The controversy, unfortunately, has spilled over to GSIS president and general manager Wick Veloso, who is now serving a suspension ordered by the previous Ombudsman.
What is being lost in the noise is the fact that the transaction itself stands on strong financial, legal, and strategic footing.
The investment is not only legitimate and well-structured, but also represents a prudent allocation of the resources of the state pension fund into an asset that offers stable returns, manageable risk, and tangible benefits for the fund’s members and the country’s renewable energy ambitions.
Legitimacy beyond doubt
First, let’s strip away the insinuations and look at the facts. The preferred share issue was fully compliant with all Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE) requirements.
The securities were reviewed by regulators, approved, and listed on the PSE in March 2024. The process was transparent, thorough, and subjected to rigorous legal scrutiny by two respected law firms—Romulo Law and Martinez Vergara Gonzalez Sociedad.
All requisite approvals were obtained before the transaction, and the deal was disclosed to the market in accordance with securities laws. The preferred shares enjoy priority in distribution and liquidation over common shares, carry an 8-percent coupon with a step-up in the seventh year, and are redeemable starting the fifth year. These features place them squarely in the low-to-moderate risk category of investment instruments.
Attractive risk–return profile
These preferred shares are not speculative plays. They are listed securities, meaning they are liquid and tradable on the open market. GSIS is guaranteed a fixed annual dividend of P118 million for seven years (totaling P826 million over the period) plus the full return of its P1.45-billion principal at maturity.
This translates to total proceeds of P2.2 billion, implying a 56-percent return over seven years, or an impressive average annual yield well above what government bonds and other low-risk fixed-income instruments currently offer.
Strategic fit with GSIS’s mandate
GSIS’s core mission is to preserve and grow the retirement savings of government workers. That means balancing safety with sufficient returns to meet long-term obligations.
By investing in the preferred shares of Alternergy — a firm led by former Energy Sec. Vince Perez — GSIS not only secures an attractive fixed-income stream but also channels funds into the strong growth prospects of the renewable energy sector.
Alternergy’s strong financial performance
Critics also overlook the issuer’s fundamentals. Alternergy has shown robust growth: net income jumped 241 percent from P38 million in fiscal year June 2023 to P129.6 million in fiscal year June 2024. For the nine months ending March 31, 2025, it posted P109 million in net income. Revenues rose 60 percent in 2024 to P274.9 million and climbed a further 43 percent in the first nine months of 2025.
This is not a distressed issuer. This is a growth-stage renewable energy company with healthy cash flow and solid debt-servicing capacity, as shown by its positive interest coverage ratio of 2.38 times.
Not a ‘backdoor deal’
Some have tried to frame the investment as a “backdoor deal.” The timeline tells a different story. The decision to explore preferred shares financing came only after Alternergy’s win in the Department of Energy’s green energy auction in July 2023, months after its IPO in March 2023. The subscription agreement with GSIS was executed in November 2023 after four months of due diligence and regulatory compliance.
Moreover, the securities are listed on the PSE, meaning the transaction is subject to the same disclosure and trading rules as any other publicly traded security. This is the opposite of a shadowy, under-the-table arrangement.
Why Veloso’s actions were justified
Veloso’s role in this investment has been cast in a negative light without sufficient basis. The Ombudsman’s suspension order is preventive—intended to preserve the integrity of an ongoing inquiry—not a finding of guilt. Under Philippine law, all parties are presumed innocent until proven otherwise.
By any reasonable standard, Veloso acted within the bounds of his mandate: identifying and executing investments that balance security and return for GSIS members.
Broader implications for public fund management
This episode raises a larger question: How should public funds like GSIS position themselves in an evolving investment landscape? Sticking exclusively to ultra-safe, low-yield instruments may avoid headlines but risks underperforming against actuarial needs. Conversely, chasing yield without regard for risk can endanger the fund.
The Alternergy preferred shares sit in the sweet spot: they are secured, dividend-paying, tradable, and linked to a growth sector with tangible assets. For a pension fund, such instruments can provide both stability and upside, especially in a portfolio balanced with other asset classes.
The danger of politicizing investments
The public sector suffers when investment decisions are politicized rather than assessed on their merits. If every strategic allocation is treated as suspect simply because it involves large sums or high-profile counterparties, the result will be a chilling effect on proactive fund management.
GSIS’s members—teachers, soldiers, civil servants—deserve a fund that seeks out opportunities like this, not one that retreats into passivity out of fear of public backlash. Preventive suspensions should not be mistaken for convictions, and sound transactions should not be tarnished by unrelated political storms.
Conclusion: a model for future deals
The GSIS–Alternergy preferred shares transaction is a case study in how a public pension fund can participate in nation-building while safeguarding members’ interests. It is fully compliant, legally sound, financially attractive, and strategically aligned. Far from being a questionable deal, it should be held up as a model for how government institutions can leverage capital markets to generate steady returns and support priority industries.
Veloso’s temporary absence should not obscure the fact that the deal itself is in the best interest of GSIS members. Once the legal process runs its course, public discourse should return to where it belongs: evaluating investments based on performance, risk management, and strategic fit—not on misplaced suspicion promoted by parties who may or may not want his job.
Senior Reporter
