The Social Security System (SSS) posted P27.16 billion in investment income in the first half of the year, as the state pension fund continued to channel funds into the Philippine capital market.

The figure represents an annualized return on investment of 4.53%, excluding realized gains from the sale of equity securities classified as fair value through other comprehensive income, the pension fund said in a statement issued late on Wednesday.

As of the first half of the year, the SSS held P1.27 trillion in consolidated investments.

By asset class, the portfolio consisted of P629.05 billion in government securities, P179.44 billion in equities, P154.56 billion in property, P151.9 billion in member loans, and P96.34 billion in corporate notes and bonds, among other holdings. Government securities alone accounted for nearly half of the total portfolio.

"SSS remains an active institutional investor in the Philippine capital market through investments in equities, government securities, and other financial instruments allowed under its investment policies. Its exploration of international investments is intended to complement, not replace, its existing domestic investments, providing greater diversification across markets and asset classes," the SSS said.

SSS President and Chief Executive Officer Robert Joseph M. de Claro said the fund's improved financial position gives it greater capacity to pursue investment opportunities.

He added that the state pension fund will continue to contribute to nation-building through its participation in the local capital market, even as it plans to invest overseas to complement its domestic placements and provide greater diversification across markets and asset classes. Any move into foreign assets would still be governed by the investment policy set by the Social Security Commission, the SSS policy-making body that determines the instruments and markets where the fund may place members' contributions.

Separately, the SSS reported a 28% decline in net income to P48 billion in the first half, down from P66.5 billion a year earlier. The fund aims to keep its net income above P100 billion moving forward as it seeks to boost benefit payouts for members.

The SSS is the Philippine government's social insurance program covering private-sector employees as well as self-employed and voluntary members; government personnel are covered by a separate fund, the Government Service Insurance System. It collects contributions from members and employers and invests these funds under its investment policies in order to pay benefits such as retirement, sickness, maternity, disability, unemployment, death and funeral benefits, making it one of the country's largest institutional investors and a major source of demand for Philippine government debt.

Reported by Aaron Michael C. Sy.