Following a surge in its investment revenues in the last five years, the Employees’ Compensation Commission (ECC) said it will now be able to accommodate more clients without compromising the sustainability of its state insurance funds (SIF).
ECC said in a statement that it was able to secure an average of P1.67 billion worth of return on its investments (ROI) from 2014 to 2019.
Of the amount, the P433-million ROI income came from the Government Service Insurance System (GSIS), while the remaining P1.24 billion ROI came from the Social Security System (SSS).
Silvestre H. Bello III, Labor Secretary and ECC chairman, said the additional ROIs contributed to the growth of ECC’s available funds for employees’ compensation (EC) claims.
“The income from the investments the ECC placed has been a great help in improving the benefits and services that the EC Program provides to persons with work-related disabilities (PWRDs),” Bello said.
As of September 2018, ECC’s total reserves for EC payment claims reached P61.55 billion, 30.7 percent higher compared to P47.1 billion in 2014.
Ciriaco A. Lagunzad III, Labor Undersecretary and ECC Alternate Chairman, attributed the surge in ECC’s ROIs to initiatives of GSIS and SSS to expand their investment portfolios.
In the case of SSS, this was achieved through a ECC board issuance released in 2014, which allowed SSS to expand its investment portfolio to include domestic equities and fixed income securities
“The Commission considered the possibility of an increase in the return on investment of its investible SIF through an expanded investment portfolio given the healthy financial market indicators and GNP (Gross National Product) growth of our country,” Lagunzad said.
Another contributor to the ROI growth, ECC said was the “apt collection of members’ contributions and investments by both systems.”
ECC Executive Director Stella Zipagan-Banawis said both reforms were part of the commision’s initiative to ensure the long-term sustainability of the EC-SIF.
“The careful management of the EC-SIF has been one of our priorities ever since and the investments made by SSS and GSIS for the SIF were thoroughly reviewed and approved by the ECC board,” Banawis said.
With the significant growth in their ROIs, ECC could now afford to increase the benefits of its beneficiaries without increasing employers’ contributions.