philippine investment alliance for infrastructure fund by mario aguja

Dr. Mario “Mayong” J. Aguja

Trustee, Government Service Insurance System (GSIS), Philippines

“Pension Towards Socially Responsible Investment”May 3, 2013, New Delhi, India

The Philippine Investment Alliance for Infrastructure (PINAI)

Fund

"The views expressed in this paper/presentation are the views of the author(s) and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent. ADB does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented, nor does it make any representation concerning the same."

•GSIS is a government –owned and controlled corporation (GOCC) created by law under Republic Act 8291 otherwise known as the Government Service Insurance Act of 1997 which amended the 20-year old revised charter of the GSIS, known as Presidential Decree No. 1146.

•GSIS is a premium-based social insurance for government employees, with

Premium Sharing defined by law•Govt. provides 12% of basic salary •Member provides 9% of basic salary •Total contribution = 21%

•Benefits are fixed by law

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The GSIS covers all government workers irrespective of their employment status, except:

•Members of the Judiciary and Constitutional Commissions who are covered by separated retirement laws;

•Contractual employees who have no employee-employer relationship with their agencies;

•Uniformed members of the Armed Forces of the Philippines and the Philippine National Police, including the Bureau of Jail Management and Penology and the Bureau of Fire Protection. (since 1997).

GSIS Membership (1,784,006)

Assets, Liabilities and Networthas of Dec. 31, 2012

In USD*

Total assets 17.7 B

Total liabilities .452 B

Total reserves 15.9 B (16.4 B)

surplus 1.8 B

Total networth (17.7 B - .452) $17.3 B

*USD 1=PHP 40.9

Loan and investment portfolio as of March 2013, in USD billion = USD17.8B

GSIS Investment Policy

Sec. 36, RA 8291

“…That investment shall satisfy the requirements of liquidity, safety/security and yield in order to ensure the actuarial solvency of the funds of GSIS…”

The Phil. Investment Alliance for Infrastructure or PINAI Fund

A private equity fund for infrastructure development in the Philippines

Its an investment alliance between ADB, GSIS, Algemen Pensionen Groep (APG) of The Netherlands and Macquaire Group

Macquarie Infrastructure and Real Assets (MIRA), a global infrastructure asset manager, will serve as the investment manager

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Why the need for PINAI Fund?

To help develop infrastructure financing solutions in the Philippines

Foster Philippine capital market development

What’s in it for GSIS?

Invest in infrastructure projects which offers higher returns than Phil. government securities

Partnership will increase the amount of investible funds and spread out risk

Leverage the multilateral organizations expertise and access their vast resources of networks

Provide comfort that the highest levels of professionalism, corporate governance and international best practices will be followed.

Safeguards and social dimensions

The investment is classified category F1 for impacts on the environment, involuntary resettlement, and indigenous peoples.

The fund will apply ADBs prohibited investment activities list

Abide by applicable national laws and regulations and comply with ADBs Safeguard Policy Statement (2009)

Establish an appropriate Environmental Social Management System (ESMS) satisfactory to ADB

The PINAI Fund’s ESMS include arrangements to comply with national labour laws and ADBs Social Protection Strategy to ensure adherence to internationally recognized core labour standards, including provisions to prohibit any discrimination against women in hiring and to provide equal pay for men and women for equal work.

Includes appropriate provisions prohibiting corruption, money laundering, and the financing of terrorism, and remedies for ADB in the event of noncompliance.