AMID CONFLICTS within the organization and the anxiety voiced by public servants over the life span of pension funds kept with the Government Service Insurance System of up to 2058 only, President Marcos Jr. seems to be taking his sweet time deciding on the fate of a campaign donor whom he appointed to the agency.
According to the Palace, the President is still assessing the situation at the GSIS and looking into the allegations against GSIS President Jose Arnulfo Veloso.
The conflict within the GSIS board led to the resignation on October 14 of three trustees– Merceditas Gutierrez, Emmanuel Samson and Rita Riddle, effective upon the appointment of their replacements.
QUICK REPLACEMENTS
Not long after their resignation the President appointed on October 17, concurrent GSIS board member Garry de Guzman as head of the legal oversight committee in lieu of Gutierrez, Enrico Gregorio Molina Trinidad vice Samson (pension fund’s risk oversight) and Cenon Cruz Audencial Jr. who takes the post of de Guzman.
Marcos’ swift appointments of the board– instead of replacing the embattled GSIS head – was meant to stabilize the state pension fund after a public dispute over investment losses amounting to P8.8 billion, which Veloso staunchly denied.
Audencial and Trinidad will serve as acting members representing the banking, finance, investment, and insurance sectors.
“The shake-up highlights months-long rift within the pension fund, which manages nearly P2 trillion in assets for millions of government employees, and raises fresh scrutiny on governance and risk management at the state-run institution,” reads part of an article posted on Bilyonaryo news portal.
SUDDEN TURNAROUND
Interestingly, the new appointees formed part of the group which earlier sought Veloso’s immediate resignation citing deep divisions over his investment strategies, that included investments in online gambling.
Riddle, the former chair of the GSIS audit committee, will be replaced by Gilbert Tan Sadsad, Inquirer disclosed.
The resignations came just days after the three, along with one other incumbent member of the nine-member board, sent a sharply worded letter to Veloso demanding his “immediate and irrevocable” resignation over what they described as “poor investment decisions” that allegedly led to billions of pesos in losses.
The letter was also signed by current board member Evelina Escudero and former trustees Jocelyn de Guzman Cabreza and Alan Luga.
ONE-MAN CONTROL?
The signatories accused Veloso of pursuing risky investments “marked by a disturbing lack of transparency.”
They cited what they described as “a pattern of actions seemingly designed to bypass proper governance,” including the alleged practice of splitting investment transactions — a “clear tactic,” they wrote, intended to evade the mandatory board review for investments exceeding P1.5 billion.
The GSIS board members also took a swipe at Veloso (who recently returned to his post after a preventive suspension ordered by the Office of the Ombudsman) for “fabricating issues and weaponizing administrative procedures to retaliate against [board] members exercising their fiduciary duty of oversight.”
Gutierrez, in her resignation letter, cited “a productive and tenable working relationship” with Veloso was “no longer achievable.”
Samson pointed to the “numerous” policy differences with the GSIS chief, while Riddle mentioned the “absence of transparency and shared accountability.”
NOT KEEN ON RESIGNING
Veloso meanwhile said that he would only step down if the appointing authority would ask him to.
In a radio interview last Monday, Veloso described the accusations against him as malicious, particularly the claim that he had split investments to avoid board scrutiny.
“Investments [within allowable amounts] can be done every day. It gives the flexibility to the team to be able to take advantage of market volatility.” Short of calling them ignorant on investing, Veloso explained “If you don’t understand investing, we will have issues with all of that.”
“That’s why I’m encouraging them [trustees], because of different backgrounds, to be able to clearly study and allow management to be able to execute its role. Everything there is transparent,” he added.
MISLEADING METRICS
Veloso went on to say that the fund’s financial performance “speaks for itself,” citing figures as of August 2025.
He pointed to the total assets of GSIS climbing to P1.92 trillion and a total income of P231.06 billion, with net income reaching P100.02 billion.
The trustees, in a statement last Oct. 19, said the “narrative of success” being advanced by Veloso was “predicated on misleading metrics and structural inflows that are unrelated to active investment management.”
“The reported growth in the Fund’s assets is significantly inflated by non-cash, unrealized gains from the annual revaluation of our property portfolio,” they said.
MANDATED PREMIUM HIKE
“Furthermore, a substantial portion of reported income is derived from the increase in mandatory premium collections. As a fund with a captured market, this growth is an automatic, structural feature, not a result of strategic financial management,” they said.
In July, Veloso and several other GSIS officials were suspended by the Ombudsman after an anonymous complaint questioned the fund’s P1.45-billion investment in Alternergy Holdings Corp. The other GSIS officials were Executive Vice Presidents Michael Praxedes and Jason Teng, Vice Presidents Aaron Samuel Chan and Mary Abigail Cruz-Francisco, officer Jaime Leon Warren, and acting officer Alfredo Pablo.
The six-month suspension was intended to prevent those accused from influencing the investigation. The suspension was lifted in September after the anti-graft body determined there were “insufficient grounds” to believe the officials’ continued stay in office would affect the inquiry.