FINANCIAL STATUS STATE INSURANCE FUND As of September 30, 2015

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1 Republic of the Philippines DEPARTMENT OF LABOR AND EMPLOYMENT EMPLOYEES COMPENSATION COMMISSION 4 th and 5 th Floors, ECCBuilding, 355 Sen. Gil J. Puyat Avenue, City of Makati Tel. No Fax. No info@ecc.gov.ph Website: FINANCIAL STATUS STATE INSURANCE FUND As of September 30, 2015 A. ASSETS As of Sept., Peso Inc(dec) % Inc(dec) SSS 32,554,851, % 31,414,482, % 1,140,369, % GSIS 17,215,783, % 15,749,262, % 1,466,521, % 49,770,634, % 47,163,744, % 2,606,890, % *Data based on the unaudited FS submitted by the SSS and the GSIS As ofseptember 30, 2015, total assets of the State Insurance Fund (SIF) amounts toph49.77b; sixty-fivepercent (65%) or Ph32.55B under the Social Security System (SSS) while thirty-fivepercent (35%) or Ph17.21B is under the Government Service Insurance System (GSIS). Assetshave6% or Ph2.61 billion increases from December 31, 2014 to September 30, B. RESERVES/NETWORTH As of Sept as of December, 2014 Peso Inc(dec) % Inc(dec) SSS 32,495,206, % 31,414,429, % 1,080,777, % GSIS 17,193,269, % 15,710,570, % 1,482,698, % 49,688,475, % 47,124,999, % 2,563,475, % *Data based on the unaudited FS submitted by the SSS and the GSIS *Reserves ** Net worth 1

2 Reserves for future payment of EC claims in both private and public sector amounts to Ph49.69B which hasfive percent (5%) or Ph2.56billion increasesfrom December 31, 2014to September 30, As of September 30, 2015, total reserves of the SSS-managed SIF for future payment of EC claims in private sector amounted to Ph32.495B. reserve isincreased by 3% or Ph1.08billion from December 31, 2014 to September 30, The GSIS SIF-managed fundtotal Net worth amounts to Ph17.193B is broken down as follows: Appropriated Surplus ECIF 7,044,670, Unappropriated Surplus 10,148599, Other comprehensive Income - Networth 17,193,269, From Ph 15.71Bin 2014 to Ph17.19B as of September 30, 2015, thetotal Net worth was increased by9% or Ph1.48 billion. From the GSIS ECIF Net worth of Ph17.19B as of September 30, 2015, a total amount ofph7.045mis appropriated for payment of future claims, claims pending settlement, rehabilitation services, ECC and OSHC operating fund and for contingencies. Appropriations for years are as follows: C. REVENUE Years Amount (in millions) , , , As of September 30, 7, Table C-1 Revenue Collected from January to September 30, 2015 SSS GSIS TOTAL Members Contribution 1,365,925, % 507,062, % 1,872,987, % Investment and Other Income 720,085, % 1,179,077, % 1,899,162, % 2,086,010, % 1,686,139, % 3,772,150, % *Data based on the unaudited FS submitted by the SSS and the GSIS 2

3 From January to September 30, 2015, SIF generated total revenue of Ph3.77B: Fiftypercent (50%) or Ph1.87Bcame from the collection of members contributions whilefiftypercent (50%) or Ph1.90billionfrom investment and other income. Ph2.09B or55 the total revenue came from the SSS while Ph1.69B or 45%from the GSIS. The table below shows the details of the members Contribution and Investment and other income. Table C-2 Revenue Collected from January toseptember 30, 2014 SSS GSIS TOTAL Members Contribution 1,256,914, % 1,545,506, % 2,802,420, % Investment and Other Income 485,234, % 132,199, % 617,434, % 1,742,149, % 1,677,705, % 3,419,855, % 51% 49% Table C-3 Comparative Net increase (decrease) in Revenues (September 30, 2014 and 2015) Php Increase (Decrease) % Members' Contributions Inc(dec) Php Increase (Decrease) % TOTAL % Investment & Inc Other Income Inc (dec) (dec) SSS 109,010, % 234,850, % 343,861, % GSIS (1,038,444,086.00) -786% 1,046,878, % 8,433, % TOTAL (929,433,099.00) -27% 1,281,728, % 352,295, % Combined Revenue from January to September 30, 2015 has a net increase of10% orph millioncompared to same period (January toseptember) of net decrease in collection of members contribution amounts to Ph Million while Investment and Other Income has a net increase of37% orph1.28m. SSS revenue from January to September 30, 2015 has goneup by 20% or Ph million.likewise, the total GSIS revenue has goneupby1% or Ph8.43 millioncompared to the same period in

4 D. INVESTMENT I. Investment and Investment Income of Public Sector SIF As ofseptember 30, 2015, the Government Service Insurance System (GSIS) has a total investment amounting to Ph13.074Bwith an investment income of Ph484.52M. Investment has increase by19% or Ph2.12B from theph10.95b investment total at the end of The table below shows the comparative details of investment from January toseptember, 2015 andas at December 31, 2014: January to September, 2015 As at December 31, 2014 Php Inc (dec) % Inc (dec) CURRENT INVESTMENT Held to Maturity Investment High Yield Short-term placement 118,846, ,933, (10,086,071.00) -8% NON-CURRENT INVESTMENT Fair Value Through Profit or Loss (FVPL) ROP Notes & Bonds AFS-Peso 10,694,055, ,208,162, ,485,893, % Corporate Bonds 1,690,617, ,145,281, ,336, % Stocks Traded 571,236, ,503, ,732, % Non-current Investments 12,955,910, ,820,948, ,134,962, % TOTAL INVESTMENT 13,074,757, ,949,881, ,124,875, % Return of Investment 3.705% Of the total investment, 99% or Ph12.96B is placed under non-current investment particularly in ROP Notes, Stocks and Bonds while Ph118.85M is placed under the Held to Maturity Investment particularly on High Yield Short-term Placement.Return of Investment is at 3.705%. The table below shows thecomparative details of the investment income from January to September 30, 2014and

5 CURRENT INVESTMENT Held to Maturity Investment January to Sept January to Sept Ph % PARTICULARS Inc (dec) Inc (dec) High Yield Short-term placement 1,806, ,975, (1,169,664.00) -39% NON-CURRENT INVESTMENT Available for Sale Financial Assets Gain (Loss) on Valuation - Stocks 10,586, ,586, % Gain (Loss) on Valuation - ROP Notes (109,539,852.00) - (109,539,852.00) 100% Gain (Loss) on Valuation - Corporate Bonds 45,336, ,336, % Gain on Sale of Stocks 4, , % Dividend on Stocks 19,399, ,225, ,174, % Interest on ROP Notes & Bonds AFS-Peso 349,226, ,505, ,721, % Interest on Corporate Bonds - AFS 62,259, ,963, ,296, % Gain(Loss) on Sale of Bonds 105,440, ,440, % Investment Income 484,519, ,669, ,850, % The January to September, 2015 investment income is38% orph132.85m higher compared to the investment income earned during same period in II. Investment of Private Sector SIF As ofseptember 30, 2015, total investment of Private Sector SIF amounts toph21.098b. Investment is increasedby21% or Ph3.720BfromPh17.38B indecember 31, Investment Income from January to September 30, 2015 amounts to Ph million. Return of Investment is at 2.5%. Only three percent (3%) or Ph591.31M of the total Investment is placed under the Current Investment particularly oncorporate Notes, Held-for-Trading Financial Assets and loans receivableswhileninety-seven percent (97%) or Ph20.51Bis placed under the noncurrent investments. The table below shows the details ofthese non-current investments. 5

6 Under the Non-current Investments, total Investment in Member Loans in the amount of Ph6.56B comprised the highest rate (31%) of its investment in Loans and Receivables and generates total investment income in the amount of Ph305.81M from January to September 30, Cash Equivalent and Interest Income From January toseptember 30, 2015, the SIF at SSS has a total Cash and Cash Equivalent ofph11.24b which includes Savings Deposit-current at Ph5.87B, Time Deposits at Ph1.091B and the Special Savings Deposit in the amount of Ph4.27B. Such cash and cash equivalent generates a total interest income of Ph191.04M. Investment and other Income Investment and other Income from January to September, 2015 amounts toph m broken down as follows: AMOUNT Investment Income 527,940, Other Income Interest Income Cash in Bank/term deposits , Miscellaneous Income 1103, Investment and Other Income 720,085,

7 INVESTMENT Income from INVESTMENT % Inc. Income from January to total Investment /-Dec Investment September, 2015 Jan to Sept Investment Jan. to Sept, 2014 CURRENT INVESTMENT Held to Maturity investments -Short term money placement - 51,466, ,092,680, % 27,845, Corporate Note 495,356, Held for Trading Financial Assets (FV) 24,847, , Loans and Receivables -NHMFC 70,998, ,233, % - -Commercial and Industrial loans -Dormitory/apartment loan program 189, , % - Current Investments 591,391, % 51,673, ,167,157, % 27,845, NON-CURRENT INVESTMENTS Non-current Financial assets Available-for-Sale financial assets - Marketable securities at FV net 260,939, % 145, % - Held on Maturity Investments -Corporate Notes - 7,683, % -Corporate Bonds 1,250,000, ,767, Government Bonds 10,594,607, ,881, ,031,464, % - 11,844,607, % 152,331, ,031,464, % - Loans and Receivables Members Loan - Salary/education/calamity 6,128,361, ,293, ,876,360, % 223,799,

8 - Separated member loan 90,992, ,460, ,443, % 23,581, Emergency loan 339,109, ,054, ,115, % 22,441, Student Assistance loan 2,397, ,399, % - - Loan to Voc/tech students 16, , % 1, ,560,878, % 305,808, ,321,335, % 269,824, National Home Mortgage Finance Corporation 1,520,592, % 5,298, ,526,749, % 6,013, Home Development Mutual Fund % - Housing loans - Real Estate loan 314,813, % 12,631, ,877, % 8,893, Commercial and Industrial loans - Hospital financing program % - - Dormitory/apartment loan prog. 4,455, , ,421, % 73, ,455, % 52, ,421, % 73, Loans and Receivables 8,661,677, % 323,790, ,178,384, % 284,805, Non-Current Investments 20,506,285, % 476,267, ,209,848, % 284,805, TOTAL INVESTMENT/ INCOME 21,097,677, % 527,940, ,377,006, % 312,650, Investment (January to Sept. 2015) Return of Investment 2.50% Note: P215.29M or 69% increase in Investment income over the same period in

9 E. EXPENDITURES SSS GSIS TOTAL Benefits Payments 817,970, % 126,174, % 944,144, % Operating Expenses 59,813, % 68,973, ,787, % Management fees - 8,293, % 8,293, % 877,784, % 203,441, % 1,081,225, % 81% 19% expenditures as ofseptember 30, 2015amounting to P1.08Bwas spent by the Systems for benefits payments and operating expenses/management fee;eighty-one percent (81%) or Ph877.78M by the SSS whilenineteen percent (19%) or Ph203.44M by the GSIS. SSS spent Ph817.97M for the payment of186,822ec benefits claimsin the private sectorandph59.81mfor its operating expenses.the Operating Expenses is computed using the benefit payment ratio re the percentage of the total ECC benefit payments over the combined SSS and ECC benefit payments from the total PS and MOOE of the entire SSS (Benefit payment ratio). The GSISspent Ph203.44Mfor payment of21,988 EC benefits claims in the public sector(with prior period adjustments), Management fee charged by the GSIS to SIF amounts to Ph8.29Mcomputedalso using the Benefit Payment ratio. Operating expensesinclude Investment fees and others expensesamounting to Ph612,

10 F. EC BENEFITS CLAIMS AND PAYMENTS The table below shows the breakdown of the number of claims and benefits payments made by the Systems from January to September, 2015: NO. OF CLAIMS SSS AMOUNT NO. OF CLAIMS GSIS AMOUNT DEATH AND PENSION 151, ,305, , ,901, DISABILITY 13,827 83,067, ,355 8,308, SICKNESS 20,200 77,677, ,213, MEDICAL SERVICES ,898, ,185, FUNERAL BENEFITS 347 6,170, ,511, REHABILITATION SERVICES , , TOTAL 186, ,970, , ,174, Note: GSIS with prior years reversal Death and pension benefits comprised the highest share in the EC benefit payments made both by the SSS in the private sector and the GSIS (survivorship pension) in the public sector. 10

11 COMPARATIVE FINANCIAL POSITION: SSS GSIS As at Sept 30, 2015 As at Sept. 30, 2014 As at Sept 30, 2015 As at Sept. 30, 2014 ASSETS 32,554,851, ,096,604, ,215,783, ,031,613, LIABILITIES 59,645, , ,513, ,655, RESERVES 32,495,206, ,308,922, NETWORTH 17,193,269, ,977,957, REVENUES 2,086,010, ,742,149, ,686,139, ,677,705, EXPENSES 877,784, ,768, ,441, ,734, Comprehensive Income 1,196,779, ,381, ,482,698, ,342,971, Prepared by: MARIA TERESA M.URBANO (SGD) Chief, Finance Division December 28,