Online Gambling Venture Sparks Controversy for GSIS
The Government Service Insurance System (GSIS) has found itself at the centre of a storm of controversy after investing over PHP 1 billion in DigiPlus Interactive Corp., an online gaming company. The investment, which was made in the company listed on the Philippine Stock Exchange, has sparked concerns among Philippine Senate leaders due to the perceived risks and ethical issues involved.
The online gambling sector has been a contentious issue in the country, with critics arguing that it poses risks to public employees' retirement savings. The investment in DigiPlus, a company with ties to the online gambling sector, has led to calls for a ban from some lawmakers, including Senator Risa Hontiveros.
The GSIS serves over 2.74 million members and pensioners, and the investment in DigiPlus has raised questions about the suitability of investing pension funds in a high-risk sector like online gambling. The investment was made at a peak share price of PHP 65.30, only to see a significant drop to as low as PHP 13.68, indicating substantial losses.
Senate leaders are particularly alarmed because online gambling is associated with social costs and instability, which many believe make it an unsuitable investment for a retirement fund meant to ensure long-term stability and safety of members' savings. The scrutiny intensified given GSIS's previous controversies, including its president being placed under suspension over another investment, further fueling distrust about their stewardship.
However, the Palace and GSIS have defended the investment, assuring that the pension fund remains financially sound. They have emphasised their commitment to transparency, accountability, and a thorough review of their charter, investment guidelines, and risk thresholds. They have also promised to cooperate with regulatory authorities and welcome further scrutiny while reviewing their investment policies.
Despite the controversy, the GSIS's financial status remains strong. As of June, it has total assets of PHP1.88 trillion, a net income of PHP76.82 billion (up 31% year-on-year), and an average 6.75% return on investments over the last five years.
It is worth noting that DigiPlus ranks No. 233 on the Fortune Southeast Asia 500 list, indicating its standing in the digital entertainment industry.
The political pressure for stricter rules on gambling and public fund management continues to grow in the Philippines, with the controversy surrounding the GSIS investment in DigiPlus adding fuel to the debate. The GSIS maintains that the Social Insurance Fund is secure and actuarially sound, and they will continue to review their investment policies to ensure the long-term stability of their members' savings.
- The political debate in the Philippines over gambling and public fund management has intensified, with the controversy surrounding the Government Service Insurance System (GSIS) investing in DigiPlus Interactive Corp., an online gaming company, being a significant contributing factor.
- The investment by the GSIS in DigiPlus, a company with ties to the online gambling sector, has prompted calls from lawmakers such as Senator Risa Hontiveros for a ban on such investments due to perceived risks and ethical issues.
- The online gambling sector's association with social costs and instability, along with the risks involved, has led to concerns among Philippine Senate leaders about the suitability of investing pension funds in this sector, particularly considering the GSIS's prior controversies.
