DOF to also probe GSIS after execs’ suspension
The Department of Finance (DOF) will launch its own investigation into the stock investment decisions of the Government Service Insurance System (GSIS) following the Ombudsman’s order to suspend its president and general manager, Jose Arnulfo “Wick” Veloso, and six other executives for six months.
Finance Secretary Ralph Recto on Tuesday said the DOF would check if Veloso and the others violated “any rule imposed by law or board resolution” when they made certain investment decisions, some of which were earlier flagged by the Commission on Audit (COA).
Ombudsman Samuel Martires has ordered the preventive suspension of the GSIS officials over the state pension fund’s P1.45-billion investment in Alternergy Holdings Corp.
In an order Martires signed on July 11, they were suspended without pay pending the outcome of the administrative charges they face for grave misconduct, gross neglect of duty, and violation of reasonable office rules and regulations.
Aside from Veloso, the order covers Executive Vice Presidents Michael Praxedes and Jason Teng; Vice Presidents Aaron Samuel Chan and Mary Abigail Cruz-Francisco; officer Jaime Leon Warren and acting officer Alfredo Pablo.
‘Cooperating fully’
A preventive suspension is not a disciplinary action but a temporary measure to prevent officials from influencing or obstructing an ongoing investigation.
In a text message to the Inquirer, Veloso said the GSIS was “cooperating fully” with the Ombudsman.
“We welcome this opportunity to affirm the integrity of GSIS’ investment decisions and will provide further updates once the process concludes,” he said. “As the investigation is ongoing, we will refrain from additional comments at this time.”
According to the resolution, an investigation was conducted in January based on an anonymous complaint and found that the GSIS acquired 100 million perpetual preferred shares in Alternergy at P14.50 apiece, through a subscription agreement signed by both parties on Nov. 7, 2023, for an aggregate price of P1.45 billion.
The deal had previously been framed by Alternergy as part of its efforts to accelerate renewable energy development in the country.
Alternergy is chaired by former Energy Secretary Vicente Perez Jr., who served in the Arroyo Cabinet from 2001 to 2005.
In November 2023, Perez welcomed the GSIS as a “cornerstone investor,” saying its invested funds would support the company’s portfolio of wind, solar and run-of-river hydropower projects.
Ombudsman findings
The Ombudsman found the transaction to be in violation of the 2022 GSIS Investment Policy Guidelines. According to the investigation, the purchase did not acquire stipulated approvals from the GSIS Assets and Liabilities Committee, Risk Oversight Committee and its Board of Trustees.
It also violated GSIS investment rules because the shares were not listed on the Philippine Stock Exchange (PSE) at the time of the agreement and payment, the resolution said.
Alternergy also did not meet the required minimum market capitalization and exceeded the limit on shares available for public trading.
Veloso, who previously served as president of the Philippine National Bank, was appointed to lead the country’s largest public pension fund in July 2022. He submitted his courtesy resignation on May 29 following the post-election government revamp and performance review ordered by President Marcos, but it was not accepted.
Ombudsman Martires issued the suspension order days before the expiration of his seven-year term on July 27.
Following a special board meeting on Monday, the GSIS appointed its executive vice president for support services, Juliet Bautista, as officer in charge.
In a text message to the Inquirer, Recto said there were no plans at the moment to further shake up the GSIS leadership despite the controversy.
DigiPlus exposure, too
But Recto, who as finance secretary supervises government financial institutions, said the DOF would also take a closer look into the GSIS’ controversial stock picks.
Recto said the probe would not only touch on Alterenergy but also cover the pension fund’s exposure with DigiPlus Interactive Corp.
An online gaming firm and one-time stock market darling, DigiPlus has suffered lately from a brutal sell-off amid proposals in Congress to ban online gambling due its adverse social impact.
While losses are normal in investments, Recto said, the DOF will check if the GSIS’ purchase of shares in DigiPlus—which reportedly amounted to over P1 billion—followed the strict rules of the pension fund.
Data showed that the share price of DigiPlus had fallen by 69.7 percent from its 52-week high of P65.3 amid heightened regulatory risks in the e-gaming sector.
“What’s important is: Did GSIS management follow the guardrails imposed by Congress and IRR (implementing rules and regulations) promulgated by the board?” the finance chief said.
“Investments may go up and down on a daily or monthly basis, but certain laws, rules need to be followed. I was told Wick (Veloso) followed all rules and procedures [in the DigiPlus investment]. Will ask for a full report,” he added.
Pension funds follow strict investment rules to safeguard the long-term retirement savings of their members and avoid exposing them to unnecessary financial risks.
In a 2023 report, however, the COA said the GSIS invested a total of P2.3 billion in the stocks of three companies that “have no proven track record of profitability over the last three years.”
State auditors warned that the transactions—including the deal with Alternergy—exposed a “significant amount of members’ contributions to high risk” and may harm the financial health and stability of the pension fund.
As of March 2025, the GSIS had a total of 2.74 million members and pensioners. Its total assets amounted to P1.83 trillion.
In company’s defense
In a statement on Monday, top officials of the Investment & Capital Corp of the Philippines (ICCP), the financial advisor of Alternergy, maintained that the transaction with GSIS “adhered to strict regulatory requirements and market practices” for raising capital.
“These transactions followed strict due diligence and compliance processes. We ensured transparency at every stage of these transactions in line with our commitment to ethical and professional standards,” said ICCP chair and CEO Val Bagatsing.
“All disclosures were made to regulators and investors in line with best standards of fairness, transparency, and investor protection,” added ICCP president and chief operating officer Manny Ocampo.
When Alternergy made its debut in the stock market in 2023, the company met the stringent requirements of the Securities and Exchange Commission and the PSE, such as the minimum market capitalization, track record and profitability, the ICCP statement added.
Alternergy’s portfolio includes projects in renewable energy, such as wind and solar, run-of-river hydro and battery storage. —WITH A REPORT FROM JORDEENE B. LAGARE
