SSS confident in First Gen investment

The Social Security System (SSS) has downplayed concerns over potential risks to its investments amid the ongoing dispute within the Lopez Group.

The pension fund expressed confidence in the stability of First Gen Corp. despite allegations raised by the Lopez majority bloc.

SSS told the Inquirer that it remains a “long-time partner” of the Lopez Group and is hopeful that the family will resolve its internal issues constructively for the benefit of all stakeholders, including the pension fund.

“We remain confident in First Gen’s stability,” the SSS said.

The pension fund added that its exposure to the Lopez Group accounts for less than one percent of its investible reserve fund, suggesting that any potential financial impact would be limited.

This came after the Lopez majority claimed that government pension funds, such as SSS, the Government Service Insurance System (GSIS) and global investment firm KKR & Co. Inc. could face billions of pesos in losses if so-called “poison pill” provisions tied to First Gen were triggered.

Based on the April 30 closing price of P16.56 per share, SSS’ stake in First Gen is valued at over P1 billion. That of the GSIS is nearly P1 billion.

Meanwhile, KKR is estimated to have about P12 billion in exposure through The Hongkong and Shanghai Banking Corp. Ltd.

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The provisions, embedded in transactions with Prime Infrastructure Capital Inc., would allow a forced buyout of certain assets at a 25-percent discount in the event of a change in management control.

The Lopez majority, led by Eugenio “Gabby” Lopez III, argued that such mechanisms could erode the value of institutional investments, potentially affecting the ability of pension funds to support members and pay benefits.

Citing feedback from its commissioner, who represents the fund on the board of First Philippine Holdings Corp., the Lopez Group’s flagship holding firm, SSS said that “governance is solid, disclosures to the Philippine Stock Exchange are timely and accurate and management is sound.”

The pension fund also highlighted its strong financial position, reporting a 10-percent increase in topline revenues to P125 billion in the first quarter of 2026, while net income rose 14 percent to P30 billion.