SSS eyes higher profits from REIT investments

State-run Social Security System (SSS) is optimistic to boost its profit from its P6-billion investment in real estate investment trusts (REITs) in 2024, amid expectations of a rate cut in the second half of the year.

In an emailed statement, SSS president and chief executive officer Rolando Macasaet said he is bullish on REITs, as he said this could be among the top contributors to this year’s investment income due to higher dividend yields.

Also driving the optimism is the possible rate cut later this year, with the central bank hinting of policy easing as early as August as inflation is now expected to come in slower than earlier anticipated.

The SSS currently invests 5% of its equity funds in REITs, and the agency looks to further increase on opportunities.

“REIT is a fantastic investment structure for pension funds like SSS because 90% of the lease income is mandatorily distributed. The REIT sector also greatly contributes to economic development since REIT players must reinvest within one year,” SSS Investments Sector concurrent acting head Ernesto Francisco said.

“Looking ahead, we envision a promising future for the Philippine REIT sector, which could potentially become a major contributor to the capital market,” he added.

Under its mandate, the SSS is tasked to promote social justice and provide protection to members and families against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. — Jon Viktor D. Cabuenas/RSJ, GMA Integrated News