The Social Security System (SSS), the Philippines' state pension fund, is seeking to grow its total loan portfolio to fill the amount allowed under its charter. The state-run social insurance institution covers private-sector workers, and the lending at issue runs through the salary, calamity, emergency, and microloan programs it offers to members.

"By the end of the year, [the fund] will be around P1.5 trillion. So, you're looking at about P300 billion in loans," SSS Senior Vice-President of Lending and Asset Management Group Pedro T. Baoy said at a press briefing on Monday.

He added that the amount can increase in line with growth in the fund's reserves. Under its charter, the SSS is allowed to maintain a loan portfolio of up to 25% of its total reserve fund — a ceiling that ties its lending capacity directly to the pace of reserve growth.

Mr. Baoy said the agency is studying whether it can raise the loan threshold, though doing so would require legislative action.

"We are reviewing it, but it takes Congressional approval to do that. So, for our charter, we are limited to about 25%," he said.

As of September, the state pension fund had disbursed P170 billion in loans, led by salary loans, calamity loans, and emergency loans.

"Since 2016, we have launched about 41 salary loans, calamity loan programs, and emergency loans," Mr. Baoy said.

This year, the SSS has released salary loans to some 150,000 borrowers per month, equivalent to around P4 billion monthly. "So, our salary loan could reach P48 billion this year," he said.

For its emergency loan program, the SSS allocated P26.68 billion, of which P20 billion has been disbursed year to date to 780,000 members. Loan releases under the program surged to P100 million a day to almost 6,000 members following the recent onslaught of typhoons.

Mr. Baoy said the SSS' total loan portfolio as of September was up by 5% from the year-ago level, in line with the growth in its membership.

"What we released, we also collect. So it's self-funding," he said.

He added that the fund has also seen an improvement in asset quality over the years, with collection efficiency for new loans now reaching 92% — repayment performance that underpins the self-funding model he described.

"I can safely say that the new loans, because the Gen Z, Millennials, are very much aware or responsible about their credit. They have been paying, and we recorded a 92% collection efficiency. In fact, we have observed through our microloans that those borrowing are mostly young adults, 18-24 [years old]. You'll be very surprised, most of them pay in advance," Mr. Baoy said.

Meanwhile, the SSS has disbursed P1.81 billion to 146,000 members under its microloan program as of September.

SSS President and Chief Executive Officer Robert Joseph M. de Claro said the fund aims to release P10 billion under the microloan program by the end of this year.

The state pension fund is also looking at earmarking another P40 billion for its energy sustainability loan, which will be launched within the first quarter of 2027, Mr. de Claro added. The program will offer loanable amounts of P200,000 to P400,000 with repayment terms of four to seven years, and will initially cover 100,000 homes.

The next markers are the fund's year-end disbursement targets, the planned first-quarter 2027 launch of the energy sustainability loan, and Congress takes up the review of the 25% charter cap.

— Aaron Michael C. Sy / BusinessWorld