Pension Funds in a Highly Politicised Environment: The Case of the Philippines

Pensions: An International Journal, 2009

17 Pages Posted: 12 Jun 2009 Last revised: 1 Feb 2010

Date Written: June 10, 2009


This article seeks to contribute to greater understanding of the challenges faced by pension funds in developing countries. This paper reviews the investment decisions and strategies of two government owned pension funds in a highly politicized environment. The Government Service Insurance System (GSIS) and the Social Security System (SSS) are both government owned pension funds located in the Philippines. Interviews were conducted in 2007 with representatives from both pension funds, and other public and private sector interviewees as part of a broader research into the turbulent corporate governance landscape of the country. A review of politicisation and presidential appointments provide the context in which the two pension funds operate in the country. Being government institutions, these two funds have experienced the delicate balancing act of pursuing organizational objectives concurrently with political wishes – more often than not, at the expense of the former to appease the latter. One of the ongoing debates in Western corporate governance is the exercise of influence and activism by institutional investors. In this context, the institutional investor influence of GSIS and SSS are examined. The actions of the pension funds in an episode involving former Philippine President Joseph Estrada and a bank merger provide an insight into how institutional investor activism is exercised and conducted in a non-Anglo American corporate governance environment, and a developing economy with a weak bureaucratic state.

Keywords: politicisation, Philippines, pension funds, developing economies

Suggested Citation

dela Rama, Marie, Pension Funds in a Highly Politicised Environment: The Case of the Philippines (June 10, 2009). Pensions: An International Journal, 2009. Available at SSRN:

Marie Dela Rama (Contact Author)

Management Discipline Group ( email )

Haymarket Campus
PO BOX 123 Broadway
Sydney, New South Wales 2007
+61 2 9514 3635 (Phone)


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