Philippine GSIS mulls new $400-M fund for infrastructure

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Philippine GSIS mulls new $400-M fund for infrastructure

Government Service Insurance System (GSIS), a social insurance institution created under Commonwealth Act Number 186 tasked to secure the future of all employees of the Philippine government, has recently announced that it is planning to set up a US$400 million fund for major infrastructure projects. The fund will be the second stage of the Philippine Investment Alliance for Infrastructure (PINAI) fund.

For the US$625 million PINAI fund, GSIS partnered with Asian Development Bank, who committed US$25 million, the Dutch pension fund manager Algemene Pensioen Groep and Australia’sMacquarie Group which together allocated US$200 million. GSIS provided the remaining US$400 million.

GSIS president and general manager Robert Vergara has announced the creation of the second fund for infrastructure projects after disbursing the entire US$400 million commitment to the Philippine Investment Alliance for Infrastructure (PINAI), which was entered into the market four years ago.

The PINAI II fund, as its predecessor, will be be targeted in core infrastructure projects such as energy, power, mass transit through light rail transit (LRT), and water projects. Additionally, it will be focused on the development of PPP projects under a national program.

According to local sources, Robert Vergara GSIS, president and general manager, commented:

“We will probably create another fund. Maybe it will be called PINAI 2. We are looking at least the same amount. Maybe we will start with another US$400 million and see whether there is reason to ramp the figure a little higher. There is no point in going up to gigantic number. There is a lot of very good projects and so If we were to earmark another US$400 million or US$500 million it would not be that difficult to deploy given  the needs of the country for theses types of infrastructure. In 2011, when we were putting this together, we thought of a 12 percent target will be a good starting point. Some of the investments are generating returns, some are in the investment phase.” 

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