Improper, unethical investment
Custodians of the people’s hard-earned money carry a big responsibility. It is not enough to ensure that the funds are earning, but these must be safely put in investments that show long-term stability and are without reputational risks. As such, we don’t see how investments in gambling, long regarded a high-risk sector and abhorred by many, should be in the portfolio of the state-run Government Service Insurance System (GSIS), which has a membership of more than 2.7 million Filipinos and total assets of P1.83 trillion.
Senate deputy minority leader Risa Hontiveros earlier called out GSIS for investing in DigiPlus Interactive Corp., a publicly listed Philippine holding company that operates digital and traditional leisure and entertainment facilities, including bingo parlors, online sports betting platforms, and e-gaming stations. It used to be a stock market darling before a clamor for a total online gaming ban caused its shares to plummet from its peak of P65.30 to P13.68 each, before recovering some lost ground to close at P26.90 last Friday at the Philippine Stock Exchange.
In a privilege speech early this month, Hontiveros said GSIS invested in DigiPlus when its shares were being offered at more than P65 a share. “That’s a loss! In the first place, what was GSIS thinking, investing funds in online gambling?” she asked.
Harmful social costs
Hontiveros questioned why the GSIS is using public funds, particularly those of government employees, as capital for gambling. “As of now, we in the Senate, along with the House of Representatives and even Malacañang, are all taking strong initiatives and firm stands against online gambling because of its harmful social costs,” she pointed out.
Before the 19th Congress adjourned, several senators, among them Juan Miguel Zubiri, Joel Villanueva, and Hontiveros, already called on the government to impose a total ban on online gambling in the Philippines, citing its harmful impact on many Filipinos, particularly the youth. President Marcos Jr., however, did not mention the issue in his fourth State of the Nation Address last July 28, with Malacañang later saying that the President has been “closely monitoring the situation” of Filipinos struggling with online gambling addiction. The Senate committee on games and amusement has also said it will look into the proliferation of online gambling in the country. Panel head Sen. Erwin Tulfo said the committee intends to form a solid stance before they ask the President to issue an executive order banning online gambling.
A question of ‘delicadeza’
In addressing the growing criticism of its investments, GSIS, in a statement issued last week, only said that its members and pensioners can be assured that their contributions that make up the social insurance fund remain “strong, secure, and actuarially sound.” But the issue is not about the financial soundness of the agency’s investments. The question relating to its investment in DigiPlus is not only about propriety, but whether it is morally right for GSIS, custodian of government employees and retirees’ money, to invest in DigiPlus when the entire government is now looking at the social ills caused by the proliferation of online gambling. Similar to the fate of the disgraced Philippine offshore gaming operations, online gambling risks being banned altogether. As Hontiveros correctly pointed out, what was GSIS thinking when it invested in online gambling when everyone in the government is prohibited from entering casinos, much less gamble there. Indeed, it’s a question of “delicadeza”.
“GSIS should not gamble the hard-earned money of our public servants, including our teachers, policemen and healthcare workers, in an industry that places many of our fellow Filipinos at risk,” Gatchalian said.
Intense addiction
The ill-effects of online gambling on society are well documented. Critics have noted that online gaming, which includes betting on cockfighting, have ruined many families and weakened the country’s moral fiber. Tulfo earlier said in a radio interview that many senators are against online gambling as they see the negative effects in their own community, including their household staff who are hooked on online gambling.
“For our part, we notice that when we go to wet markets, we see the intense addiction of the people, the meat butchers, the vegetable vendors, you can see them pushing buttons [on their mobile phones]. That is the problem. So many are asking for a probe on this or put an end to this online gambling,” he added.
The Senate must immediately conduct an investigation into this investment of GSIS. Lawmakers need to act swiftly and review the policies, procedures, and guidelines governing not only GSIS’s investment decisions, but other agencies such as the Social Security System as well. As Hontiveros pointed out, there is an urgent need to strengthen investment policy compliance and oversight, increase transparency and accountability in their investments, clarify ambiguities, and plug policy gaps.
