Despite widespread calls to ban online gambling in the Philippines, the Government Service Insurance System has invested PHP1 billion (US$17.4 million) in iGaming company DigiPlus.
In July, the Office of the Ombudsman suspended GSIS President and General Manager Jose Arnulfo “Wick” Veloso and six others for questionable investments. According to the Commission on Audit, the agency has invested PHP2.3 billion in three companies with “no proven track record of profitability over the last three years.” In doing so, it exposed a “significant amount of members’ contributions to high risk”.
GSIS originated in the 1930s as an insurance provider for public employees, including teachers, police officers and government workers. It later added pension, disability and retirement benefits.
Senate leader: ‘Guardrails breached’
On the Senate floor Tuesday, Senate Deputy Minority Leader Risa Hontiveros sounded incredulous at the DigiPlus investment.
“You heard that right, Mr. President and dear colleagues — GSIS invested over PHP1 billion in online gambling. Those shares were bought at a peak of PHP65.30 and have since dropped to PHP13.68.”
DigiPlus, a Philippine Stock Exchange-listed company, ranked No. 233 on this year’s Fortune Southeast Asia 500 list. It calls itself a digital entertainment leader, “combining technologies and innovation to multiply the fun and happiness in people’s lives”.
Hontiveros would beg to differ. Along with Senate President Juan Miguel Zubiri and Senator Joel Villanueva, she supports a total ban on online gambling in the Philippines. In the interim, she has filed a bill to ban the use of digital wallets and super-apps for online wagers.
“Countless Filipinos have sunk into overwhelming debt because of e-gambling, which is made even easier by e-wallets,” Hontiveros said. “For some, it cost them their lives, and all it took was a single tap.”
The senator also complained about GSIS’ 0.82% stake in Del Monte Pacific. The canned-food giant is “teetering under $2.3 billion in debt. This investment has already incurred an estimated paper loss of PHP19.1 million for GSIS, representing a 32.5% decline in its stake,” Hontiveros said. “The guardrails put in place to guide and protect GSIS investments are seemingly being breached.”
GSIS to review investment policies
On Wednesday, GSIS issued a response saying it “fully supports transparency and accountability in all its investment activities”. It pledged to “cooperate with oversight institutions and regulatory bodies in connection with its investment in DigiPlus Interactive Corp”.
“Still, we recognize that public trust must be continuously earned,” the agency continued. “In light of recent developments, GSIS will continue to comprehensively review its charter, investment policies, risk exposure thresholds and sectoral guidelines, particularly those involving sensitive or high-risk industries.”
GSIS has a total of 2.74 million members and pensioners. According to the Philippine News Agency, in June it reported PHP1.88 trillion in assets and PHP76.82 billion in net income, up 31% year-on-year. It has demonstrated a five-year average return on investment of 6.75%.
GSIS says the Philippines Social Insurance Fund is “strong, secure and actuarially sound”.
Philippines Senator Risa Hontiveros, who helped bring down offshore gaming operations, was irate to learn that the government pension fund invested in online gaming firm DigiPlus.