In 2023, the GSIS Management under the leadership of President and General Manager Wick Veloso achieved significant financial improvements, marking a substantial turnaround from the challenges of the previous year.
The GSIS generated a 33% increase in revenues in 2023 from Php234.9 billion to Php 311.3 billion. This translated to a 70% surge in net income from Php66.4 billion to Php 113.3 billion, and a staggering 3,903% rise in total comprehensive income from Php3.6 billion to Php 143.4 billion compared to the prior year.
Total assets increased by 11% from Php1.5 trillion to Php 1.7 trillion. These achievements reflect astute investing practices and are expected to extend the fund’s life, ensuring the pensions of its ~2.5 million members and pensioners.
The following highlights the key achievements and developments in our business.
Equities
The stabilization of interest rates played a pivotal role in boosting the value of our equity holdings, facilitating the reversal of our Php37.4 billion MTM loss in 2022 to a Php8.2 billion MTM gain in 2023. Additionally, management’s strategic move in accumulating 3.6 billion MPIC shares resulted in a one-time gain of Php13.6 billion. The recovery of US ETFs driven by a resurgent US market prompted Management to make a timely in the money exit. Last, the accumulation of strong local equity names effectively countered losses from legacy investments.
Private Equity
We are at the forefront of Private Equity investments in the Philippines, as we further solidified our position with an additional investment of USD300 million in the Global Infrastructure Partners Emerging Markets Fund this year. This substantial growth reflects our continued focus on leveraging opportunities in the private equity market to enhance portfolio diversification and long-term returns.
Loans
The loans receivable, particularly in the Multipurpose Loan segment, witnessed a significant uptick, soaring to Php209.6 billion from Php157.7 billion in the preceding year. This was driven by the launch of our innovative retail loan product to our members called MPL Flex. The GSIS also revisited the granting of corporate loans and project finance transactions. Our participation in the Php100 billion MRT 7 project finance loan in amount of Php7.5 billion further solidifies our presence in key sectors and supporting critical infrastructure development initiatives.
Insurance Business
The GSIS reported a record-breaking P9.8 billion in gross premiums written (GPW) for its non-life insurance business in 2023. This figure represents the highest GPW ever recorded in the history of GSIS. The GPW for 2023 has seen a remarkable increase of 44% compared to the previous year’s P6.8 billion. With a net worth of P51.26 billion in 2023, GSIS continues to stand as as the largest non-life insurer in the country.
Social Insurance Premiums
The GSIS collected Php177 billion in social insurance premiums, 17% higher than the prior year level of Php151 billion. On the other hand, the GSIS paid Php166 billion in pension and other benefits against Php157 billion paid last year.
Fixed Income Portfolio
In 2023, other comprehensive income excluding the remeasurement on insurance contract reserves, stood at PHP 30 billion, the highest since the COVID-19 pandemic and around PHP 93 billion or 148% greater than that of 2022.
Of the PHP 93 billion increase in other comprehensive income, PHP 57 billion or 62% is attributed to the mark-to-market gains of the GSIS’ holdings of PHP-denominated Treasury Bonds. This is driven by the investment of GSIS in high-interest rate PHP fixed income products amid favorable market conditions.
As of end-2022, total outstanding PHP government bond holdings stand at PHP 348.50 billion, with a weighted average coupon rate of 7.299%. Now, the GSIS has been strategic in its purchases of government bonds, ensuring that the weighted average coupon rate of its government portfolio remains at 7.294% by end of the year.
In fact, the weighted average coupon rate of new PHP fixed income investments during 2023 is at 7.047%, which is 80 bps higher than the average of the benchmark BVAL tenors (3Y, 5Y, 7Y, 10Y, 20Y) for the year of 6.247%.
With inflation returning to the BSP’s target range of 2-4% for December and having a downward trend, yields decreased at the latter part of 2023. This decline in overall yield levels increased the value of our high-yielding instruments, allowing us to book significant mark-to-market gains from our holdings.
Moreover, the GSIS has also been proactive in diversifying its investment outlets in the fixed income space. With its investment in the Republic’s offering of the maiden Tokenized Treasury Bonds (TTBs), it was able to show the adaptability of the GSIS in the business and infrastructure side amid the rise of modern technology.
Renewable Energy Investments:
In line with the Philippines’ commitment to sustainability and environmental stewardship, we bolstered our support for the renewable energy segment with a strategic investment of Php1.45 billion in Alternergy, supporting the development of 1,370 megawatts of renewable capacity. Additionally, the GSIS holds a significant 2.36% stake in ACEN, the largest renewable player in the country. This investment underscores our dedication to fostering a greener future while simultaneously seeking attractive returns for our stakeholders.