IN ITS bid to improve efficiency and diversification in its investment opportunities, the Philippine Health Insurance Corporation (PhilHealth) is currently searching for qualified fund managers for its maiden venture into the equities market.
In a statement, PhilHealth President and CEO Alexander A. Padilla said that such is a milestone for the state-run health insurance agency where most of its investments are concentrated in government securities.
“While government securities are considered safe investment outlets with zero default risk, the fact is these are low yielding instruments” Padilla explained.
The authority to invest in equities as in Triple “A” corporate bonds of private entities have been made possible with the enactment of Republic Act 10606, otherwise known as the National Health Insurance Act of 2013, in June last year.
Under its new investment policy, a portion of its investment reserve fund may be placed in the stock market through the hiring of five (5) local equity fund managers who shall manage a total of P5 billion. Bidding for local fund managers is expected to commence in the second half of 2014 through limited source bidding based on their proven track record in fund management. Their performance shall be monitored and rated annually as to who gives the best return for the investments made.
In December last year, PhilHealth made its first foray in corporate bonds with the purchase of Meralco Fixed Rate Bonds. To further improve returns and also to diversify investments, PhilHealth said it is currently looking into other higher yielding bond issuances such as Triple “A” debts of private institutions with the strongest capacity to repay debt obligations.
“Because of the increasing level of financial protection that our members are getting from us, we have been paying more than what we are actually collecting which is indeed a good sign. Thanks to our sound investments, these have helped augment the Fund to meet the expanding entitlements of our members” Padilla said.
PhilHealth’s total assets stood at P128 billion during the first half of 2013. Over the same period, its Total Reserve Fund increased to P117 billion from P115 billion in December 2012.