Jose Arnulfo Veloso, more popularly known by his nickname Wick, has grand plans for the Government Service Insurance System, which will benefit not only the nearly 2 million public sector workers and over half-a-million old-age pensioners but the broader economy as well as the state pension fund mobilizes P1.55 trillion of assets it manages.
Veloso, president and general manager of GSIS, told Context.ph in an exclusive interview that beyond just buying government securities and claiming stakes in blue-chip listed companies, the state pension will also look at opportunities that will not only bring strong returns but also those that will create more jobs and help equip the economy attract more investments.
“We are making sure that we invest the funds of the government employees safely and at the same time get the returns to them,” said Veloso in the first of the three-part episode of Context.ph’s Beyond The Boardroom. “As GSIS invests, we are helping in nation building,” he said.
Veloso, who spent almost four decades in the banking industry eventually becoming the first Filipino to head HSBC in the Philippines, pointed out the expanding Philippine economy and population will increase in the next 25 years the demand for electricity, whose high cost is one of the major road blocks to increased foreign investments in the country.
“One of our goals is to help bring down the cost of electricity. We can do this by investing in power generation companies that are renewable and at the same time be able to bring the cost of power down. If we could invest in those type of businesses, it will be a lot of help to our countrymen,” said Veloso.
“Water, we all need water. This is a good infrastructure investment. The returns on these businesses are double digit,” said the former banker. “We‘d like to more and study the opportunities that allow us to get into these kinds of businesses.”
Veloso said the GSIS is particularly interested in the initial public offering of Prime Infrastructure Capital Inc., whose major assets include Maynilad Water Services Inc. and the Wawa dam. He said when Prime Infra’s IPO was initially broached to the GSIS last year, he expressed willingness to acquire the entire P40 billion offer of shares.
Prime Infra shelved the IPO last year but filed last month a reviewed share sale that could raise for the Enrique Razon-led infrastructure developer and operator around P33 billion.
“We need to be able to find new ways of making money that is going to make the returns better and at the same time consistently, and safe as much as possible,” he said.
Veloso said GSIS is also discussing with various government agencies to find a solution to help address the 7 million housing backlog in the country.
He said aside from GSIS’ own idle lands, the state pension fund is also willing to acquire lots held by other government offices to pursue high-rise residential projects that will be offered to government employees and the poorest of the poor. He said safeguards will be put in place to ensure only qualified persons are given the long-term rights to these residential condominiums.
“If you invest, you create jobs,” said Veloso. “Jobs equal more taxes, more taxes fix your budget deficit. A better budget figure allows your country to be stronger and allows us to grow,” he said.
Aside from looking after the financial future of GSIS members, Veloso said the state pension fund also has a duty to insure the assets of other government offices as well as also ensure that both members and retirees are served well by the GSIS.
“It pains me to see our retirees to go and follow up (their applications) in the head office,” he said. He said GSIS is now putting in the finishing touches to its own computer application to ensure the services of the state pension funds are readily available to the members and retirees on their computers or mobile gadgets.
Last year, GSIS generated a record high P6.8 billion in insurance from other government offices by pushing employees to be more aggressive in securing public sector assets, he said.
