Philippines’ SSS targets offshore allocation for reserve fund by end-2027

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SSS offshore reserve fund plans

Highlights

SSS targets raising offshore allocation of its Investment Reserve Fund to 5% by end-2027 and about 1% by end-2024, from a current $200,000 in U.S. Treasuries.
Total SSS assets stand at P1.39 trillion versus liabilities of P11.593 trillion, resulting in negative reserves of P10.203 trillion as of end-September.
SSS launched a bidding process for a two-year investment consultant to guide expansion toward its 7.5% offshore investment cap, with final decisions remaining with the board.

Offshore investment plan and portfolio strategy

As reported by BusinessWorld Online, newly appointed SSS President and Chief Executive Officer Victor Alfonso A. Limlingan said the pension fund wants to place 5% of its Investment Reserve Fund offshore by the end of 2027, while targeting about 1% by the end of this year. He said the SSS already holds a small amount of U.S. Treasuries, about $200,000, which has risen in value as the peso depreciates.

Under its charter, the SSS can invest up to 7.5% of its Investment Reserve Fund in offshore assets. Limlingan said stronger investment returns are becoming more important as the Philippines faces a falling fertility rate and inflation pressures that affect contributions and the life of the fund.

He also said he expects the U.S. dollar to outperform the yen and the euro, making dollar-denominated assets more attractive to the fund. Beyond Treasuries, the SSS is also studying high-dividend companies, especially businesses linked to mining and precious metals, as well as opportunities in real estate and long-term public infrastructure such as rail and bridge projects.

SSS Senior Vice-President and Capital Markets Group Head Reginald G. Candelaria said the fund remains cautious and is still in a testing phase for U.S. and other offshore assets. He said the SSS has published a bidding process for an investment consultant for the next two years to help guide its planned expansion toward the 7.5% ceiling, while final investment decisions will remain with the board.

Fund position and broader pension pressures

As of end-September, the SSS has total investments of P1.304 trillion and an annualized return on investment of 4.10%. Its portfolio is concentrated in government securities at 49%, followed by equities at 14%, loans at 13%, real estate at 12%, corporate notes and bonds at 7%, bank deposits at 3%, and 1% each in an externally managed fund and a mutual fund.

In the first nine months, the fund books net revenue of P62.741 billion, with total revenues of P338.01 billion and expenditures of P275.268 billion. Contributions reach P300.151 billion, while benefit payments stand at P266.308 billion.

The SSS says total assets stand at P1.39 trillion, while liabilities are at P11.593 trillion, resulting in total reserves of negative P10.203 trillion. Limlingan also said the agency is working with financial technology firms to set up a credit-scoring system for the pension fund.

He added that the Philippines posts a slight improvement in the 2026 Marsh CFA Institute Global Pension Index, with its score rising to 49.2 from 47.1 in 2025. Still, the country has the fourth-lowest score among 55 retirement income systems, which Limlingan said reflects broader structural gaps in the pension system, including the lack of a mandatory provident fund and limited voluntary retirement savings coverage.

Our earlier article on the SSS equity portfolio explained the fund’s defense of its investment approach after attention on paper losses, stressing that unrealized declines are not cash losses unless positions are sold below cost. It highlighted how long-term realized gains and recurring dividend income—alongside a focus on fundamentally strong, high-yield holdings—have supported overall investment income despite market volatility.

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