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Pag-IBIG Fund plans to invest P5b in stock market

By Lailany P. Gomez | Posted on Jun. 20, 2013 at 12:01am
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State-run Home Development Mutual Fund or Pag-IBIG Fund plans to invest an initial P5 billion in the stock market, as it explores more investment opportunities amid expanding membership base, its president said Wednesday.
Pag-IBIG president and chief executive Darlene Marie Berberabe said if the plan pushed through, the fund would initially invest P5 billion in the stock market to “test the waters.”
“We have no restrictions where to put our money for investment. But right now most of our investments are in government securities. Although we also have no restriction to invest in equities or the stock market, so that is something we’re also considering,” she said.
She said at least 85 percent of the fund’s total investment was currently invested in government securities, while the remaining 15 percent was in cash or in provident funds.
Berberabe said the Finance Department encouraged the fund to put their money in government securities, since there was no risk to default in the debt instruments.
“It is encouraged in the sense than if we invest in other than government securities, we must get first the approval. The principle behind it is for us not to take so much risk or gamble on other instrument, because we have to retain the savings to our members. So, what I’m saying is that since we’re not restricted to invest in other instrument, we’re studying it right now,” Berberabe said.
She said the fund was currently in talks with different fund managers, but declined to name them.
“What we plan now is to outsource it, get a good fund manager, because I recognize it’s not our competency. We’re talking with different fund managers. We’re in that process. We will come up with accreditation parameters. But of course the standards should have to be high,” Berberabe said.
Pag-IBIG Fund’s investment income yielded 8 percent year-on-year as of end-2012.
The Pag-IBIG board approved a P9.28-billion dividend to be credited proportionately to members’ accounts.
Berberabe attributed the higher dividend to income earned from the fund’s housing loan and multi-purpose loan programs, as well as income from cash and investments and other miscellaneous income.
The amount was 9.31 percent higher than the P8.49 billion posted year ago.
It translated to 4.17 percent and 4.67 percent dividend rate for mandatory members under Pag-IBIG I and those with voluntary savings accounts under the Modified Pag-IBIG 2 program, respectively.

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