Hontiveros urges GSIS to pull out of non-compliant gambling investment

Senator Risa Hontiveros has called on the Government Service Insurance System (GSIS) to immediately divest its over P1 billion investment in online gambling firm DigiPlus, citing the harmful social impacts of gambling and the Commission on Audit’s (COA) finding that the investment violates laws and internal policies.

At the Senate Committee on Government Corporations and Public Enterprises hearing on alleged unsound GSIS investments on Thursday, Hontiveros questioned GSIS President Wick Veloso over the pension fund’s continued stake in DigiPlus, despite growing concerns over the negative effects of online gambling and the COA’s two-year-old audit report highlighting the deal’s non-compliance.

“Dito sa Kongreso, papunta kami sa direksyon, at least ng striktong regulasyon kung hindi man total ban sa online gambling. Ayaw ba ng GSIS na unahan ang Kongreso to remove your valuable investment in an area, a policy area, na palayo doon? (In Congress, we are moving in the direction of at least strict regulation, if not a total ban, on online gambling. Doesn’t the GSIS want to get ahead of Congress by removing your valuable investment in a sector—a policy area—that is moving away from that direction?),” Hontiveros asked. 

“Doesn't GSIS want to set a good example in this area dahil kayo nga yung stewards ng contributions ng ating mga miyembro?,” she further asked.

Veloso responded that GSIS has not exited the investment due to current market volatility, insisting that any divestment must still secure returns for the pension fund’s members. Hontiveros, however, was not convinced.

Hontiveros countered. “Di ko alam kung anong hihintay na stability sa market sa sector na iyan. Samantalang, yung isang bilyong piso na iyan  pwedeng-pwedeng i-invest sa ibang investment na stable, safe, at higit na mas makatao kesa sa online gambling (I don’t know what kind of market stability you're waiting for in that sector, when that one billion pesos could very well be invested in something more stable, safer, and far more humane than online gambling),”

Hontiveros also highlighted that while GSIS may have earned from the investment, the financial gains do not justify the wider public health and societal harms linked to online gamblingsuch as addiction, broken families, and lost livelihoods.

Veloso admitted that the social costs of online gambling were not considered when the GSIS made the investment in DigiPlus, stating only that the agency’s core mandate is to grow the pension fund.

“I understand that mandate of the GSIS to expand its funds,” Hontiveros replied. “So therefore, are you telling us na completely agnostic, kahit pa may social costs na nadodocument ang isang potential investment ng GSIS, hindi siya maikikwenta dun sa calculated risk?”

She also criticized the scale of the investment, questioning why such a large sum was invested in a high-risk sector with well-documented issues, even as DigiPlus reportedly lacked a three-year track record and had failed to issue dividends, adding that it is clear violations of Republic Act No. 8291 (the GSIS Charter) and GSIS’s own guidelines, as noted by the COA.

“Ibig sabihin hindi po natin kailangan o dapat hintayin na mag-stabilize yung market. Ngayon pa lang dapat tumugon na ng GSIS sa COA at iwasto yung paglabag, pati sa sariling charter. May gabay na po, two years standing ang COA sa inyo (That means we don’t need to, nor should we, wait for the market to stabilize. As early as now, the GSIS should already respond to the COA and correct the violation, even of its own charter. The COA’s guidance has been with you for two years already),” she said.

The senator said challenging GSIS to set the standard for other government-owned and controlled corporations (GOCCs), especially in responsibly investing public funds from public sector workers.

“Kayo na ang gumabay sa amin to show how ang mga GOCC’s natin over time even more and more selective sa paglalagakan nyo ng pondo lalo na ang kontribusyon ng ating public sector unions (You should be the ones to guide us in showing how our GOCCs, over time, can become more and more selective in where they place funds—especially the contributions of our public sector unions),” Hontiveros stressed.