Pension Funds Hit for Silence on Lehman Investment Exposure

By James Konstantin Galvez, The Manila Times

September 22 2008

Philippines

The Department of Education urged the state and private pension funds in the Philippines to reassure their members that they were not affected by the US economic crisis. 

Romulo Neri, president of the Social Security System (SSS), and Winston Garcia, president and general manager of the Government Service Insurance System (GSIS), owe their members an explanation in the wake of reports that a number of Philippine financial institutions have investment exposure in the troubled US banks, according to an Education department statement released over the weekend. 

Education Secretary Jesli Lapus issued the media release, after various teachers’ groups called on GSIS to issue an official statement if it has any exposure to Lehman Brothers, which filed for bankruptcy last week. 

The Alliance of Concerned Teachers, the Teachers Dignity Coalition and the DepED National Employees Union said they also wanted to be clarified on the extent of the effect, if indeed investments were made, by the GSIS. 

Alliance President Antonio Tinio demanded that GSIS be transparent about its overseas investments. 

And Domingo Alidon, president of the national union, threatened to file legal charges against GSIS if it fails to give members a satisfactory explanation about the state pension fund’s exposure on Wall Street. 

GSIS is the largest state insurance agency for government workers, which includes almost half a million teachers and non-teaching staff nationwide. SSS, for its part, is the biggest government-operated pension fund for private-sector employees and workers. 

Earlier, the central bank in the Philippines reassured the public that the total exposure of the country’s banks to the failed US financial institutions was a mere 0.3 percent to 0.4 percent. 

‘Secretive’ foreign investments 

The Trade Union Congress of the Philippines (TUCP) also on Sunday slammed the GSIS for its “absolute lack of transparency with respect to its investments overseas.” 

“GSIS pensioners and members are entitled to know how much of their money has actually been stashed overseas, and in what financial products the money has been invested,” said former Senator Ernesto Herrera, the trade union’s secretary-general. 

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