Philippine Daily Inquirer
First Posted 21:02:00 04/20/2010
THE SOCIAL SECURITY SYSTEM IS PLANNING TO ISSUE gold certificates to local retail investors backed by P1 billion worth of gold that the pension fund is offering to buy from the Bangko Sentral ng Pilipinas.
SSS president Romulo L. Neri said the plan was meant to provide a new investment opportunity that would serve as a hedge against currency fluctuations and help expand the country’s capital market.
Neri said the SSS had sent the BSP a written offer for the purchase of gold.
“Eventually, SSS intends to issue gold certificates,” he said. “With other major players in the capital markets, SSS hopes to establish a trading mechanism for the certificates in the Philippine Stock Exchange.”
Neri explained that the plan would also enable SSS to hedge part of its assets in gold reserves, widely considered a safe and stable investment and a haven for investors during times of currency uncertainties.
The law that created the SSS—Social Security Act of 1997—mandates the pension fund to invest in BSP-approved investment instruments.
The SSS investment portfolio includes placements in government securities, equities, member and development loans, housing and real estate.
According to Neri, the SSS has more than P260 billion in its investment reserve fund as of end-December 2009.
He said he expected gold trading to bring in additional income for the SSS aside from helping the BSP absorb excess liquidity in the open market.
In January, the SSS extended a P1-billion loan to Philippine Postal Corp. to enable the latter’s money remittance system to go electronic.
The loan package is part of a partnership between SSS and PhilPost related to the unified multi-purpose identification (UMID) system, which provides a single ID card for members of the SSS, the Government Service Insurance System, Philippine Health Insurance Corp. and the Home Development Mutual Fund or Pag-Ibig Fund.
When the UMID system has been rolled out, SSS members will be able to get payments for pensions, loans and benefits through PhilPost’s nationwide web of some 2,200 post offices.
*Even the government now realizes the potential hedge powers of precious metals, you should rethink your position and accumulate some for yourself.
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