Hontiveros: GSIS invested P1 billion in online gambling platform

Senator Risa Hontiveros on Tuesday alleged that P1 billion worth of members’ savings was invested by the Government Service Insurance System (GSIS) in an online gambling platform. 

Hontiveros disclosed this in her privilege speech, noting that the GSIS, under the leadership of suspended GSIS President Jose Arnulfo “Wick” Veloso, invested in DigiPlus when the online gambling platform’s shares were being offered at a peak of P65.30.

“Those shares have since hit a low of P13.68. Lugi na,” the senator said. 

“In the first place, what was GSIS thinking, investing funds in online gambling? Eh, tayo nga po, mga kasamang nagtatrabaho sa gobyerno, ni hindi pwedeng tumungtong sa casino lalo na hindi pwedeng magsugal doon. Kaya bakit ang GSIS, todo taya, at ginawang puhunan ang pera ng public employees sa sugalan,” she added. 

(Government employees can't even set foot in a casino, let alone gamble there. So why is GSIS investing government employees’ money in gambling?)

According to Hontiveros, there seems to be a “pattern of reckless and questionable investment decisions” by the current GSIS leadership.

“The guardrails we have put in place to guide and protect GSIS investments are seemingly being breached,” she said. 

GMA News Online sought a comment from GSIS and Veloso and will update this story once they respond. 

Senate to probe

Senator Erwin Tulfo, chairperson of the Senate Committee on Games and Amusement, then made a manifestation on the floor, committing to investigate the information divulged by Hontiveros. 

“Kaisa niyo po ako Senadora Risa hinggil po dito at nais ko po talagang maimbestigahan ito. At kung may pagkakataon po, maghahain po ako ng panukalang batas na kailangan imbistigahan po ito at makasuhan po si Ginoong Veloso,” Tulfo said. 

(I am with you, Senator Risa, on this matter, and I want this to be investigated. And if there’s an opportunity, I will file a bill that will investigate this and charge Mr. Veloso.) 

“Ito po ay aking paiimbestigahan kung may kumita, mukhang may kumita po rito, mayroon pong commission o kickback at hindi po ito karapat dapat at katanggap-tanggap,” he added.

(I will investigate this to see if anyone benefited. It seems like someone made a profit here, or had a commission or kickback. This is not acceptable.) 

The Office of the Ombudsman in July placed Veloso and six other officials under preventive suspension without pay for six months amid its probe into the P1.4 billion deal with Alternergy. 

The Ombudsman said it “found sufficient grounds” to suspend Veloso and six other GSIS officials, considering that there is strong evidence showing their guilt” of possible grave misconduct, gross neglect of duty, and violation of reasonable office rules and regulations over the P1.4 billion stock purchase from AlterEnergy Holdings Corporation.

Veloso, in response, said that GSIS acknowledged the Ombudsman’s inquiry into the pension fund’s Alternergy investment and is "cooperating fully with the investigation."

“We welcome this opportunity to affirm the integrity of GSIS’s investment decisions and will provide further updates once the process concludes. As the investigation is ongoing, we will refrain from additional comments at this time,” he said.

Hontiveros, meanwhile, stressed that the deal between GSIS and Alternergy “reveals multiple red flags.”

“Glaringly, Alternergy's market capitalization was far below the P15 billion minimum reportedly required under GSIS policy for investible companies. The shares were not even listed with the Philippine Stock Exchange on the dates of the execution of the agreement and the payment of the subscription,” she said. 

“Even worse, Alternergy also appears to be ‘highly overleveraged.’ Simply put, they have too much debt, with a debt-to-equity ratio of 194% and a dangerously low interest coverage rate. Paano nakapagdeklara ng P40 million cash dividend ang kompanya na iyan, eh puro sila utang, at in financial distress na?”

(How could that company declare a P40 million cash dividend when it is in debt and already in financial distress?) 

Hontiveros thus said that the Senate should act swiftly to review the policies, procedures, and guidelines covering the GSIS’s investment decisions.

“We should strengthen GSIS’s investment policy compliance and oversight. We should increase transparency and accountability in their investments. And we should plug policy gaps and clarify ambiguities,” she said.

“Ang pensyon ng pampublikong sektor, hindi pangsugal [the pension of the public sector is not for gambling]. GSIS should not waste or gamble away the future of those who serve our nation,” she added. –NB, GMA Integrated News