THE SOCIAL Security System (SSS) wants to have 5% of its Investment Reserve Fund (IRF) placed in foreign instruments by the end of 2027 as it looks to diversify its portfolio to maximize returns.
Newly-appointed SSS President and Chief Executive Officer Victor Alfonso A. Limlingan also said they want about 1% of the IRF invested offshore by year-end, with the pension fund already having some US Treasuries in its portfolio.
“We now spent a small amount, like $200,000, to buy US government Treasuries in dollars. So, those went up in value as the peso depreciated. We have invested offshore but in safe, secure US Treasuries. And it protects us if the peso depreciates. It’s a small amount but we start there,” he told reporters on Friday.
Under its charter, the SSS can only invest 7.5% of its IRF offshore.
Mr. Limlingan said improving the state pension fund’s investment returns will be key to cushioning the impact of the Philippines’ falling fertility rate and elevated inflationary pressures on contributions and its fund life.
“In the past, those who are old are hopeful because they have a lot of children to contribute. Now, the children are disappearing. We’re more reliant on investment returns. However, there’s what we call a golden moment because there’s a time when there are children so when they retire, even if they don’t have children, they save a lot for their retirement.”
He added that he expects the greenback to outperform other major currencies.
“I think the dollar will outperform the yen and the euro, so I’d rather hold dollars which will go up rather than euros and yen,” he said.
SSS Senior Vice-President and Capital Markets Group Head Reginald G. Candelaria said they remain cautious about investing in US assets as they are still in the testing phase.
“For this year, our intention is to invest about 1% of our investment reserve fund just to make sure that we can test the system… Now, in as much as our expertise are all domestic-driven, we need expertise. That’s why just a few days ago, we already published a bidding for an investment consultant … for the next two years for our foray into the investments in building the 7.5%. We’ll be guided by an expert. But at the end of the day, it will still be a decision by the board. But at least you have an expert that will guide us and check us out as we go into this venture,” he said.
Mr. Limlingan said the SSS is also eyeing investments in high-dividend companies, particularly those linked with mining and precious metals to help defend against the peso’s depreciation.
“There’s some companies who give high dividends, maybe 8%, and companies linked to precious metals. So if we have gold miners and copper miners, so if the peso weakens, the gold that they have will be sold at a higher price.”
They are also looking at the real estate sector, he added.
“We just go to the stock exchange and we look and see what we want to buy. But real estate’s a little harder because there’s no centralized real estate exchange. So, we’re dependent on market scanning to get good opportunities,” Mr. Limlingan said. “But hopefully, maybe in a year, we can lay the groundwork.”
The SSS also sees investment opportunities in public infrastructure such as rails or bridges, but he said this could be riskier and could be more for the long term.
As of end-September, the SSS had a total investment level of P1.304 trillion with an annualized return on investment of 4.10%. Of this, 49% was placed in government securities, 14% in equities, 13% in loans, 12% in real estate, 7% in corporate notes and bonds, 3% in bank deposits, and 1% each in an externally managed fund and a mutual fund.
It booked a net revenue of P62.741 billion in the first nine months, with total revenues worth P338.01 billion and expenditures of P275.268 billion.
Contributions reached P300.151 billion, while benefit payments stood at P266.308 billion.
The SSS’ total assets stood at P1.39 trillion, while liabilities were at P11.593 trillion, resulting in total reserves of -P10.203 trillion.
Meanwhile, Mr. Limlingan said they are also tying up with financial technology firms to set up a credit scoring system for the pension fund.
On the other hand, he said the SSS’ pension increase contributed the Philippines’ slight improvement in ranking in the 2026 edition of Marsh CFA Institute’s Global Pension Index.
Based on adequacy, sustainability, and integrity, the Philippine pension system’s score improved to 49.2 in 2026 from 47.1 in 2025, the report showed. Still, it had the fourth-lowest score among 55 retirement income systems included in the index, only ahead of India (46.8), Turkiye (46.6), and Argentina (43.7).
“The reason we’re low is not because SSS did badly but because we lack the other two: a mandatory provident fund, which is quite rare, and a voluntary savings scheme, which is PERA (Personal Equity Retirement Account). It has to be expanded. So it’s not really saying SSS is bad, but the pension system as a whole is lacking,” Mr. Limlingan said.
He added that the SSS has a limited ability to expand retirement coverage.
“They’re saying deduct more. But we know it’s hard to deduct because life is hard. We take 5% to 10%, but we know that’s a very hard thing to impose in these hard times on our employers and employees. We’re not a rich country, unfortunately. So, there’s a limit to how much we can deduct because so many people are living paycheck to paycheck.” — Aaron Michael C. Sy