FOURTEENTH CONGRESS OF THE 
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First Regular Session 
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REPUBLIC OF THE PHILIPPINES ) 
Introduced by Senator Antonio “sonny” F. Trillanes IV 
EXPLANATORY NOTE 
Except for the personnel of the AFP and the PNP, membership in the GSIS by all government 
employees is compulsory. It is thus mandatory for a member to pay a monthly contribution that 
is deductible to his salary. The government shoulders its share in the contribution. However, this 
arrangement does not in any way dilute the fiduciary character of the funds managed by the 
GSIS. The fact remains that the funds under its administration are partly contributed by the 
government employees. It is well to stress that the GSIS, particularly, its funds does not belong 
to the government, much less to any administration, and that the interest of the members can only 
be duly safeguarded if the administrators of GSIS act with utmost fidelity and care. 
Section 36 of Presidential Decree No. 1146 as amended by Republic Act No. 8291, otherwise 
known as the “Revised Government Service Insurance System Act of 1997”, enumerates the 
possible investments that the GSIS may enter into. Funds of the GSIS that are not needed to meet 
the current obligations may be invested under such terms and conditions and rules and 
regulations that may be prescribed by the GSIS Board of Trustees. The investment should satisfy 
the requirements of liquidity, safety or security and yield. The GSIS is likewise mandated to 
submit an annual report on all investments made to both Houses of Congress of the Philippines. 
In other words, the GSIS is constrained to remain circumspect in handling the funds in order to 
protect the thousands upon thousands of members against dubious investments. 
Nevertheless, it would be naive to presume that these safeguards are full proof. There is no 
assurance that these investments wiII invariably yield a return considering the volatility of the 
market. The fact that the prices of stock vary daily cannot be denied. The exchange rate of the 
peso vis-avis the U.S. dollar and other convertible foreign currencies also change from day to 
day. These fluctuations in market prices and in foreign exchange rates certainly have 
unpredictable effects upon the funds of GSIS. 
The broad authority granted the GSIS presumes that as long as the investment is amongst those 
allowed under the law, the same is good for members. But that presumption cannot reasonably 
be indulged in casually in these times of fast economic change marked by unstable costs of living 
and fluctuations in the value of domestic currency. Investment in stocks, bonds, debentures and 
evidence of indebtedness other than those issued by government expose the GSIS funds to 
disproportionate risks. Such investments defeat the purposes of establishing a fiduciary fund that 
would answer primarily for the retirement needs, education, health, and welfare of the members 
and their dependents. 
This bill seeks to trim down the areas of investments to only those that assure predictability in 
order to protect the mass of members from the vagaries of trade and commerce, and from 
enterprises with false pretentions of track record of profitability. 
*34- 
ANT 
0 “SONNY” F. TRILLANES JY 
Senator 
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FOURTEENTH CONGRESS OF THE 
) 
First Regular Session 
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REPUBLIC OF THE PHEIPPINES ) 
S E N A T E  
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S. No 
Introduced by Senator Antonio ''Sonny)) F. Trillanes IV 
AN ACT 
LIMITING THE INVESTMENT OF FUNDS OF THE GOVERNMENT SERVICE 
INSURANCE SYSTEM AMENDING FOR THE PURPOSE SECTION THIRTY- 
SIX OF PRESIDENTIAL DECREE NUMBER ELEVEN " D R E D  FORTY-SIX 
AS AMENDED, OTHERWISE KNOWN AS THE REVISED GOVERNMENT 
SERVICE INSURANCE SYSTEM ACT OP 1977 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled 
SECTION 1. Section 36 of Presidential Decree No. 1146 as amended otherwise 
hown as the Revised Government Service Insurance Act of 1977, as further amended by 
Republic Act No. 8291, is hereby amended to read as follows: 
SEC. 36. Investment in Funds. - The funds of the GSIS which are 
not needed to meet current obligations may be invested under such terms 
and conditions and rules and regulations as. may be prescribed by the 
Board: Provided, That investment shall satisfy the requirements of 
liquidity, safety, security and yield in order to ensure the actuarial 
solvency of the funds of the GSIS: Provided, further, That the GSIS shall 
submit an annual report on all investments made to both Houses of 
Congress of the Philippines, to wit: 
(a) 
In interest-hearing bonds or securities or other evidence of 
indebtedness of the Government of the Philippines; 
(b) 
In interest-bearing deposits or securities in any domestic 
bank doing business in the Philippines; Provided, That in case of such 


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deposits, these shall not exceed at any time the unimpaired capital and 
surplus or total private deposits of the depository bank, whichever is 
smaller: Provided, further, That said bank has prior designation as a 
depository bank for the purpose by the Monetary Board of the Central 
Monetary Authority. 
(c) 
In direct housing loans to members and group housing 
projects secured by first mortgage, giving priority to the low income 
groups and in short - i d  medium - krm loans to members such as salary, 
policy, educational, emergency, stock purchase plan and other similar 
loans: Provided, That no less than forty percent (40%) of the investable 
funds of the GSIS Social Insurance Fund shall be invested for these 
purposes; 
(d) 
In bonds, securities, promissory notes or other evidence of 
indebtedness of educational or medical institutions to finance the 
construction, improvement and maintenance of schools and hospitals; 
(e) 
In real estate property including shares of stocks involving 
real estate property and investments secured by first mortgages on real or 
other collaterals acceptable to the GSIS: Provided, That such investments 
shall, in the determination of the Board, redound to the benefit of the 
GSIS, its members as well as the general public; 
[(t) 
secondary markets;] 
[(g) 
In debt instruments and other securities traded in the 
In loans to, or in bonds, debentures, promissory notes or 
other evidence of indebtedness of any solvent corporation created or 
existing under the laws of the Philippines;] 
[(h) 
In common and preferred stocks of any solvent corporation 
or financial institution created or existing under the laws of the Philippines 
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listed in the stock exchange With proven track record of profitability over 
the last three (3) years and payment of dividends at least once over the 
same period;] 
[(i) 
In domestic mutual funds including investments related to 
the operations of mutual funds; and] 
[(i) 
In foreign mutual funds and in foreign currency deposits or 
foreign currency-denominated debts, non-speculative equities and other 
financial instruments or other assets issued in accordance with existing 
laws of the countries where such financial instruments are issued: 
Provided, That these instruments or assets are listed in bourses of the 
respective countries where these instruments are issued: Provided, further, 
That the issuing company has proven track record of profitability over the 
last three (3) years and payment of dividends at least once over the same 
period.] 
SEC. 2. The funds that have been invested in activities heretofore disallowed 
shall, under the supervision of the GSIS Board of trustees and in accordance with the 
guidelines it shall promulgate therefore, be liquidated within one year after the effectivity 
of this Act. All such investments including all profits and earnings derived therefore shall 
revert to the general fund of the GSIS. 
SEC, 3. The penal provisions under Presidential Decree No. 1146, as amended, 
shall apply in the liquidation of funds as herein provided. 
SEC. 4. The GSIS shall submit a liquidation report to be included in the annual 
report on all investments made to both the Senate and the House of Representatives of 
Congress of the Philippines. 
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SEC. 5. All laws, decrees, executive orders, rules and regulations inconsistent 
herewith are hereby repealed or amended accordingly. 
SEC. 6. This Act shall take effect fifteen (15) days from its publication in the 
Official Gazette or in any two newspapers of general Circulation. ' 
' 
Approved, 
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