QUR elders used to say, if you want to invest your money, buy a good piece of land. It’s tangible, it cannot be destroyed and it appreciates in value. It’s low maintenance, as well.
We hear many stories of how people with foresight became millionaires after they invested in huge tracts of land when they were dirt cheap and later on sold them for several times over their original cost. The buying of real estate and holding it for a period of time until the value has increased is what is called land banking. It is a wise strategy, especially for those who are looking for long-term investment instruments, such as what the Social Security System (SSS) does.
As of end of November 2015, SSS real-estate properties comprised 4 percent or P18.6 billion, of its total investment portfolio of P423.8 billion.
Some of these real properties were acquired as payment in kind by delinquent employers, while others were investments due to their good location and prospects for development.
According to the SSS Asset Management Department, for the year 2015, some P620 million have been generated from the lease and sale of SSS real-estate properties, such as residential and commercial lots, condominium units, buildings and parking lots, belying media reports that these assets have been idle. In fact, about 70 percent of its investment properties have been on lease and are bringing in regular income for the SSS, while the rest are either for sale and are retained for land banking purposes.
May Catherine Ciriaco, senior vice president and officer in charge of the Lending and Asset Management Division, said part of the pension fund’s long-term strategy is the retention of select prime properties, such as the ones in Fort Bonifacio in Taguig City and in East Triangle in Quezon City, given the expected appreciation of their real-estate value.
The SSS, however, has properties scheduled for sale through bidding in 2016, including Bayview, Urdaneta, Pryce Tower-Davao, Pryce Center-Makati E. Ganzon and acquired lots in Northfields. The bidding of real properties, conducted late last year without success, will again be pursued this year. These properties consist of condominium units and parking lots in Pioneer West Highlands, Pioneer Madison Suites and Pioneer Corporate Center. Just a few days ago, the agency announced an invitation to bid in the newspapers for the sale of these properties. Hopefully, this time it will be successful.
The point being made here is that the SSS is not remiss on its duty to manage the money of its members well. As an institution that looks at the long-term investment landscape, it sees land banking as another means to make its members’ pension fund grow. But like any prudent fund manager, it does not put all its eggs in one basket. As mentioned earlier, SSS real-estate properties consist only 4 percent of the investment portfolio. The biggest share of the SSS investment portfolio (40 percent) goes to government securities, followed by 23 percent in private equities, 19 percent in loans to members, 6 percent in bank deposits and 8 percent in corporate notes and bonds. The average return on investment as of end of November was 6 percent, outperforming benchmarks.
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For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55 which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.
Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.