The Market Monitor Minding the Nation's Business
THE Government Service Insurance System (GSIS) is studying the Philippine Stock Exchange’s proposal for state-run pension funds to revive loan for stocks and other financial products, signaling openness to the initiative while outlining a framework centered on member protection and operational sustainability.
GSIS President and General Manager Wick Veloso said the GSIS recognizes the potential of these loan programs to expand retirement investment opportunities and strengthen the Philippine stock market.
“The PSE’s call comes at a time when our markets need institutional support and our members deserve broader investment opportunities for their retirement,” said Veloso.
“Our responsibility is to ensure that any program we implement protects retirement security while genuinely contributing to market health.”
Rather than an immediate large-scale launch, the GSIS is proposing a phased study and pilot approach.
Central to this framework is the accreditation of licensed, reputable stockbrokers to perform functions they are best equipped to handle: assessing suitability to determine whether the program is right for each member, evaluating their comfort level with risk, providing investment advice, and handling stock purchases and sales.
“Pension funds manage pooled investments and benefits administration. Brokers manage individual client accounts and capital market transactions,” Veloso explained. “Accrediting qualified market professionals to conduct these functions allows the GSIS to focus on governance, oversight, and loan structuring while members receive expert guidance.”
The proposed framework includes broker accreditation standards requiring proper licensing, proven track record, and compliance with Securities and Exchange Commission regulations. It establishes clear eligibility rules and loan limits based on salary, length of service, and existing retirement savings to prevent members from borrowing more than they can safely manage.
Mandatory disclosures will ensure members understand that financial products’ prices go up and down, the money they borrow could be affected by market losses or gains.
The framework also creates pathways to integrate with the Personal Equity and Retirement Account and other tax-advantaged retirement programs under Republic Act 9505, while pilot testing will validate systems, measure how well members understand the program, and assess whether it can work at a larger scale before broader rollout.
The GSIS emphasized that any loan program must balance market development goals with its responsibility to protect more than 2.5 million members and pensioners.
“We are not opposed to innovation. We are insisting on precision. A pilot allows us to build evidence, refine protections, and scale responsibly.”
Veloso also said that the GSIS will work collaboratively with PSE, market regulators and other stakeholders to develop all program elements and then present a comprehensive proposal to the GSIS Board of Trustees for approval.