THE Social Security System (SSS) sees room to be more aggressive in managing its assets, as higher interest rates provide an opportunity to boost returns and push investment income toward P71.412 billion this year.
In a press briefing on Tuesday, SSS President and Chief Executive Officer Robert Joseph M. De Claro said the state-run pension fund booked a net income of P55.5 billion as of July 2026, up from P48 billion a year earlier.
Income from investments, which stood at P27.157 billion in the first half of the year, is projected to reach P71.412 billion by year-end.
SSS Executive Vice President for the Investments Sector Ernesto D. Francisco Jr. said government securities will be the biggest contributor to investment income, as they account for about half of the pension fund’s investment portfolio.
Of the pension fund’s total investments worth P1.271 trillion as of end-June, government securities accounted for P629.050 billion.
SSS expects a return of P34.748 billion by yearend from this, providing a stable and secure foundation for the pension fund.
‘We are comparing our portfolio regionally and globally. We are actually still quite conservative,’ Francisco said. ‘We should be adding a little more aggressiveness because half of our portfolio is in government securities.’
With the Bangko Sentral ng Pilipinas (BSP) raising the key policy rate to 5 percent, Francisco said SSS could also benefit from the high-interest-rate environment and earn better returns on new investments, with prospective investments expected to generate yields of around 7 to 8 percent.
‘But we cannot hope for interest rates to remain high forever because high rates also affect the overall economy,’ Francisco said. ‘Still, we have a very robust portfolio, and we have been here for 67 years.’
Fresh hostilities in the Middle East also present opportunities for SSS, particularly given its holdings in US dollars.
Francisco said the pension fund could potentially sell some of its dollar holdings to help fund the 13th-month pension, or annual cash gift, it automatically credits to all eligible pensioners.
‘Whatever the situation, we look for opportunities. That is what we focus on rather than dwelling on the situation,’ Francisco said.
By the end of 2026, SSS expects to have P15 billion in foreign investments, based on its year-end estimates.
Under its charter, SSS can invest 1 percent of its investment reserve fund in foreign investments during the first year. This can be increased by 1 percent for each succeeding year, up to a maximum of 15 percent of the fund.
Other sources of investment income include equities and member loans, with SSS expecting P8 billion from each, as well as corporate notes and bonds with returns of P5.363 billion by year-end.
‘A big thrust that we’re doing is we’re trying to improve our loan portfolio. Our loans on average earn 200 basis points more than government securities. But they’re almost as safe because they’re secured by their contributions or their pensions,’ noted Victor Alfonso A. Limlingan, commissioner of the Social Security Commission.
SSS likewise estimated P11.763 billion in income from its property investments by year-end, providing a stable and good source of returns.
SSS expects its assets under management to grow to P1.5 trillion by the end of the year from the current P1.3 trillion, representing an expected increase of about P200 billion, Francisco said.