A presentation by: RIZALDY T. CAPULONGDeputy Chief Actuary and VP for Capital Market Division

An Overview of Investments & Finance of the SOCIAL SECURITY SYSTEM

2

Presentation Overview

• Financial and Operation Highlights• Investment Highlights• SSS Investment Historical

Performance• 2012 Investment Performance• Provident Fund

Service Network

Luzon North [17]

NCR [36]

Mindanao South [14]

Mindanao West [7]

Mindanao North [11]

Visayas Central [16]

Visayas West [14]

Luzon Central [20]

Luzon South [24]

Bicol Region [10]

25 Processing Centers121 Receiving Centers 37 Rep. Offices183-TOTAL

BRANCH OFFICES

Abu DhabiAl-Khobar BruneiDoha Hong Kong JeddahKuwait

LondonMilan RiyadhRomeSingapore Taipei

PLUS

13 Foreign Offices

Foreign Offices and International Agreements

San Francisco, California

London, UK

Italy (Rome & Milan)

Kingdom of Saudi Arabia (Riyadh, Jeddah, Alkhobar),Kuwait, UAE (Abu Dhabi),Qatar (Doha)

Hong Kong

Taiwan

Philippines

BruneiSingapor

e

Sydney, Australia

International Agreements Countries that signed with the Philippines for mutual cooperation in the field of social security (15 countries)

Austria – since 1982United Kingdom - 1989 Northern Ireland - 1989Spain - 1989France - 1989Canada -1997Quebec - 1998Netherlands - 2001Switzerland - 2004Belgium - 2005Greece – (for signing)Portugal – (for signing)Japan – (under negotiation)Korea – (under negotiation)Israel – (for ratification)

Compulsory Coverage

a. Employeesb. Self-Employedc. Others: seafarers, workers in the informal sector,

owner of a single proprietorship business, actors, directors, professional athletes, coaches, individual farmers

and fishermen d. Employers with at least 1 employee

6

Coverage

Farm

ers and

fisherm

en

Hou

seh

old

Hel

per

s

Overseas Workers

Regular employees

Self-

employed

workers

Owner of

single

proprietorshi

p business

Seafarers

Info

rmal

sect

or

Voluntary Coverage

a. OFW: Filipinos recruited for employment abroad

b. Spouses devoted to household and family affairs

c. Employee of a foreign government,

international organization of their wholly-

owned instrumentality based in the Philippines

20011997 1998

1988

1975

196019581957

1973

1980

1978

1954

1972

Historical Highlights

1992/1993 1995

8

As of May 2012

SSS MEMBERS

Employees 20,080,580

Employers 900,846

Self-Employed 6,009,806Voluntary 2,688,344

TOTAL 29,522,870TOTAL 29,522,870

SS & EC PENSIONERS

Retirement 851,352

Death 778,392

Disability 63,684

TOTAL 1,693,428TOTAL 1,693,428

Luzon North[1,504,508]

NCR[14,168,573]

Mindanao South

[2,123,747]

Mindanao West

[691,692]

Mindanao North

[1,665,501]

Visayas Central

[2,040,049]

Visayas West[2,237,558]

Luzon South

[2,009,157]

Luzon Central[2,377,621]

Bicol[704,464

]

Membership

As of May 31 2012

OFW 744,140

9

Actuarial Fund Balance

Cont + Inv Income = Ben + Oper Exp Contributio

nsBenefitsInvestment

IncomeOperating Expenses

10

Covered Wages•Based on 29 salary brackets

Salary Bracket

Compensation Range Monthly Salary Credit

I P1,000 – P1,249.99 P1,000

II P1,250 – P1,749.99 P1,500

III P1,750 – P2,249.99 P2,000

IV P2,250 – P2,749.99 P2,500

: : :

: : :

XXVII P14,250 – P14,279.99 P14,500

XXIX P14,750 and up P15,000

Sources of FundEmployer Employee

× Government

Distribution of Members’ ContributionsJanuary-May 2012

P38.95-BJan-May 2012

Total Contributions

ContributionsContribution RateEmployer - 7.07% Employee - 3.33%TOTAL - 10.4%

Contribution CollectionSS & EC FundsYears 2000 – 2012Amount in Billion Pesos

0

20

40

60

80

100

Contri 30 31 34 39 44 47 53 62 69 72 79 86 95

2000

20012002

2003

2004

2005

2006

2007

2008

2009

2010 2011 2012

SS,98.47%

EC1.53%

11

EMPLOYEE3.33% EMPLOYER

7.07%

SS CONTRIBUTION RATE:P104-P1,560 (10.4% of the employee’s

MONTHLY SALARY CREDITP1,000 to P15,000)

EC CONTRIBUTION RATE:P10, MSC<P15,000P30, MSC=P15,000

ONLY EMPLOYER CONTRIBUTES

Self-employed pays all of 10.4% , P104-P1,560 - MSC P1,000 to P15,000

EMPLOYER1.0%

* as of January 1, 2007

CONTRIBUTION RATE

CONTRIBUTIONS2011 Distribution of Paying Members -SS

6.02%

19.35%

15.93%

13.23%12.37%

7.09%

4.39%

21.61%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

1,000-2,500

3,000-4,500

5,000-6,500

7,000-8,500

9,000-10,500

11,000-12,500

13,000-14,500

15,000

Total No. of Paying Members - 9,599,306

MSC

25.89%74.11%

2011 Distribution of Paying Members -EC

CONTRIBUTIONS

1,878,056

7,253,742

P30

Total

Contribution Amount

No. of Paying Members

5,375,686P10

P30 Monthly Contributions

P10 Monthly Contributions

AMSC OF CONTRIBUTING MEMBERS BY AGE AND SEX

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

15 20 25 30 35 40 45 50 55 60

2007

2009

2011

2013

2015

Male Female

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

15 20 25 30 35 40 45 50 55 60

2007

2009

2011

2013

2015

Social Security Employee’s Compensation

Govt Securities 123.56-B

40%Bank Deposits 3.10-B

1%

Equities 97.66-B

32%

Corp Bonds12.70-B

4%

Development Loans0.36-B

0%

Housing Loans13.70-B

5%

Salary Loans42.76-B

14%

Properties 13.06-B

4%

Total Investmentsas of May 31, 2012

P306.90-B

Govt Securities 4.02-B 14%

Bank Deposits 16.03-B

57%

Development Loans

0.001-B0%

Housing Loans2.25-B

8%

Salary Loans5.44-B19%

Total Investmentsas of May 31, 2012

P27.95-B

INVESTMENTSInvestment PortfolioAs of May 31, 2012

Distribution of Investment IncomeJanuary-May 2012

INVESTMENTS

Investment IncomeSS & EC FundsYears 2000 - 2012Amount in Billion Pesos

0

5

10

15

20

25

30

Income 12 14 12 9 9 12 12 17 29 22 28 30 30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Social Security

Employee’s Compensation

Govt Bonds & Notes

P3.88-B, 25%

Bank DepositsP0.03-B, 0%

EquitiesP9.26-B, 59%

Corp Notes & Bonds

P0.36-B, 2%

Development Loans

P0.02-B, 0%

Housing LoansP-0.15-B, 1%

Salary LoansP1.69-B, 11%

PropertiesP0.19-B, 1%

Total Investment IncomeJanuary –May 31, 2012

P15.59-B

Govt Bonds & Notes

P0.10-B, 17%

Bank DepositsP0.26-B, 45%

EquitiesP0.04-B, 7%

Development Loans

P0.00-B, 0.01%

Housing LoansP0.02-B, 3%

Salary LoansP0.16-B, 29%

Othe IncomeP0.00-B, 0.01%

Total Investment IncomeJanuary - May 31, 2012

P0.57-B

INVESTMENTS

Return On InvestmentsAs of May 31, 2012

ASSET TYPE Consolidated

Government Securities 8.15

Bank Deposits 3.69

Equities 25.96

Corporate Notes & Bonds 7.32

Salary Loans 10.11

Housing Loans 2.29

Development Loans 9.67

Real Estate 3.57

Overall 12.61

Death76% Disability

11%Sickness10%

Med Serv3%

Funeral0%

Benefits

Distribution of Benefit ReleasesJanuary-May 2012

Social Security Employees’ CompensationP35.31-BTotal Benefits

P0.43-BTotal Benefits

Benefits

Social Security (SS)

Death and FuneralDisabilityRetirementSicknessMaternity

Employees Compensation (EC)

Death and FuneralDisabilitySicknessRehabilitation Services

Amount of Benefits PaidSS & EC FundsYears 2000 – 2012Amount in Billion Pesos

0

20

40

60

80

100

Benefits 34 39 41 43 45 46 52 61 68 72 77 83 87

2000

20012002

2003

2004

2005

2006

2007

2008

2009

2010 2011 2012

Death35%

Disability4%

Retirement51%

Sickness2%

Maternity5%Funeral Grant

3%

BENEFITSNumber of BeneficiariesAs of May 31, 2012

Source: MIS Report as of May 2012*Includes beginning pensioners

55,78494,686 81,816

159,562

786,478

877,169

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Funeral Maternity *Disability Sickness *Death *Retirement

Social Security

TOTAL SS BENEFICIARIES:

2,055,495

TOTAL EC BENEFICIARIES:

33,877

Employees’ Compensation

1723159

2,166

11,685

18,144

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Medical Services/Rehab Funeral *Disability Sickness *Death

Monthly Pension Average : P 3,049 Minimum: P 1,000 Highest : P 23,588

Ave. PensionSocial 1,673,790Security

Retirement 851,352 P 3,348Death 760,426 2,699 Disability 62,012 3,149

Employees' 19,638Compensation

Death 17,966 P 3,325Disability 1,672 3,777

Total Pensioners 1,693,428

Benefit Number

By Benefit TypeAs of May 2012

PENSIONERS

DISTRIBUTION OF PENSIONERS BY PENSION AMOUNT2011 New SS Pensioners by Total Monthly Pension

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%50.67%

12.41%

5.70%15.03%

3.02%2.45% 1.92% 1.66% 1.26%

1.14%0.92% 0.72%0.61% 0.51% 0.45% 0.33% 1.20%

Total Pensioners – 42,258

Monthly Pension

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%36.17%

10.21%

5.96%8.51% 8.51%

7.23% 6.38%

1.70%4.26%

4.26%

0.43% 1.28%2.13%

0.85% 0.43% 0.85% 0.85%

DISTRIBUTION OF PENSIONERS BY PENSION AMOUNT

Total Pensioners - 235

Monthly Pension

2011 New EC Pensioners by Total Monthly Pension

0.59%

RATIO OF PENSIONERS TO PAYING MEMBERS

1:8.74 1:7.75 1:6.43 1:7.05 1:6.55 1:5.83 1:5.85 1:5.67Rati

o

Pensioners

Paying Members

In Thousands

795

6,951

930

7,215

1,166

7,497

1,135

8,001

1,308

8,573

1,565

9,122

1,717

10,042

1,893

10,732

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2000 2002 2004 2006 2008 2010 2012 2014

Paying Members

Pensioners

PROPORTION OF CLAIMANTS vs. PAYING MEMBERS

2007 2008 2009 2010 2011EC Claims 38,991 41,162 36,041 36,212 35,847

Paying Members 8,322,709 8,573,393 8,880,239 9,121,699 9,599,306

Ratio 0.00468 0.00480 0.00406 0.00397 0.00373

0.00%

100.00%

2007 2008 2009 2010 2011

0.47% 0.48% 0.40% 0.40% 0.37%

Paying Members EC Claims

Distribution of Countries With Social Security Programs Around the World

BASED ON CONTRIBUTION RATES

0

2

4

6

8

10

12

0-4.99 5-9.99 10-14.99

15-19.99

20-24.99

25-29.99

30-34.99

35-39.99

40-44.99

45-49.99

50 andup

Africa

America

Asia

Europe

Contribution Rates (in %)

Total 019141219322437159

Distribution of Countries With Social Security Programs Around the World

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0-4.99 5-9.99 10-14.99 15-19.99 20-24.99 25-29.99 30-34.99 35-39.99 40-44.99 45-49.99 50 andup

Africa

America

Asia

Europe

PER REGION AND CONTRIBUTION RATES

% Distribution

Number of Countries Based on the Types of Mandatory Systems For Retirement Income Per Region Around the

World

0

5

10

15

20

25

30

35

40

FR ER ERFR MT FRU PF ORS IRS

Africa

America

Asia

Europe

FR - Flat-Rate

ER - Earnings-Related

ERFR - Earnings-Related with a Flat-Rate Component

MT - Means-Tested

FRU - Flat-Rate Universal

PF - Provident Funds

ORS - Occupational Retirement Schemes

IRS - Individual Retirement Schemes

2381610592612513Total

Distribution of Countries Based on the Types of Mandatory Systems For Retirement Income Per Region Around the World

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

FR ER ERFR MT FRU PF ORS IRS

Africa

America

Asia

Europe

FR - Flat-Rate ER - Earnings-Related

ERFR - Earnings-Related with a Flat-Rate Component MT - Means-Tested

FRU - Flat-Rate Universal PF - Provident Funds

ORS - Occupational Retirement Schemes IRS - Individual Retirement Schemes

% Distribution

02468

101214

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Personal Services MOOENon- Cash Expense Charter Limit

1835,0771,693,4289,599,30629,430,59

7900,846

Branches/Offices:Employees: Pensioners:

Paying Members¹:Registered Members:

Employers:

2012

Amou

nt (I

n Bi

llion

Peso

s)

Actual operating expense for five (5) years very close

to the limit

Operating Expenses have grown through the years

following the steady increases in number of branches and

employees to serve the growing number of members and

pensioners

Year 2002-2012Amount in Billion Pesos

Operating Expenses

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Actual Expense 4.59 4.78 5.33 5.64 6.38 6.82 6.75 7.07 7.11 7.52 7.73

Charter Limit 4.63 5.11 5.54 6.07 6.67 7.96 9.14 9.37 10.35 11.21 12.32

% of Charter Limit 99% 94% 96% 93% 96% 86% 74% 75% 69% 67% 63%

¹As of Dec 31,2011

Operating Expenses

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of

Personnel

3,996 3,942 3,896 4,058 4,043 4,169 4,135 4,145 4,182 4,980 5,190 5,114 5,077

Number of

Covered Members

22,630,832 23,532,666 24,308,033 25,051,234 25,666,386 26,227,636 26,739,282 27,241,220 27,759,568 28,217,932 28,766,123 29,269,090 29,430,597

Number of Personnel vs. Covered MembersYears 2000-2012

66% 64% 64%70% 65%

73% 68% 67%74% 72% 77%

27% 26% 24%25%

26%23%

27% 27%22% 24% 19%

13% 9% 4% 4%10%7% 4%6%5%4%5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Non- Cash ExpenseMOOEPersonal Services

Distribution of Operating Expenses2002-2012

Operating ExpensesJanuary to May 2012Amount in Millions

OPERATING EXPENSES 3,023.84Php As % of Revenues 5.5%

SSS

GSIS

EC

PHIC

12%

12%

12%

12%

3%

12%

12%

3%

Art. 178 of PD 626, As Amended

Section 25 of RA8282

Section 15.2 of RA 8291

CONTRIBUTIONS EARNINGS

BUDGET LIMIT (as a % of contributions and earnings)

Sec.26 of RA 7875

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

% of OPEX to Revenues

% of OPEX to Assets

(as % of Revenues and Assets)*1958-2012

Operating Expenses

0

50

100

150

200

250

300

350

400

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

SSECSS & EC

AssetsAmounts in Billion Pesos

Financial Summary

SS & ECP350.62B

(As of 2012 )

SSP322.64-B

(As of 2012 )

ECP27.99B

(As of 2012 )

1957- 2012

0

10

20

30

40

50

60

70

80

90

100

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

Contributions

Investment Income

Benefits

Operating Expenses

TOTALS, 1957-2009Cont

P913.78-B

Inv IncP380.58-B

BenP901.63-B

OpExP94.86-B

TOTALS, 1957- 2012

Social SecurityAmounts in Billion Pesos

Financial Summary1957- 2012

0.00

0.50

1.00

1.50

2.00

2.50

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Contributions

Investment Income

Benefits

Operating Expenses

TOTALS, 1975- 2012

Employees’ CompensationAmounts in Billion Pesos

Financial Summary

ContP19.19-B

Inv IncP36.70-B

BenP21.37-B

OpExP2.93-B

1975- 2012

36

FINANCIAL PERFORMANCE

38.35

15.32

35.31

2.99

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Social SecurityJanuary – May 2012Amounts in Billion Pesos

Contributions Inv Income Benefits Oper Expenses

FINANCIAL PERFORMANCEEmployee’s CompensationJanuary – May 2012Amounts in Billion Pesos

Contributions Inv Income Benefits Oper Expenses

0.60 0.57

0.43

0.04

0

0.1

0.2

0.3

0.4

0.5

0.6

FINANCIAL PERFORMANCE

SS EC TotalInvestments 306.90 27.95 334.85Reserves 309.16 28.10 337.26Assets 322.64 27.99 350.62

January to May 2012

0

50

100

150

200

250

300

350

400

Investments Reserves Assets

EC

SS

In Billion Pesos

39

Highlights of SSS Investments

Investment Income Helps Finance Social Security Benefits

Without Investment Income, Government Subsidy Is Needed To Finance Social Security Benefits

40

Role of SSS Investments

Filling the funding gap-Individual view Contributions, investments, subsidies, benefits and

operating expenses per member

-Aggregate view Yearly total contributions, yearly total benefits, yearly

total investments for SS, EC and Consolidated

-SSS EC investment success story

Extending the actuarial fund life-Sensitivity analysis on fund life by varying

investment income, ROI and strategy

Role of SSS Investments

Option Criteria / Condition Fund Life

Baseline ROI ranging from 6% to 13%No Additional Yearly Income 2039

Projected investment income is increased yearly by:A P500 M 2039B P1 B 2039C P5 B 2040D P10 B 2042E P20 B 2046F P30 B 2051G P40 B 2058H P50 B 2072I P51 B BEYOND 2070

VARYING THE INVESTMENT INCOME

• Options A to H aims to determine how far the fund life can extend if ever the projected yearly investment income is higher by a certain amount

• Option I aims to determine the yearly investment income needed for the SSF to achieve perpetuity

Investment Sector Option Criteria / Condition

Fund

Life

Government

Baseline Uses Different Interest Rates for Short-Medium-Long Term Investments

2039

A Uses Projected Long Term Interest Rates Only 2040

Member Loans

Baseline Repayment of Delinquent Accounts: 2%Repayment Rate for Current Accounts: 80%

2039

B

Repayment Rate for Delinquent Accounts: from 2% in 2010 increasing up to 15% in 2020; fixed 10% thereafterRepayment Rate for Current Accounts: from 80% in 2010 to 95% in 2020; fixed 95% thereafter

2039

Housing Loans

BaselineEmployee Housing Loans Program (EHLP) loan releases at P50 M, made annually; Repayment Rate=100%

2039

CEmployee Housing Loans Program (EHLP) loan releases at P25 M, made annually; Repayment Rate=100%

2039

VARYING THE INVESTMENT ASSUMPTIONS

• Options A to F aims to determine the effect on the SSF given varying conditions on the investment levels of the SSS

Investment Sector

Option Criteria / ConditionFund Life

Real Estate

BaselineRental rates increase by 5% annuallySale of property equivalent to 1% of Total Real Estate Property Investments every year

2039

DRental rates increase by 10% annuallySales of property: Increasing rate at 1% in 2010 to 10% in 2020

2039

EquitiesBaseline

First 5-yrs average ROI at 12%;And Fixed ROI at 10% thereafter

2039

EFirst year ROI at 12% gradually going-up to 15% at 5th year; Fixed ROI at 15% thereafter

2041

Business Loans

BaselineNew investments (Corporate Bonds) increase by P1-B annually; interest rate = 8%

2039

FNew investments (Corporate Bonds) increase by P2-B annually; interest rate = 8%

2039

OVERALLBaseline

Overall Results using baseline assumptions for investments

2039

SummaryOverall Results using all alternate assumptions for investments that are in this table.

2043

VARYING THE INVESTMENT ASSUMPTIONS

• Proposals to improve the investment assumptions practically has no effect on the fund life, except when only the projected long-term interest rates are used for government investments and also when there is a gradual increase in the ROI of equities

Option Criteria / Condition Fund Life

BaselineROI based on Investment Income and Investment Levels in any given yearAverage Annual ROI: 10%

2039

Fixed Return on Investments (ROI) at:A 7% 2035B 8% 2036C 9% 2038

D 10% 2040

E 11% 2043

F 12% 2047G 14% BEYOND 2070

VARYING THE RETURN ON INVESTMENT

• The fund life will decrease if the Rate of Return on Investments is only at 7%, 8% or 9%. However, the fund life will be extended once the ROI level is increased to 10%, 11%, 12% or 13%.

• SSS will need to maintain an ROI of 14% for the fund life to reach perpetuity

Option Criteria / Condition Fund Life

Baseline First 5-yrs average ROI at 12%;And Fixed ROI at 10% thereafter 2039

A Fixed ROI at 5% 2036B Fixed ROI at 8% 2037

C Fixed ROI at 10% 2038

D Fixed ROI at 12% 2039

E Fixed ROI at 15% 2041

F Fixed ROI at 18% 2043

G Fixed ROI at 20% 2044

H Fixed ROI at 31% BEYOND 2070

VARYING THE EQUITIES: RETURN ON INVESTMENTS

• Given the changes in the ROI of equities, the fund life will shorten by one to three years if the ROI is lowered to 5% - 10%.

• Fixing the ROI at 12% does not have an effect on the length of the fund life.

• Increasing the ROI to 15% - 20% will extend the fund life from two to five years.

• In order to reach perpetuity, the ROI should be pegged at 31%.

Fixed income investments• Interest income on GS, salary, housing and

business loans• Penalties on delinquent member loan borrowers• Special savings deposits

Variable income investments• Equities

• Value appreciation: Buy Low-Sell High• Cash dividends: Share in company’s profits

• Properties• Sale, lease, rental

47

How SSS Makes Members’ Money Earn

48

Salary Calamity EC Emergency Housing Financing for Hospitals Financing for Educational Institutions/ Vocational & Technical Schools Financing for Tourism Projects & Power Generation Financing for SMEs Financing for Farmers & Fishermen Cooperatives

Loan Programs

How SSS Makes Members’ Money Earn

Funding Cycle & Financing Schemes

RESERVE FUNDSFixed Income

Investments

Variable Income

CONTRIBUTIONS

EMPLOYERSWORKERS

& DEPENDENTS

LOANS

BENEFITS

LOAN

REPAYMENTS

INCOME

INVESTMENT INCOME

CONTRIBUTIIONS

Investment Provisions of SSS Law

Section 26, Republic Act 8282

Sec. 26 of RA 8282 (SSS Act of 1997)“…the commission shall manage & invest with the

skill, care, prudence and diligence necessary under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would exercise in the conduct of an enterprise of a like character and with similar aims…”

“…in line with the principles of safety, good yield and liquidity, the Commission shall invest the funds to earn and annual income not less than average rate of t-bills or an acceptable market indicator…”

How SSS Makes Members’ Money Earn

52

• Qualified investment alternatives subject to defined cumulative ceilings:– 40% in private securities– 35% in housing– 30% in listed stocks– 30% in GFIs and GOCCs– 30% in infrastructure projects– 20% in local, foreign mutual funds (foreign < 10%)– 15% in any particular industry– 10% in member loans– 10% in schools and hospitals– 7.5% in foreign-currency denominated investments– 5% in real estate property

Investment Limits

53

Investment

a Minimum ROI = average of T-Bill rates or any acceptable market indicator (Section 26 of RA 8282)

LIQUIDITY

SOCIAL

IMPACT

But also, SOCIAL UTILITY,

SUPPORT TO GOV’T PROGRAMS

& USE OF FINANCIAL

INTER-MEDIARIES

Balancing not just SAFETY, YIELD, LIQUIDITY

YIELDa

SAFETY

Guiding Principles

� Government Securities-guaranteed by the Government of the PhilippinesLimit: NONE

� Equities-With proven track record of profitability over the last 3

years-Payment of dividends at least once over same period-Limit: 30% of IRF

Criteria on Investment Instruments

� Real Estate-redound to the benefit of the SSS, its members as

well as the general publicLimit: 5% of IRF

� Loans secured by collaterals like: cash government securities or guarantees of multilateral institutions

Limit: 30% of IRF

Criteria on Investment Instruments

�Bonds,securities,deposits, promissory notes or other evidence of indebtedness-of the Government of the Phils. or any of its agencies

or instrumentalities guaranteed by the Philippine Government or any

government financial institution or acceptable multilateral agency

SSS to have priority over revenues of the projects to which funds will be used

Limit: 30% of IRF

Criteria on Investment Instruments

�Bonds, securities, deposits, promissory notes or other evidence of indebtedness-of shelter agencies of the National Government or

financial intermediaries maximum of 90% of the appraised value not more than 35% of IRF for housing loans not more than 10% of IRF for short and medium term

loans

Criteria on Investment Instruments

�Bonds, securities, deposits, promissory notes or other evidence of indebtedness-of banks doing business in the Phils. In good standing with the BSP Collaterals and securities to be assigned to the SSS Limit: 40% of IRF

-of educational or medical institutions Limit: 10% of IRF

Criteria on Investment Instruments

�Domestic or foreign mutual funds-In existence for at least 3 years-Limit: 20% of IRF-For foreign mutual funds investment during the first year not to exceed 1% of

IRF to be increased by 1% for each succeeding year Limit: 7.5% of IRF

Criteria on Investment Instruments

�Foreign currency deposits or triple “A” foreign currency denominated debts, prime and non-speculative equities and other BSP approved financial instruments-Listed in the bourses of respective countries where issued-Issuing company with proven track record of profitability

over the last 3 years and regular dividend pay-out over same period

-Not to exceed 1% of IRF in the first year which shall be increased by 1% for each succeeding year but shall in no case exceed 7.5% of IRF

Criteria on Investment Instruments

�Bonds, debentures, securities, promissory notes or other evidence of indebtedness of any prime and multilateral institution-Issuing entity not to have defaulted in the payment of

interest on any of its securities-Net earnings available for fixed charges should not

have been 1.25 times the total of fixed charges for such year during each of any 3 including the last 2 of the last 5 years immediately preceding date of acquisition by the SSS

-Limit: 30% of IRF

Criteria on Investment Instruments

Investment Process

Objectives:-Ensure at all times the viability of SSS and

meet actuarial requirements.-Obtain investment incomes consistent with

safety and liquidity requirements of SSS and earn returns not less than the average T-bill or any acceptable market indicator.

-Achieve investment mix that will ensure continued growth, in order to pay benefits and support economic development.

Guidelines for Treatment

64

TECHNICAL LEVELEvaluation of proposal and

recommendation to Investment Planning and Strategy Committee (IPSCOM)

MANAGEMENT LEVELApproval of the proposal by the

(IPSCOM)

COMMITTEE LEVELApproval of the proposal by the

Executive Management Committee and Investment

Oversight Committee

BOARD LEVELApproval of the SSC

Bottom to Top Approach Top to Bottom Approach

TECHNICAL LEVELEvaluates order and acts upon

it

MANAGEMENT LEVELAssigns to responsible or

concerned department

COMMITTEE LEVELPasses order to Management

BOARD LEVEL /EXECUTIVE ORDER

Investment Process

SSS INVESTMENT DEPARTMENT HEAD

IF investment initiative

Govt Sec - Loans - Equities - Properties

of EMC or IF URGENT otherwise

Investment Oversight Committee

Social Security Commission

Investment Planning &

Strategy Committee

Executive Management Committee

Approval Process

66

Investments Organizational Structure

Investments Sector

Investments Research & Support Dept.

Treasury Division Capital Market Div.

67

SSS Investment Historical Performance

ASSETS AND INVESTMENTS

TOTAL ASSETS:

P350.62-B

TOTAL INVESTMENTS:

P334.85-B

Corporate Notes & Bonds,

12.7-B, 4%

Real Estate

Properties,

13.1-B, 4%

Housing Loans,

16.0-B, 5%

Dev’t. Loans,

0.4-B, 0%

Gov’t. Securities,127.6-B,

38%

Equities,97.9-B,

29%

Member Loans,48.2-B,

14%

Bank Deposits,19.14-B,

6%

AS OF MAY 31, 2012

69

Waves of Diversification • Government Securities----- 65-81% of portfolio in mid 70s to 80’s

• Bank Deposits---------------- from 0.1% in mid 70s to 80s

to 14% in mid 90s

• Development Loans--------- from 0.1% in mid 80’s

to 8% in early 90’s • Corporate Notes & Bonds-- from 7-11% in 80s to early 90s

to 20% in early 2000s

• Housing Loans--------------- from 15-20% in early 80’s to 30% in mid 90’s

• Equities------------------------ from 5%-10% in the early 90’s to 30% in 2000 to present

• Salary Loans------------------ from 10% in the 90’s to 15-20% in 2000’s

Investment Allocation Per Asset Class

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%195

7195

9196

1196

3196

5196

7196

9197

1197

3197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

Gov't Securities

Bank Deposits

Dev't Loans

Corp Notes & Bonds

Member Loans

Housing Loans

Equities

Real Estate Properties

DISTRIBUTION OF INVESTMENTS 1957 - 2012

Investment Allocation Per Asset Class

Consolidated

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%195

7195

9196

1196

3196

5196

7196

9197

1197

3197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

Gov't Securities

Bank Deposits

Dev't Loans

Corp Notes & Bonds

Member Loans

Housing Loans

Equities

Real Estate Properties

DISTRIBUTION OF INVESTMENTS 1957 - 2012

Investment Allocation Per Asset Class

SS Fund

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%197

5

197

7

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

201

1

Gov't Securities

Bank Deposits

Dev't Loans

Corp Notes & Bonds

Member Loans

Housing Loans

Equities

Real Estate Properties

DISTRIBUTION OF INVESTMENTS 1975 - 2012

Investment Allocation Per Asset Class

EC Fund

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%195

7195

9196

1196

3196

5196

7196

9197

1197

3197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

Real Estate Properties Equities Housing Loans Member Loans

Corp Notes & Bonds Dev't Loans Bank Deposits Gov't Securities

DISTRIBUTION OF INVESTMENTS 1957 - 2012

Investment Allocation Per Asset Class

24%

12%

7%11%

33%

12%63%

8%

22%

Investment Allocation Per Asset Class

100%

1957

P0.01-B

29%

19%9%

32%

1965

P0.4-B

1975

P3.0-B

79%

6%

13%

1985

P23.5-B

1995

P109.8-B

19%

17%

17%

35%

2005

P181.8-B

38%

6%14%

5%

29%

2012

P334.8-B

DISTRIBUTION OF INVESTMENTS 1957 - 2012

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%195

7195

9196

1196

3196

5196

7196

9197

1197

3197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

Variable Income Fixed Income

Fixed Income includes Gov’t Securities, Bank Deposits, Dev’t Loans, Corporate Notes & Bonds, Member Loans and Housing Loans

Variable Income includes Equities and Real Estate Properties

Investment Allocation Per Asset ClassVARIABLE INCOME VS. FIXED

INCOME 1957 - 2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

195

7

195

9

196

1

196

3

196

5

196

7

196

9

197

1

197

3

197

5

197

7

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

201

1

Lending and Asset Mgt Division Capital Market Division Treasury Division

Investment Allocation Per Asset ClassBy Organizational

Unit 1957 - 2012

Capital Market Division handles Equities, Corporate Notes & Bonds, and Government Notes/Bonds and LoansLending and Asset Management Division handles Salary, Housing, Development and Real Estate Properties

Treasury Division handles Treasury Bonds/Notes/Bills and Bank Deposits

Government Securities As % of IRF

1958-2012

0%

20%

40%

60%

80%

100%

120%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

Consolidated

Government Securities As % of IRF

1958-2012

0%

20%

40%

60%

80%

100%

120%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

SS Fund

Government Securities As % of IRF

1975-2012

0%

20%

40%

60%

80%

100%

120%

-

2,000

4,000

6,000

8,000

10,000

12,000197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

In M

illio

n P

esos

Investment Value

As % of IRF

EC Fund

Bank Deposits As % of IRF 1958-2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

5,000

10,000

15,000

20,000

25,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

Consolidated

Bank Deposits As % of IRF 1958-2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

SS Fund

Bank Deposits As % of IRF 1975-2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

In M

illio

n P

esos

Investment Value

As % of IRF

EC Fund

Development Loans As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

Consolidated

Development Loans As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

SS Fund

Development Loans As % of IRF 1975-2012

0%

1%

2%

-

20

40

60

80

100

120

140

160

180

200197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

In M

illio

n P

esos

Investment Value

As % of IRF

EC Fund

Member Loans As % of IRF 1958-2012

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

-

10,000

20,000

30,000

40,000

50,000

60,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

Consolidated

Member Loans As % of IRF 1958-2012

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

SS Fund

Member Loans As % of IRF 1975-2012

0%

5%

10%

15%

20%

25%

30%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

In M

illio

n P

esos

Investment Value

As % of IRF

EC Fund

Housing Loans As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

Consolidated

Housing Loans As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illio

n P

esos

Investment Value

As % of IRF

SS Fund

Housing Loans As % of IRF 1975-2012

0%

5%

10%

15%

20%

25%

30%

35%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000197

5197

7197

9198

1198

3198

5198

7198

9199

1199

3199

5199

7199

9200

1200

3200

5200

7200

9201

1

In M

illio

n P

esos

Investment Value

As % of IRF

EC Fund

Equities As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

20,000

40,000

60,000

80,000

100,000

120,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

Consolidated

Equities As % of IRF 1958-2012

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

20,000

40,000

60,000

80,000

100,000

120,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

SS Fund

Equities As % of IRF 1975-2012

0%

1%

2%

3%

4%

5%

6%

-

200

400

600

800

1,000

1,200197

5

197

7

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

201

1

In M

illion P

eso

s

Investment Value

As % of IRF

EC Fund

Corporate Notes & Bonds As % of IRF

1958-2012

0%

1%

2%

3%

4%

5%

6%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

Consolidated

Real Estate Properties As % of IRF 1958-2012

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000195

8196

0196

2196

4196

6196

8197

0197

2197

4197

6197

8198

0198

2198

4198

6198

8199

0199

2199

4199

6199

8200

0200

2200

4200

6200

8201

0201

2

In M

illion P

eso

s

Investment Value

As % of IRF

Consolidated

8.33%, 22.78%

6.23%, 7.60%

3.60%, 7.13%

3.36%, 2.86% 10.94%, 2.63%

2.02%, 10.81%

1.83%, 4.76%

0.52%, 10.20%

1.05%, 8.52%

0.00%

4.00%

8.00%

12.00%

16.00%

20.00%

24.00%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

Standard Deviation

Gov’t Sec

Equities

Housing

Real EstateMember

Loans

CONSOLIDATED

RO

IRISK-RETURN PROFILE OF SSS ASSET CLASSES2007-2012

HIGH YIELD, LOW RISK

LOW YIELD, HIGH RISK

HIGH YIELD, HIGH RISK

LOW YIELD, LOW RISK

AVERAGE RETURNS

RISK = STANDARD DEVIATION OF RETURNS

Standard Deviation in %, Returns in %

Bank Deposits

Business Loans

Corp. Notes & Bonds

HIGH YIELD, MEDIUM RISK

MEDIUM YIELD, MEDIUM RISK

MEDIUM YIELD, HIGH RISK

MEDIUM YIELD, LOW RISK

LOW YIELD, MEDIUM RISK

4.01%, 4.97%

10.94%, 2.63%

8.41%, 22.93%

6.23%, 7.60%

3.51%, 3.04%

3.75%, 7.59%

1.10%, 8.61%

0.56%, 10.34%

2.14%, 11.56%

0.00%

4.00%

8.00%

12.00%

16.00%

20.00%

24.00%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

Standard Deviation

Gov’t Sec

Equities

Housing

Real Estate

Member Loans

CONSOLIDATED

RO

IRISK-RETURN PROFILE FOR SS FUND2007-2012

HIGH YIELD, LOW RISK

LOW YIELD, HIGH RISK

HIGH YIELD, HIGH RISK

LOW YIELD, LOW RISK

AVERAGE RETURNS

RISK = STANDARD DEVIATION OF RETURNS

Standard Deviation in %, Returns in %

Business Loans

Bank Deposits Corp.

Notes & Bonds

LOW YIELD, MEDIUM RISK

MEDIUM YIELD, HIGH RISK

MEDIUM YIELD, MEDIUM RISK

MEDIUM YIELD, LOW RISK

HIGH YIELD, MEDIUM RISK

3.37%, 4.28%

2.29%, 1.18%

2.44%, 1.72%

2.55%, 4.08%

2.41%, 4.69%

1.31%, 4.12%

1.38%, 4.52%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00%

Standard Deviation

Gov’t Sec

Equities

Housing

Member Loans

CONSOLIDATED

RO

IRISK-RETURN PROFILE FOR EC FUND2007-2012

HIGH YIELD, LOW RISK

LOW YIELD, HIGH RISK

HIGH YIELD, HIGH RISK

LOW YIELD, LOW RISK

AVERAGE RETURNS

RISK = STANDARD DEVIATION OF RETURNS

Standard Deviation in %, Returns in %

Bank Deposits Business

Loans

MEDIUM YIELD, HIGH RISK

LOW YIELD, MEDIUM RISK

MEDIUM YIELD, MEDIUM RISK

MEDIUM YIELD, LOW RISK

HIGH YIELD, MEDIUM RISK

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Standard Deviation

RO

IRISK-RETURN PROFILE OF SSS-HELD STOCKS2007-2012

ABS

ALI

AC

AGI

AEV

BPIFPH

BEL

BDO

AP

PCOR

FGEN

EEI

EDC

DMC

MWC

ICT

HLCM

FLI

FOOD

GLO

MER

MEG

MBT

JFC

ION

SECB

SCC

RLC

PX

PSE

SMC

URC

SM

UBP

TEL

SMPH

EQUITIES

RISK = STANDARD DEVIATION OF RETURNS

Standard Deviation in %, Returns in %

HIGH YIELD, LOW RISK

LOW YIELD, LOW RISK

HIGH YIELD, HIGH RISK

LOW YIELD, HIGH RISK

AVERAGE RETURNS

LOW YIELD, MEDIUM RISK

MEDIUM YIELD, HIGH RISKMEDIUM YIELD,

MEDIUM RISK

MEDIUM YIELD, LOW RISK

HIGH YIELD, MEDIUM RISK

SSS Investment in T-Bills/T-Bonds/Bank Deposits

As of May 31, 2012

3.85% 4.05%

6.25%

7.82%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

90 D

ays

and

Bel

ow

91 D

ays

- 364

Day

s

3 Y

ears

- 5

Yea

rs

7 Y

ears

- 25

Yea

rs

Investment Value (PhP Billion)

Ave. Interest Rate

SSS Investment in Corporate Bonds and Notes

6.90%

7.48%

8.17%

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

0.000.501.001.502.002.503.003.504.004.505.00

6 yr

s an

d be

low 7

yrs

10 y

rs

Investment Value (PhP Billion) Ave. Interest Rate

As of May 31, 2012

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Inflation 4.4% 6.1% 3.1% 3.0% 5.1% 7.6% 6.2% 2.8% 6.2% 4.1% 3.8% 4.8% 2.8%

91D T-Bill 9.86% 8.87% 5.43% 6.03% 7.34% 6.36% 5.35% 3.40% 5.39% 4.19% 3.73% 1.37% 2.01%

SSS ROI 7.42% 9.19% 8.12% 5.93% 5.81% 7.04% 6.15% 8.65% 13.81% 9.71% 10.90% 10.49% 12.61%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Inflation91D T-BillSSS ROI

2000-2012

Performance BenchmarksROI1 vs. T-Bill and Inflation Rates

1All Asset Classes

Performance BenchmarksReturn-On-Investments (Annualized)

Year Gov’t. Securities

Bank Deposits

Corporate Bonds

Business Loans Equities Total

2000 12.65% 10.13% 22.19% 13.24% -2.86% 4.78%

2001 13.93% 8.68% 14.77% 13.10% 3.69% 8.14%

2002 16.40% 24.21% 11.62% 11.82% 1.64% 6.76%

2003 14.49% 2789.19% 10.34% 12.02% 2.93% 7.49%

2004 14.04% 23.08% 0.51% 11.42% 2.80% 6.73%

2005 12.89% 7.20% 0.72% 11.99% 3.30% 6.44%

2006 11.63% 7.17% 1.16% 11.10% 3.44% 6.25%

2007 10.56% 5.36% -18.55% 10.62% 14.89% 11.30%

2008 8.68% 6.16% 0.17% 10.63% 37.16% 17.55%

2009 8.36% 5.30% 10.37% 9.47% 20.65% 12.00%

2010 7.94% 4.21% 7.74% 10.01% 23.35% 13.39%

2011 8.39% 4.16% 7.99% 10.69% 15.92% 10.97%

May 2012 8.15% 3.69% 7.32% 9.67% 25.96% 14.29%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Inflation 4.4% 6.1% 3.1% 3.0% 5.1% 7.6% 6.2% 2.8% 6.2% 4.1% 3.8% 4.8% 2.8%

91D T-Bill 9.86% 8.87% 5.43% 6.03% 7.34% 6.36% 5.35% 3.40% 5.39% 4.19% 3.73% 1.37% 2.01%

SSS ROI 4.78% 8.14% 7.34% 7.49% 6.73% 6.44% 6.25% 11.30% 17.55% 12.00% 13.39% 10.97% 14.29%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%Inflation91D T-BillSSS ROI

Performance BenchmarksROI2 vs. T-Bill and Inflation Rates

2Less Member Loans, Housing Loans and Real Estate Properties

2000-2012

106

Where Government Funds Go

107

Comprehensive Integrated Infrastructure Program Investment Requirement

Transportation 952.01 47.2%

Power and Electrification 456.00

22.6%

Water Resources 346.95 17.2%

Communications/Digital Infrastructure

66.03 3.3%

Social Infrastructure 177.79 8.8%

Support to ARCs 18.06 0.9%

By Sector (in Billions)

NG 881.45 43.70%

GOCCs 337.32 16.73%

GFIs 3.67

0.18%

LGUs 44.44 2.20%

Other Sources 86.74 4.30%

Private 663.20 32.88%

By Financing Source (in Billions)

108

Bonds

o HGC Debenture Bondso Ayala Land FXR Bondo Manila Waters FXR Bondo Globe Telecom FXR Bondo SMB FXR Bondo Aboitiz FXR Bondo Megaworld Corp.

FXRBondso Filinvest Land, Inco Energy Dev’t. Corpo Tanduay Dist., Inc

Notes

o SM Yamamura FXR Noteso Globe FXR Noteso First Phil Holdings FXR Noteso Metrobank Lower Tier 2o RCBC Tier 2o Allied Bank Lower Tier 2o SMIC FXR Noteso BDO Lower Tier 2o SM Prime FXRN o DBP Lower Tier 2o ICTS FXR Noteso Security Bank Tier 2o Smart FXR Noteso Aboitiz FXR Noteso Meralco FXR Noteso Megaworld FXR Noteso Filinvest FXR Noteso PLDT FXR Noteso Energy Dev’t. Corp FXR Noteso Aboitiz FXR Noteso UBP Lower Tier 2o Aboitiz Equity Venture FXRNo Federal Land FXR

DirectLoans

o Waterfront Phils., Inco Empire East Land

Holdings

Private Fixed Income Capital Market Investments Under CBLD

109

Smokey MountainBefore After

Empire East Land Holdings

Ayala Corporation

Globe Telecom

Total loans released=

P 2,067.480-M Total number of

releases= 84

111

Financing Programs for Tourism Projects

112

Tourism Projects Funded by the Program

VISAYAS

LUZONAgustina Inn & Restaurant

Amtrust Holdings, Inc.D. P. Torres Realty Corporation

Don Pedro LodgeEsperanza P. Nasayao

First Santa Rosa Hotel Corp.Grandma's Hotel & RestaurantGreenview Lodge Hotel, Resort

Homeowners Development Corp.IMP Sea Breeze Resort

King David's Palace HotelLa Union Country Resort Hotel,

Inc.Manuel Navarro Apartelle

Megaworld Properties & Holdings, Inc.

Nawawalang Paraiso Spring ResortPangasinan Regency Corporation

Patio Aserado ResortPhilkraft Realty & Dev. Corp.Real Development Co., Inc.SJD Holdings Corporation

SM Maranao, IncorporatedSps. Jorge & Ameurfina Bondad

Sps. Manuel/Tessie AblanVilla Cristal Resort, Hotel & Rest.Zanzibar Hotel Mgmt. Services

Alona Kew White Beach Oscar Richard GarinBohol Tropics Resort P & T Phils., Inc.Butalid Realty Corp. REJ Corporation

Cang's, Inc. Sps. Alex/Catalina O. AdanoCebu Holiday Plaza, Inc. Sps. George & Virginia Lao

Cebu Insular HotelSps. Venerando & Lilia

DumadagChriscent Ville Hotel Sps. Victor & Conrada Lim

Gold Label Mktg., Inc. Sta. Monica Beach ResortLapu-Lapu Resort & Dev.

Corp.The Habitat (Cahirup

Armogenia)Mango Park hotel Corp. TSC Development Corporation

O.G. Holdings Corp.Unchuan Development

Corporation

Amgar Development & Investment Corp.Anflo Resort Dev. Corp.Butuan Resort Operators, Inc.Camiguin Island Resorts, Inc.Canoy Realty Development Corp.Casa LeticiaChali Beach Resort & CottagesCKY Sons Dev. Corp.D' Dynasty, Inc.Grand City Hotels, Inc.Harbor Light Hotel & RestaurantHighlander Hotel, Inc.Hotel CamilaInaki LarrazabalMalagos Orchids Resort, Inc.Mandaya Hotel CorporationMaze Parks & Resort, Inc.Metro Davao CorporationMGM Resort, Inc.Phil. Gateway Hotel, Inc.Pine Hills HotelPrivate Enterprises Corp.Sps. Benny/Elena Baguio/Elena Tower InnVilla MargaritaWater Adventure Park

MINDANAO

113

Enchanted Kingdom

Cebu Holiday PlazaCebu Waterfront Hotel

Panglao Beach Resort

Financing Programs for Tourism Projects

Started in Feb. 1998 Total loan releases= 126 Total amount released= P 1,750.178-

M

114

SSS-GSIS Special Financing Program

A. Bylsons and Co., Inc. JAPRL Development Corp. Pangasinan Five Star Bus Co., Inc.

Abre Enterprises Jim Peter Garments & Knitwear Corp. Philpack Commercial Enterprises, Inc.

Achievers Farm Incorporated Joe Kuan Food Corporation Quality Products CorporationAffiliated Food Stores, Inc. Jolley Valley Hardware, Electrical &

Auto SupplyQuorum International, Inc.

Artrender Industries, Inc. Jonson Manufacturing Co., Inc. Robson Label ManufacturingAsia Metal Manufacturing

CompanyJovian Import-Export, Inc. Rogelio Relucio/3R Metal Craft

Asteltrade Corporation Junction Jr. Corporation assumed by Kinship Development Corporation

Rounce Printing Corporation

Bensan Industries, Inc. LH Meat Products Saldana and Co., Inc.C.B. Barangay Enterprises

Towing and Trucking Services, Inc.

LYS Marketing Corporation Samyu Oil Products, Inc.

Cabalen Management Co., Inc. M. D. Juan Enterprises, Inc. Sevilla Candle Factory, Inc.Cathay Pacific Multi-

Commodities Corp.Malabon Longlife Trading Corp. Shining East Marketing Corp.

Cymar International, Inc. Maldita Mrktg. Sales, Inc. Solid Movers & Trading Co., Inc.Dorothy Shoe Manufacturing,

Inc.Marosa Soap & Cosmetics

Laboratories, Inc.Sps. Henry & Juliet Lee/JH

CommercialEcco Food Corporation Max's Makati, Inc. The Everliving CompanyEclipse Sound Innovation/Edwin

C. OngMega Motion Works, Inc. Tone GuidePress, Inc.

Elasco International Corporation Metro Container Corporation Totolo Enterprises Corp.ENJ Printers Supply/Sps. Noel &

Elvira SantiagoMetro Dry Clean Ventures, Inc. Tri-Mark Foods, Inc.

Enlon Philippines Corporation Metro Steel Manufacturing Corp. Triotech Phils./Trinidad O. Madriaga

ESP Printers, Inc. Mix Plant, Inc. Uni-Bag Trading/Sps. Delfin & Erlinda Reyes

Fitrite, Inc. Moreta Shipping Lines, Inc. UniCabwire Industries, Inc.Fortune Gas Corporation Mosaic Communications, Inc. Venplas Manufacturing

CorporationGinajane Enterprises Myrex Ethica Laboratories, Inc. Webengton Garments

ManufacturingGivano Footwear Int'l. Corp. Myro Food Products Winnex Vinyl CorporationHP Print Trader, Inc. New Ek Lee Steel Works Winnex Vinyl Products Corp.Isidoro Galvanized and Steel

Mfg.Pacific Arts and Décor International Wisp and Warp Company, Inc.

Enterprises Funded by the Program in Metro Manila

Northern Luzon

Southern Luzon

Senorita Farms, IncSps. Eliezer and Cleofe MabaoSps. Fortunato/Jasiel Aleman

Mindanao

Central Luzon

VisayasAsia Pacific Timber & Plywood Corp

Cebu Hybrid Farms CorporationCebu Prime Farms Corp

Celebes Oil Mill, Inc.CMA Cleaning Products, Inc.Design Ventures Cebu, Inc

Heritage Muebles Mirabile Exp., Inc.Mark Stephen L. Montelibano

Negor EnterprisesOrmoc Liberty Marketing, Inc.Pearl City Manufacturing Corp

Solid Motorcycle Distributors, Inc.TJ Foods, Inc.

Other Funded Enterprises Nationwide

C.J. Enterprises, IncorporatedDagupan Filco Merchandising Corp.

Euro-Asia Rainbow Farms

Agrikultura Pilipinas, IncErlinda Abalos Ricemill

Gotcha Foods, IncGuaranfood Manufacturing

Jomee Real Estate Company, IncJY & Sons Realty Company, Inc.

Katherine De Leon Rice MillRDA Farms/Renato Abarentos

RNT Enterprises, IncSps. Pacifico & Soledad Cueto

Basic Agricultural & Livestock FarmCream Cake Centre, Inc.

Emmar Poultry Supply & Gen. MdseFormix, Incorpoarted

Golden Harvest ProductHoc Po Feeds Corporation

J.C.R.K.P. EnterprisesM.F. Sabariaga Marble Plant

P.S. Valdecantos Enterprises, Inc.S.A. del Poso Fried Corn Mfg.

San Diego-Montaos Marketing CorpSps. Justo & Estelita MicuTrinitas Publishing, Inc.

117

Total loan releases

135

Total amount released

P2,348.121-M

Hospital Financing Program

Metro ManilaAmisola Maternity Hospital

Asian Hospital, Inc.Capitol Medical Center

Cruz-Custodio Medical Corp.Fairview Polymedic, Inc.

FEU - Dr. Nicanor Reyes Medical Fdn., Inc.Las Pinas City Medical Center, Inc.

Makati Medical Center Manila Doctors HospitalMedical Center Manila

Medical Center MuntinlupaMedical City Gen. Hospital

Mother Regina Medical Foundation, Inc.Muntinlupa Polymedic, Inc.

Perpetual Help Medical CenterQuezon City Medical Center, Inc.

St. Luke's Medical Center

Luzon North

NCR

Luzon Central

Luzon South

118

Hospitals Funded in the

Luzon AreaAlmora Gen. Hospital

De Vera's Pediatric Clinic & HospitalDr. Ester Garcia Gen. Hospital

Isabela Doctors Gen. Hospital, Inc.LMC Specialist Group, Inc.Medical City Dagupan, Inc.Nazareth General Hospital

Our Lady of Fatima Medical Clinic & HospSpecialist Group Hosp & Trauma CenterSt. Paul's Hospital of Tuguegarao, Inc.

The Doctors Clinic & Hospital, Inc.

Northern Luzon

Angeles Univ. Medical Center B.A. Hospital

Bataan Women's Hospital/Dr. Salud BagalsoCentral Luzon Doctors HospitalCounty Medical & Trauma ClinicGarden Village County Hospital

Grace Memorial Maternity & Surgical HospJowell Gen. Hospital/Dr. Manuel Yu

Medical Center San MiguelN.E. Good Samaritan Gen. Hospital, Inc.

Plaridel Maternity & Gen HospitalR.G. Evangelista Gen. Hospital

Sagrada Familia HospitalSenor Sto. Nino Hospital

St. Francis Assissi Maternity & Med ClinicTalon Enterprises & Management, Inc.

Central Luzon

Advanced Medical Systems, Inc.Bauan Hospital, Inc.

Calamba Medical Center, Inc.Central Hospital Corp.

Divine Mercy Hospital, Inc.DLSU Medical Center

Dr. Johnnel R. Zapanta Gen. HospitalFamily Care Hospital, Inc.

Hermano Miguel Febres Cordero Med FdnLipa Medics, Inc.

Lucena United Doctors Hospital, Inc.Malaluan Hospital Corp

Mary Mediatrix Medical Center, Inc.Mercado Gen. Hospital, Inc.

N.L. Villa Memorial Hospital, Inc.San Lorenzo Medical Specialist, Inc.

St. Anne Emergency Hosp (Mindoro), IncSt. James Hospital, Inc.

St. Mark's Medical Specialist, Inc.St. Patricks' Hospital, Inc.

St. Vincent Community HospitalSto. Rosario Hospital (Aurea Maderaso)

Southern Luzon

Hospital Financing Program

Hospital Financing Program

Mindanao South

Mindanao West

Mindanao North

Visayas Central

Visayas West

119

Hospitals Funded in the Visayas-Mindanao Area

Bukidnon Dostor's Hospital, Inc.Cagayan de Oro Doctors, Inc.

Cagayan de Oro Medical CenterCagayan de Oro Polymedic Gen. HospitalChristian Samaritan Health Services, Inc.

Cotabato Medical Specialist HospitalDavao Doctors Hospital

Igano Community HospitalLa Vina General Hospital

Llaguno Medical Clinic & HospitalMisamis University

Mlang Doctors Hospital, Inc.MMG Hosp & Health Services Coop of Davao

Mt. Matutum Medical Center, Inc.Rivera Multitest Lab, Pharmacy & Hosp

Santos Clinic, Inc.Sorilla Medical & Maternity Clinic

St. Claire HospitalSt. Elizabeth Hospital, Inc.

St. Michael's Medical Clinic & HospitalHealth & Development Coop. Hospital

Tubod Community Hospital

Mindanao

Iloilo Doctors' Hospital, Inc.L.Z. Ramiro Medical Center, Inc.Metro Cebu Community Hospital

Nazareno Clinic/Sps. RelampagosOur Mother of Perpetual Help HospitalPerpetual Succour Hosp. of Cebu, Inc.

Riverside Medical Center, Inc.St. Gabriel Hospital, Inc.

St. Paul's Hosp. of Iloilo, Inc.

Visayas

Capitol Medical Center

Makati Medical Center

Philippine General Hospital

Hospital Financing Program

St. Luke’s Medical Center

Asian Hospital Inc.

Hospital Financing Program

122

•Total loan releases = 298

•Total amount released = P 4,804.667 Million

Maximum Loanable Amount

Financing Program for Education Institutions

Appeared in 2002 SSS Annual Report

Infant Jesus Academy, Inc. has 1,832 students

SSS granted a P10-M loan in Aug 1996 to construct 15 new classrooms, a laboratory, a computer room, a faculty room, and a chapel

SSS interest rate was fixed at 15% (thru BPI), compared to 25% from other sources

Financing Program for Education Institutions

Asian Institute of Management

De La Salle University

Centro Escolar University

Financing Program for Education Institutions

University of the East University of BaguioAteneo de Davao

University

125

Financing Program for Education Institutions

Abba Ivy Montessori School La Consolacion Coll. of Kalookan, Inc. St. Benedict College, Inc.Alejandro Colleges, Inc. La Consolacion Sch, Deparo, Kalookan City St. Benedict School of Novaliches, Inc.

Asian Institute of Management, Inc. La Sallian Educational Innovators Fdn. St. Bernadette School of Alabang, Inc.Centro Escolar University Little Friends Academy, Inc. St. James School

Child Learning Center, Inc. (Marymount) Lourdes School of Mandaluyong, Inc. St. Joseph Academy of ValenzuelaChildren of Mary Immaculate Mary Immaculate Parish School, Inc. St. Mary of the Woods School

Christian Standard Academy, Inc. Miriam College Foundation, Inc. St. Paul's Coll. of Paranaque, Inc.Claret School Montessori Child Learning Center St. Paul's College of Q.C., Inc.

De La Salle University O.B. Montessori Center, Inc. St. Raphael Montessori, Inc.Diliman Educational Corp Our Lady of Pilar Montessori Center, Inc. St. Therese of the Child Jesus Academy

Diliman Preparatory School Our Lady of the Abandoned Catholic School St. Vincent School of Q.C.Divine Grace School, Inc. PAREF Southridge School, Inc. STI College - Cubao Corporation

Divine Light Academy, Inc. PAREF Woodrose School, Inc. Sto. Nino de Novaliches SchoolDivine Word Learning Center Perpetual Help College of Rizal, Inc. Sunny Hill Child Learning Center

Dominican College, Inc. Phil Rehabilitation Inst. Foundation, Inc Technological Institute of the Phils.Don Carlo Cavino School, Inc. Phil. Coll. of Technological Resources The Gentle Shepherd School, Inc.Elizabeth Seton School, Inc. Philippine Women's University The Learning Child, Inc.

Escuela de San Lorenzo Ruiz, Inc. Pio del Pilar Educational Institution The Seed Montessori Schools, Inc.Espiritu Santo Parochial School Rizal City School, Inc. University of the East

Good Shepherd Christian School, Inc. S.G. Bernardo Foundation, Inc. Villagers Montessori SchoolHoly Angels Montessori School, Inc. Sacred Heart Institute, Inc. West Bay Colleges, Inc.

Infant Jesus Academy, Inc. School of St. Anthony, Inc. Yaman Lahi Foundation, Inc.International Education Specialists South Crest School, Inc.

Jose Rizal College Southeast Asian Science Foundation, Inc.L.T. Southville School, Inc. St. Anthony Academy of QC

Funded Educational Institutions in Metro Manila

Central LuzonBaliuag Colleges St. Ann Children School, Inc.

Baliuag University Corp St. Anne's AcademyBataan Educational Dev. Corp. St. Augustine College, Inc.

Brightwoods Educ. Ventures, Inc. St. Catherine's Academy of Gerona, Inc.Bulacan Ecumenical School, Inc. St. James Academy, Inc.

Colegio de San Lorenzo, Inc. St. John School of San Juan, San Ildefonso East Central Colleges, Inc. St. Mark Academy of Sta. Ignacia, Inc.

Eulogio R. Dizon College of Nueva Ecija St. Michael Academy of MeycauayanHoly Family Academy St. Michael Learning Center of Meycauayan

Interworld Coll. of Science & Tech Fdn St. Michael School of Marilao, Inc.Jose Feliciano College, Inc. St. Paul Coll of San Miguel, Bulacan

M.V. Gallego Foundation, Inc. St. Paul School of San Rafael, Inc.Meycauayan Institute, Inc. St. Paul's College of Bocaue

Montessori de Sagrada Familia, Inc. St. Vincent Academy of Apalit, PampangaNarciso School, Inc. Tarlac Little Angels' Montessori School

Regina Carmeli College The Good Samaritan Colleges, Inc.Republic Central Colleges, Inc. Trinitas School, Inc.

San Lorenzo Ruiz Center of Studies Yverdon de Pestallozi School of BulacanSiena School, Inc/Siena Sch of San Jose Zensville Montessori School, Inc.

Casa del Nino Montessori School of IlaganComputronix College, Inc.

Cordillera Carreer Dev. College, Inc.Data Center Coll of the Phils. of Bangued

Escuela de Nuestra Sra. de la SaletteHilkan Montessori, Inc.

Lyceum of Northern Luzon, Inc.Northwestern College

St. Albert the Great School, Inc.St. Francis Kiddieland, Inc.

St. Joseph College of Banggao, Inc.St. Paul University, Inc.

St. Therese of the Child Jesus Educ'lUniv. of Baguio, Inc.

Northern Luzon

Funded Educational Institutions in the Central & Northern Luzon Areas

Asian College of Science & Technology FdnCBD Institute of Learning, Inc.Cebu International School, Inc.

Childlink Playcenter, Inc.Divine Word College of Tagbilaran, Inc.Global Foundation for Internation EducJohn B. Lacson Coll. Foundation, Inc.

Mandaue Christian School, Inc.Northwestern Visayan Colleges, Inc.

PAREF Westbridge School, Inc.St. Dominic de Savio Learning Center, IncSt. Paul's Business School of Tacloban

Tanon College, Inc.Univ. of Cebu, Inc.

Univ. of Southern Phils. Foundation, IncUniv. of St. La Salle, Inc.

Visayas

Ateneo de Davao UniversityCagayan de Oro College, Inc.

Corpus Christi SchoolDavao Central CollegeFatima de Davao, Inc.

Iligan Medical Center College, Inc.International School of CDO

Liceo de Cagayan, Inc.Maryknoll High School of Panabo, Inc.

Mindanao Electronics Institute, Inc.Misamis University

Notre Dame of Dadiangas CollegeNotre Dame of Marbel University

Notre Dame of Tacurong College, Inc.Philadelphian Christian Academy

Rizal Special Education Learning Center Sacred Heart of Jesus Montessori School

Southern Inst. of Tech. of CDOSt. Mary's School of Cagayan de Oro

St. Michael's Coll. of Iligan, Inc.Univ. of Mindanao, Inc.

Urios CollegeZamboanga Arturo Eustaquio College Fdn

Mindanao

Funded Educational Institutions in the Visayas and Mindanao Areas

129

Number of

Approved Loans

25

Amount

219.9-M

Sable Vocational Academy, Inc.Dualtech Training Center Foundation, Inc.Dualtech Training Center Foundation, Inc.CLCC Institute of Computer Arts & Tech

Patria Sable Corpus College, Inc.Mariner's Polytechnic Coll. Foundation

Laguna Technological InstituteNorthern Phils. Coll. for MaritimeAlbay School of Electronics, Inc.

Ten A's Computer EnterprisesSystems Technology Institute, Inc.

Inst. of Creative Computer TechNorthern Phils. Coll. for MaritimeNorthern Phils. Coll. for Maritime

Central Luzon Inst. of Tech.Dualtech Training Center Foundation, Inc.

Guzman Institute of TechnologySamson Institute of Technology, Inc.Samson Institute of Technology, Inc.

Asian Polytechnic College, Inc.

Luzon

Bohol Institute of Technology, Inc.Tojong College, Inc.

Mandaue Technical Institute

Visayas

Southern Phils. Technical Institute, Inc.St. John Gen. Hosp. of Buug CollAviation Inst. of Gen. Santos, Inc.

Mindanao

Special Financing Program for Vocational & Technical Schools

130

Greater Manila Area

Bay Area Property: Manila Harbor Center - Bay Area Property, Financial Center Area

Land: Montalban Property

Residential: Urdaneta Village - House & Lot, Renaissance Towers

Office Condominiums: Philamlife Tower, Pioneer Plaza, Globe Telecomm Plaza

Cebu City

Land: Toledo City

Davao City

Office & Residential Condominiums -

-Pryce Properties

SSS Real Estate Investments

PhilAm Tower Memorial Lots (e.g. Cagayan de Oro Gardens) Residential (e.g. Casa Real, Urdaneta Village)

Condominium UnitsPioneer Highlands Renaissance Towers

REAL ESTATE INVESTMENTS

MAJOR EQUITY INVESTMENTS

PROPERTIESAYALA LAND INC.

MAJOR EQUITY INVESTMENTS

PROPERTIESBELLE

CORPORATION

MAJOR EQUITY INVESTMENTS

PROPERTIESFILINVEST LAND, INC.

MAJOR EQUITY INVESTMENTS

PROPERTIES

MEGAWORLD CORP.

Office

Township Development

Leisure

Residential

MAJOR EQUITY INVESTMENTS

MAJOR EQUITY INVESTMENTS

PROPERTIES

Commercial Centers

Office BuildingsROBINSONS LAND CORP. Hotels

Residentials

PROPERTIES

VISTA LAND & LIFESCAPES, INC.

MAJOR EQUITY INVESTMENTS

SERVICESPLDT

MAJOR EQUITY INVESTMENTS

SERVICES

ABS-CBN GMA

MAJOR EQUITY INVESTMENTS

SERVICES

GLOBE PAXYS, INC.

MAJOR EQUITY INVESTMENTS

MAJOR EQUITY INVESTMENTS

Manila Int’l. Container Terminal (MICT)

Madagascar Operation

China Operation

SERVICES

HOLDING FIRMSM PRIME HOLDINGS, INC.

MAJOR EQUITY INVESTMENTS

HOLDING FIRMAYALA CORPORATION

Automotive Dealership, Inc.

MAJOR EQUITY INVESTMENTS

HOLDING FIRM

MINING & OIL

MAJOR EQUITY INVESTMENTS

FINANCIAL INDUSTRIAL

MAJOR EQUITY INVESTMENTS

Total loan releases 28,260,235

Total amount released P205.22-B

1957- 2012

MEMBER LOANS

Loans Granted

Amount of Loans ReleasedYears 2000 – May 2012Amount in Billion Pesos

Number of Loans ReleasedYears 2000 –May 2012

Salary Loans

2000- May 2012TOTAL SALARY

LOANS GRANTED :P146.96-B

2000- May 2012 TOTAL NUMBER

OF SALARY LOANS GRANTED :10,836,356

0

2

4

6

8

10

12

14

16

Amount 7.17 9.94 10.49 11.06 10.84 10.11 12.44 11.44 13.25 13.55 11.17 15.8 9.7

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Number 712,355 805,866 823,007 862,610 814,029 765,983 900,170 822,507 923,260 949,573 803,504 1,059,932 593,560

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Salary/Educational/Calamity/Separated/Emergencyas of December 31, 2011(Amount in Millions)

Aging of Member Loans

Status of Accounts

No. of Accounts % to Total

Principal Not Yet Due

Amount DueTotal Principal

Balance % to TotalPrincipal Interest Penalty Total Amount Due (a) (b) (c ) (d) (e) = (b) + (c ) + (d) (a) + (b)

CURRENT

284,668 3.89%

5,819.35

97.64

5.59 -

103.22 5,916.98 12.92%

DELINQUENT

7,034,132 96.11%

8,729.02 31,149.12 16,761.08 40,029.83 87,940.03

39,878.14 87.08%

1 to 5 months

1,431,604 19.56%

4,364.51

2,371.32 129.94

22.22

2,523.48

6,735.83 14.71%

6 to 11 months

376,117 5.14%

2,909.67

1,387.36

72.83

48.95 1,509.14

4,297.03 9.38%

12 to 23 months

434,836 5.94%

1,163.87

2,945.87 212.73

260.14

3,418.73

4,109.73 8.97%

24 to 35 months

326,074 4.46% 290.97

2,670.90

326.28

485.14

3,482.33

2,961.87 6.47%

36 to 47 months

279,277 3.82% -

2,140.22 464.74

678.64

3,283.60

2,140.22 4.67%

48 to 59 months

236,780 3.24% -

1,757.27 559.26

813.87

3,130.40

1,757.27 3.84%

5 years & above

3,949,444 53.96% - 17,876.18 14,995.30 37,720.87 70,592.35

17,876.18 39.04%

TOTAL

7,318,800 100.00%

14,548.37

31,246.75

16,766.67

40,029.83 88,043.25

45,795.12 100.00%

Total loan releases 331,281

Total amount releasedP49.56-B

1957- 2012

HOUSING LOAN PROGRAM

Loans Granted

Amount of Loans ReleasedYears 2000 – May 2012Amount in Million Pesos

Number of Loans ReleasedYears 2000 – May 2012

Housing Loans1

2000- May 2012 TOTAL HOUSING

LOANS GRANTED :P0.71-B

2000- May 2012 TOTAL NUMBER OF

HOUSING LOANS GRANTED :

1,8691Direct/Multi-Window

0.00

50.00

100.00

150.00

200.00

250.00

Amount 94.91 221.5 176.6 92.91 68.30 28.96 13.13 7.67 1.23 1.29 2.24 1.35 0.75

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

100

200

300

400

500

600

Number 261 527 569 275 127 56 25 16 2 2 4 4 1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

as of December 31, 2011(Amount in Millions)

Source: IAD

Aging of Direct Housing Loans

Principal Interest CI PenaltyTotal

Amount Due

Current 915 6.25% 64.97 0.00 27.15 0.00 0.00 27.15 92.12

Delinquent 13,736 93.75% 455.22 1,585.32 2,207.43 4,722.47 4,641.82 13,157.04 13,612.26

1-3 Mons 89 0.61% 5.01 0.34 0.03 0.00 0.00 0.37 5.384-6 Mons 53 0.36% 3.47 0.38 0.20 0.01 0.01 0.60 4.077-12 Mons 115 0.78% 8.24 2.11 0.50 0.06 0.06 2.72 10.9713-24 Mons 256 1.75% 22.16 8.49 3.27 0.47 0.47 12.69 34.8525-35 Mons 185 1.26% 11.91 9.66 3.47 0.71 0.70 14.54 26.4436-48 Mons 242 1.65% 13.71 17.10 7.81 2.39 2.38 29.68 43.3949-60 Mons 242 1.65% 15.86 21.49 13.04 5.29 5.14 44.95 60.80Over 60 Mons 12,554 85.69% 374.87 1,525.76 2,179.12 4,713.55 4,633.07 13,051.49 13,426.36Total 14,651 100.00% 520.19 1,585.32 2,234.58 4,722.47 4,641.82 13,184.19 13,704.38

Nationwide Accounts % to TotalAmount Due Total

ObligationTheoretical

Balance

Philippine Stock Exchange Index (PSEi)

2006-2012

Financial Indicators

Peso-Dollar Exchange

2006-2012

Financial Indicators

Interest Rates

1990-2012

Financial Indicators

PSEi vs. Exchange Rate

2006-2012

Foreign Exchange

PSEi

Financial Indicators

PSEi vs. Interest Rates

2006-2012

Interest Rates

PSEi

Financial Indicators

Exchange Rate vs. Interest Rates

2006-2012 Exchange Rate

Interest Rates

Financial Indicators

1987-2012In Billion Pesos

INVESTMENT PERFORMANCE

Real Estate

Properties,

6.3-B, 2%

Housing Loans,

59.5, 17%

Gov’t. Securities,122.8-B,

34%

Dev’t. Loans,

12.6-B, 4%

Equities,105.3-B,

29%

Member Loans,

32.1-B, 9%

Bank Deposits,

13.0-B, 4%

Corporate Notes & Bonds,

6.6-B, 2%

INVESTMENT INCOME (1987-

2012):P358.10-B

AVERAGE ROI (1987-2012):

10.24%

2007-2012In Billion Pesos

INVESTMENT PERFORMANCE

*January-May 2012

(2.00) -

2.00 4.00 6.00 8.00

10.00 12.00 14.00 16.00 18.00

2007 2009 2011

Gov't Securities Bank Deposits

Dev't Loans Corp Notes & Bonds

Equities Housing Loans

Real Estate Salary Loans

Average ROI (2007-2012) =10.91%

Investment Income (2007-2012): P141.50-B

Real Estate

Properties,

4.9-B, 4%

Housing Loans,3.5, 3%

Gov’t. Securities,

34.0-B, 24%

Dev’t. Loans,

0.4-B, 0%

Equities,76.8-B,

54%

Member Loans,13.9-B,

10%

Bank Deposits,5.3-B, 4%

Corporate Notes & Bonds,

2.4-B, 2%

2007-May 2012In Billion Pesos

INVESTMENT PERFORMANCE

Total Income P136.14-B

HOUSING LOANSP3.21-B, 2.4%

EQUITIES P76.77-B, 56.5%

EQUITIES P76.77-B, 56.5%

CORPORATE NOTES & BONDS

P2.41-B, 1.8%

GOVT SECURITIES P33.40-B, 24.6%

GOVT SECURITIES P33.40-B, 24.6%

MEMBER LOANSP13.09-B, 9.6%

Average ROI (2007- May 2012) =11.66%

DEVT LOANSP0.41-B, 0.3%

BANK DEPOSITSP1.96-B, 1.4%

SS FUND

Total Income P5.36-B

HOUSING LOANSP0.29-B, 5.3%

HOUSING LOANSP0.29-B, 5.3%

EQUITIES P0.08-B, 1.4%

EQUITIES P0.08-B, 1.4%

GOVT SECURITIES P0.63-B, 11.8%

GOVT SECURITIES P0.63-B, 11.8%

MEMBER LOANSP1.04-B, 19.3%

MEMBER LOANSP1.04-B, 19.3%

Average ROI (2007- May 2012) =4.15%

BANK DEPOSITSP3.32-B, 62.0%

BANK DEPOSITSP3.32-B, 62.0%

EC FUNDREAL ESTATE PROPERTIESP4.89-B, 3.6%

162

Difference between real annual compounded publicly-managed pension fund returns and real income per capita growth in selected countries

Source: IMF International Finance Statistics; Authors’ calculations.

-8.4%

-50% -40% -30% -20% -10% 0% 10%

Philippines

Morocco

US

Sweden

Malaysia

Canada

India

Japan

Korea

Jamaica

Sri Lanka

Singapore

Kenya

Guatemala

Costa Rica

Ecuador

Tanzania

Egypt

Venezuela

Zambia

Uganda

Peru

Average

gross returns minus income per capita

Worse

Better

Source: World Bank

Investment Performance

163

Difference between annual compounded real publicly-managed pension fund returns and bank deposit rates in 20 countries (from worst to best)

-1.8%

-12% -10% -8% -6% -4% -2% 0% 2% 4%

Japan

Korea

Philippines

Sw eden

US

M alays ia

India

Morocco

Singapore

Canada

Jam aica

Costa Rica

Kenya

Guatem ala

Sri Lanka

Ecuador

Egypt

Venezue la

Zam bia

Uganda

Average

gross re turns m inus bank depos it r ate

Source:Pension Fund Management

By Robert Holzmann (2001)

World Bank

Worse

Better

Investment Performance

2012 Investment Performance

(As of May 31, 2012)

INVESTMENT PORTFOLIOAs of May 31, 2012(Amount in Millions)

Amounts in Million Pesos

SS % EC % Consolidated %

FIXED INCOME INVESTMENT P 196,178.94 63.9% 27,744.89 99.3% 223,923.83 66.9%

1.GOVERNMENT SECURITIES P 123,557.23 40.3% 4,017.93 14.4% 127,575.15 38.1%

2.CORPORATE NOTES & BONDS P 12,700.40 4.1% - 0.0% 12,700.40 3.8%

3.LOANS TO MEMBERS P 56,818.40 18.5% 7,693.01 27.5% 64,511.41 19.3%a. Salary Loans P 42,763.52 13.9% 5,440.32 19.5% 48,203.84 14.4%b. Housing Loans P 13,701.63 4.5% 2,251.25 8.1% 15,952.88 4.8%

c. Development Loans P 353.24 0.1% 1.44 0.0% 354.68 0.1%

4.BANK DEPOSITS P 3,102.92 1.0% 16,033.95 57.4% 19,136.87 5.7%

VARIABLE INCOME INVESTMENT P 110,721.15 36.1% 202.74 0.7% 110,923.89 33.1%

1.EQUITIES P 97,664.45 31.8% 202.74 0.7% 97,867.19 29.2%

2.PROPERTIES P 13,056.70 4.3% - 0.0% 13,056.70 3.9%

TOTAL INVESTMENT P 306,900.09 100.0% 27,947.63 100.0% 334,847.72 100.0%

INVESTMENT PORTFOLIOConsolidatedAs of May 31, 2012(Amount in Billions)

Loans to Members64.51-B19.27%

Development Loans P0.35-B

0.11%

Salary LoansP48.20-B14.40%

Real PropertiesP13.06-B

3.90%

Gov't SecuritiesP127.58-B

38.10%

Corporate Notes & Bonds

P12.70-B3.79%

Bank DepositsP19.14-B

5.72%

EquitiesP97.87-B29.23%

Housing LoansP15.95-B

4.76%

Total Investment: P334.848-B

INVESTMENT EARNINGS & OTHER INCOMEConsolidated(January to May 2012)

Amounts in Million Pesos

EARNINGS & OTHER INCOME

EXTERNAL TARGET Jan- May

2012

ACTUAL Jan- May

2012% of

TARGET

Actual Annualized

ROI

FIXED INCOME P 5,862.14 P 6,652.93 113.49% 7.65%

1. GOVERNMENT SECURITIES P 3,642.03 P 3,971.30 109.04% 8.15%

2. CORPORATE NOTES & BONDS P 369.11 P 362.49 98.21% 7.32%

3. LOANS TO MEMBERS P 1,659.98 P 2,021.88 121.80% 6.90%a. Salary Loans P 1,437.39 P 1,851.10 128.78% 10.11%b. Housing Loans P 201.40 P 155.53 77.22% 2.29%c. Development Loans P 21.19 P 15.25 71.96% 9.67%

4. BANK DEPOSITS P 191.02 P 297.26 155.62% 3.69%

VARIABLE INCOME P 5,655.00 P 9,496.69 167.93% 23.06%1. EQUITIES P 5,429.23 P 9,305.12 171.39% 25.96%2. PROPERTIES P 225.77 P 191.57 84.85% 3.57%

TOTAL INVESTMENT INCOME P 11,517.14 P 16,149.62 140.22% 12.61%

OTHER INCOME P 105.10 P 17.99 17.12% 12.40%

TOTAL INCOME P 11,622.24 P 16,167.62 139.11%

INVESTMENT EARNINGS & OTHER INCOMEJanuary to May 31, 2012(Amount in Millions)

EARNINGS & OTHER INCOME SS

Jan-May 2012

EC Jan- May

2012

Consolidated Jan-May 2012

FIXED INCOME P 6,120.44 532.49 6,652.93

1. GOVERNMENT SECURITIES P 3,875.02 96.28 3,971.30

2. CORPORATE NOTES & BONDS P 362.49 - 362.49

3. LOANS TO MEMBERS P 1,843.22 178.66 2,021.88 a. Salary Loans P 1,687.61 163.49 1,851.10 b. Housing Loans P 140.40 15.13 155.53 c. Development Loans P 15.21 0.03 15.25

4. BANK DEPOSITS P 39.71 257.55 297.26

VARIABLE INCOME P 9,456.29 40.40 9,496.69 1. EQUITIES P 9,264.71 40.40 9,305.12 2. PROPERTIES P 191.57 - 191.57

TOTAL INVESTMENT INCOME P 15,576.73 572.90 16,149.62

OTHER INCOME P 17.95 0.05 17.99

TOTAL INCOME P 15,594.67 572.94 16,167.62

INVESTMENT EARNINGS & OTHER INCOMEConsolidated(January to May 2012)

Amounts in Million Pesos

EARNINGS & OTHER INCOME

ACTUAL Jan- May

2011

ACTUAL Jan- May

2012% Increase/ Decrease

FIXED INCOME P 6,119.99 P 6,652.93 8.71%

1. GOVERNMENT SECURITIES P 3,285.51 P 3,971.30 20.87%

2. CORPORATE NOTES & BONDS P 387.28 P 362.49 -6.40%

3. LOANS TO MEMBERS P 2,198.67 P 2,021.88 -8.04%a. Salary Loans P 1,621.99 P 1,851.10 14.13%b. Housing Loans P 555.37 P 155.53 -72.00%c. Development Loans P 21.31 P 15.25 -28.45%

4. BANK DEPOSITS P 248.53 P 297.26 19.61%

VARIABLE INCOME P 7,070.40 P 9,496.69 34.32%1. EQUITIES P 6,815.23 P 9,305.12 36.53%2. PROPERTIES P 255.16 P 191.57 -24.92%

TOTAL INVESTMENT INCOME P 13,190.38 P 16,149.62 22.43%

OTHER INCOME P 89.51 P 17.99 -79.90%

TOTAL INCOME P 13,279.89 P 15,897.62 19.71%

INVESTMENT EARNINGS & OTHER INCOMEConsolidatedJanuary to May 2012(Amount in Billions)

Loans to MembersP2.02-B12.5%

Development Loans0.02-B0.10%

EquitiesP9.31-B57.6%

Corporate Notes & BondsP0.36-B

2.2% Housing LoansP0.16-B

1.0%Government

SecuritiesP3.97-B24.6%

Bank DepositsP0.30-B

1.8%

Other IncomeP0.02-B0.11%

Real PropertiesP0.19-B

1.2%

Salary LoansP1.85-B11.4%

Total Income: P16.17-B

Provident Fund

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011INVESTMENT LEVEL

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011INVESTMENT LEVEL

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011 Investment Income and Average Yield Rate

170.63

196.02

226.94

210.01 210.61 217.88 216.31

222.46 227.24

232.87

264.90

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

-

50.00

100.00

150.00

200.00

250.00

300.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

In m

illions

Investment Income

Ave. Yield Rate

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(in M

illio

ns)

Year

2008- 2011 Ave. Yield Rate for

Bank Deposits

Investment Income

Ave. Yield Rate

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011 Investment Income and Average Yield Rate

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(in M

illio

ns)

Year

2008- 2011 Ave. Yield Rate for

Government Securities

Investment Income Ave. Yield Rate

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011 Investment Income and Average Yield Rate

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(in M

illio

ns)

Year

2008- 2011 Ave. Yield Rate for

Loans to Members

Investment Income

Ave. Yield Rate

SOCIAL SECURITY SYSTEM PROVIDENT FUND2001-2011 Investment Income and Average Yield Rate

8.00%

8.20%

8.40%

8.60%

8.80%

9.00%

9.20%

9.40%

9.60%

9.80%

10.00%

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2009 2010 2011

(in M

illio

ns)

Year

2009- 2011 Ave. Yield Rate for

Corporate Notes and Bonds

Investment Income

Ave Yield Rate

SOCIAL SECURITY SYSTEM PROVIDENT FUND2009-2011 Investment Income and Average Yield Rate

END OF PRESENTATION

An Overview of Investments & Finance of the SOCIAL SECURITY SYSTEM