Pension funds in a highly politicised environment: The case of the Philippines

Abstract

This article seeks to contribute to the greater understanding of the challenges faced by pension funds in developing countries. This article reviews the investment decisions and strategies of two government-owned pension funds in a highly politicised environment. The Government Service Insurance System (GSIS) and the Social Security System (SSS) are both government-owned pension funds located in the Philippines. Interviews were conducted in 2007 with representatives from both pension funds, and other public and private sector interviewees as part of a broader research into the turbulent corporate governance landscape of the country. A review of politicisation and presidential appointments provides the context in which the two pension funds operate in the country. Being government institutions, these two funds have experienced the delicate balancing act of pursuing organisational objectives concurrently with political wishes-more often than not at the expense of the former to appease the latter. One of the ongoing debates in Western corporate governance is the exercise of infl uence and activism by institutional investors. The actions of the pension funds in an episode involving former Philippine President Joseph Estrada and a bank merger provide an insight into how institutional investor activism is exercised and conducted in a non-Anglo American corporate governance environment and a developing economy with a weak bureaucratic state.

Forensic Investigation of Abandoned GSIS Building in Manila

“…The external part of the GSIS building shows damage, one of the causes is deterioration due to time, broken window glasses, collapsed small strip of concrete on the 5th floor, yet aside from the seemly deteriorated facade the structure still stands firm [7]. With the help of this study, the possible causes of its abandonment and the remedial measures may be discovered for a potential reuse of this structure.…”

“…By virtue of the Proclamation No. 835 signed last April 27, 2005 [7,8]. President Arroyo transferred the former building site of the Government Service Insurance System (GSIS) in Ermita, Manila to the Supreme Court to improve the administration of justice in the city and provides better public service to its courts.…”

“…99 issued in 1988 by then former President Corazon C. Aquino. Under the program, courthouses or Halls of Justice buildings shall be rehabilitated or constructed for the use or occupancy of the lower courts, the National Prosecution Services, the Parole and Probation Administration, the Public Attorney's Office, and the Register of Deeds [7,8]. The order directed the Secretaries of Justice, of Public Works and Highways, and Interior and Local Government, in consultation with the Supreme Court, to undertake the program to improve the infrastructure of the justice system.…”

“…For civil engineers, serviceability refers to the conditions under which a building is still considered useful [7,14,15]. Should these limit states be exceeded, a structure that may still be structurally sound would nevertheless be considered unfit.…”