion worth of funds by next week and pick the best advisor by July.