Size Matters

MANILA, Philippines – Just for fun, what is the government’s largest financial institution? Bangko Sentral? Wrong. Pagcor? Wrong.

The largest state financial institution has 1.7million members and assets worth R660 billion, with an actuarial life of 33 years (up to 2045). Its 300,000-plus pensioners need not worry: The fund is P400-billion liquid.

As far as GSIS is concerned, size matters. It’s bigger than its private counterpart, Social Security System. Members’ ID cards are good enough to be a national ID, with its biometric and security features, readable to 1,200 ATMs nationwide.

GSIS President and GM Bernardo Robert Vergara’s biggest source of pride is the “redeployment” of $600 million that had been invested abroad, but which found their way home last year despite the bugs that had infested the euro. As Mr.Vergara remembers, when Chairman Bitay Lacson gave him that assignment, his response was to swallow hard and take a deep breath.

But then, said Danny Gozo, a trustee, “Bernie” is no stranger to managing lots of money that does lots of moving around: arbitrage, hedge funds, derivatives, capital markets. Pensioners don’t have to know what these exotic practices are to know that they can sleep soundly at night. Bernie was an investment banker in Hong Kong before he was plucked for GSIS. His wife, a hedge fund manager, remains in HK; their children are in London studying.

As for GSIS’ P400-million art collection, including the famous Luna painting, A Parisian Life, its turnover to the National Museum for exhibition is inevitable, actually and actuarially, for the next 10 years. “Art is not our mandate,” explained Mr. Vergara.