THE Philippine Stock Exchange (PSE) is looking to recalibrate the role of state-run pension funds the Social Security System (SSS) and the Government Service Insurance System (GSIS) as part of a longer-term effort to rebuild liquidity and boost investor confidence.
PSE President and Chief Executive Officer Ramon Monzon noted that earlier stock investment loan programs linked to the SSS and discussions involving GSIS showed that structure mattered as much as participation.
He noted that previous arrangements exposed pension funds to market risks that ultimately undermined confidence. Under the old setup, stock investment loans were booked directly in the name of the pension institution, a design Monzon said contributed to losses and made the programs difficult to sustain, and simply reviving the same framework would repeat past mistakes.
The PSE is now studying alternative structures that would allow SSS and GSIS members to participate in the equity markets while limiting institutional exposure.
One option being explored is linking stock loan participation to the Personal Equity and Retirement Account (PERA) system, which channels long-term savings into equities, preferred shares and dividend-yielding instruments.
Monzon stressed that any renewed participation by the SSS and the GSIS must be anchored on broader reforms aimed at restoring trust in the market.
He said the exchange could improve market infrastructure, such as trading systems, disclosure rules and product offerings, but confidence would ultimately depend on governance and transparency.
“What happened to our market is really a confidence issue,” Monzon said, pointing to the need for stronger enforcement and clearer signals of accountability to regain investor trust.
Beyond pension-linked initiatives, Monzon said the PSE was also reviewing disclosure rules to make listing less intimidating, particularly for smaller companies. He noted that some violations that are penalized today have little impact on stock prices, yet discourage firms from entering the market.
Moreover, the exchange was said to be working with regulators to better distinguish between material disclosures that affect investors and technical breaches that do not.
The PSE is likewise pushing companies to adopt PERA programs for employees, which Monzon described as both a retirement benefit and a potential source of steady, long-term capital for the market.
Monzon said that wider PERA adoption by more firms could gradually deepen domestic participation in the equities market without exposing pension funds to excessive risk.
While discussions involving SSS and GSIS continue, the PSE chief cautioned against viewing their return to stock investment programs as a quick fix for thin trading volumes. He emphasized that structural reforms must come first.
“All we can really do as an exchange is make sure the structure is right,” he said. “Liquidity and participation will follow only if confidence returns.”
