GSIS backs PSE stock loan plan with strict safeguards

The Government Service Insurance System (GSIS) has expressed support for the Philippine Stock Exchange’s (PSE) call to revive loan programs for stocks and financial products, proposing a carefully phased rollout designed to expand investment opportunities for members while safeguarding their retirement funds.

GSIS President and General Manager Wick Veloso confirmed that the pension fund is currently studying the PSE initiative, which aims to strengthen the local capital market by involving state-run pension institutions in retail investing.

“The PSE’s call comes at a time when our markets need institutional support and our members deserve broader investment opportunities for their retirement,” Veloso said. “Our responsibility is to ensure that any program we implement protects retirement security while genuinely contributing to market health.”

Rather than launching the program on a broad scale, the GSIS proposes a broker-led pilot phase with rigorous controls. Under this framework, licensed and reputable brokers would assess members’ risk profiles, determine product suitability, provide financial advice, and handle transactions such as stock purchases and sales.

“Pension funds manage pooled investments and benefits administration. Brokers manage individual client accounts and capital market transactions,” Veloso said. “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 GSIS plan would require brokers to meet accreditation standards, including proper licensing, a solid performance record, and full compliance with Securities and Exchange Commission (SEC) regulations.

To protect borrowers, the program would enforce eligibility criteria and loan limits based on members’ salary, length of service, and available retirement savings. This is to ensure participants do not take on more financial risk than they can manage.

Mandatory disclosures will inform members that stock prices can fluctuate and that any gains or losses will affect the borrowed funds. The framework also outlines pathways to integrate the loan program with the Personal Equity and Retirement Account (PERA) and other tax-advantaged savings plans under Republic Act 9505.

Pilot testing will help evaluate how well members understand the program, assess operational systems, and determine the viability of scaling it up responsibly.

“We are not opposed to innovation. We are insisting on precision. A pilot allows us to build evidence, refine protections, and scale responsibly,” Veloso said.

The GSIS emphasized its dual mandate of supporting market development while protecting its more than 2.5 million members and pensioners.

Veloso also said GSIS is committed to working closely with the PSE, financial regulators, and other stakeholders to finalize all program components before presenting a full proposal to the GSIS Board of Trustees for review and approval.