Current and former members of the Government Service Insurance System (GSIS) board of trustees on Tuesday accused GSIS President and General Manager Jose Arnulfo ‘Wick’ Veloso of misrepresenting the pension fund’s financial performance as most of the investments he oversaw incurred significant losses.
In a statement, members of the board of trustees directly refuted Veloso’s and the GSIS’ ‘illusory growth metrics’ which paint a public narrative that the GSIS supposedly has a strong financial performance under his leadership.
They revealed that the reported asset growth of the GSIS was actually ‘based on misleading metrics and structural inflows,’ rather than genuine investment returns and explained that the increase primarily came from non-cash, unrealized gains from annual revaluation of the agency’s property portfolio and higher mandatory premium collections.
According to the members, this growth is an ‘automatic, structural feature,’ not an outcome of ‘strategic financial management.’
‘In stark and concerning contrast, our review indicates that the new investments introduced and endorsed by President and General Manager Veloso have overwhelmingly underperformed, with most, if not all, currently realizing significant losses,’ the members said.
‘The assertion that the current leadership has been financially accretive to the Fund is, therefore, contrary to the evidence,’ they added.
Furthermore, they accused Veloso of evading a mandatory Board review which was meant to provide a ‘crucial layer of scrutiny, risk assessment, and collective judgment.’
‘It was precisely by evading this mandatory review process that PGM Veloso was able to proceed with the high-risk, underperforming ventures that have now resulted in substantial losses,’ the board members said.
‘This failure of governance is not incidental to the losses; it is the direct cause of the financial damage inflicted upon the Fund and its members,’ they added.
Due to this, the board members called for a comprehensive review of Veloso’s underperforming investments and to hold those involved in the process by which they were allowed accountable.
‘Only through an honest assessment of the facts can we truly safeguard the future of the Fund and the welfare of its members,’ they said.
The statement was signed by Evelina Escudero, former trustees Ma. Merceditas Gutierrez, Emmanuel Samson and Rita Riddle, as well as former board members Alan Luga and Jocelyn Cabreza.
It comes just days after they called for the resignation of Veloso, claiming that his strategies had resulted in losses of P8.8 billion. /gsg