The Social Security System (SSS) is expecting to generate P71.4 billion in investment income by the end of 2026, with the bulk of its portfolio remaining in government securities as it seeks to balance higher returns with a cautious investment approach.
At its 69th anniversary press conference, SSS officials announced that they expect the pension fund’s investment portfolio to reach P1.441 trillion by year-end, resulting in a 6.11 percent return on investment.
The state-run firm expects to invest P724.11 billion in government securities, which will generate P34.75 billion in income.
The portfolio will consist of P191 billion in equities, projecting a yield of approximately P8 billion. Following that, member loans will amount to P153.67 billion, also projected to generate around P8 billion in income.
The fund will allocate the rest of its portfolio to capital markets, money market instruments, corporate loans and bonds, and property investments.
‘The key message here is we’re balancing the security of our members with the need to improve the service. It’s a tricky balancing act. You don’t want to be too conservative because then, you don’t generate enough income necessary to pay for pension. At the same time, you need to be a little more aggressive,’ SSS Commissioner Victor Limlingan said.
‘The balance is divided accordingly. We have corporate loans and bonds, equities, mutual funds, and experimental loans. A big thrust that we’re doing is we’re trying to improve our loan portfolio,’ he added.
Already, SSS’s total investments from January to June stood at P1.27 trillion, generating P27.2 billion in income. Breaking down the portfolio, SSS allocated P629.05 billion to government securities, P179.44 billion to equities, P154.56 billion to property, P151.90 billion to member loans and P96.34 billion to corporate notes and bonds.
Foreign investments
Notably, SSS has earmarked P15 billion for foreign investments this year, which would mark its first foray into offshore investments. It also plans to allocate another P20 billion for overseas investments in 2027.
However, the pension fund has yet to provide estimates on how much income these investments could generate.
SSS is reviewing other investment opportunities, including government assets for possible disposal.
‘We are constantly working with the team in the Department of Finance with regards to government assets, if SSS is interested. But we have always maintained a conservative approach,’ SSS President and CEO Robert Joseph de Claro said.
‘One consideration would be the capital appreciation,’ he added.
This year, the expected investment income will boost the state-run pension fund’s net income to at least P100 billion. This comes as SSS’ January-to-July net income had already slipped to P55.5 billion
Meanwhile, member contributions reached P235.33 billion, while expenses stood at about P7.1 billion. The Mandatory Provident Fund, a compulsory retirement savings scheme for higher-income members, reached P263.12 billion and covered 9.18 million members.