The Social Security System's stock portfolio is down ₱39.994 billion on paper, and the Commission on Audit says one reason is that nobody set a limit on how much loss was too much. In its 2025 annual audit of the SSS, COA attributed the unrealized equity losses to "a lack of formal stop-loss thresholds" that would trigger corrective action to protect the Investment Reserve Fund (IRF), according to Ted Cordero of GMA News (Oct. 16).
The numbers
Per GMA's account of the audit, unrealized equity losses on the SSS's financial assets reached ₱39.994 billion, up from ₱11.6 billion in 2021, a 245% increase. That equals a 32.93% decline from the original acquisition cost of ₱121.467 billion. COA noted the rise happened despite SSC Resolution No. 553-s.2022 and international social security frameworks, which the auditors cited as guidance on managing such risk.
A stop-loss threshold is a pre-set point at which an investor must review, cut or otherwise act on a losing position. According to COA's reported finding, the SSS had none formally in place, so the losses grew without a built-in trigger for anyone to act.
SSS: 'Not mismanagement'
The SSS responded, as reported by GMA, that the ₱39.994 billion is a "non-cash, market-driven accounting adjustment" reflecting temporary price swings, "not mismanagement or policy deviation." It explained that a paper loss is an unrealized drop in value, and no cash is lost unless an asset is sold below cost. Member contributions are not affected, it said, and prices may recover over time. The agency added that it invests only in firms with strong earnings and stable performance, that its portfolio is diversified, and that dividends add an estimated ₱9 billion to its net income yearly. Equity dividends and realized gains totaled ₱30.132 billion from 2018 to 2025, per the GMA article's account of COA data.
The SSS also pointed to payouts: benefit payments from January to June 2026 rose 19% to ₱173.45 billion from ₱145.73 billion a year earlier, and it released ₱7.4 billion in additional benefits to 4.1 million pensioners under the second tranche of its Pension Reform Program.
Analysis: what the answer doesn't answer
This section is analysis, not reporting. The SSS's defense is technically sound: paper losses are not realized losses. But COA's point was not that money has vanished; it was that the fund had no formal rule for when a paper loss becomes a problem. "Prices may recover" is a hope, not a threshold. An unrealized loss of nearly a third of cost, on a fund that pays pensions, is the kind of number a stop-loss policy exists to catch, and the SSS's response as reported does not say whether it will adopt one. The reported response also does not say which holdings account for the losses; GMA's article names no specific investments.
Context
The SSS is a government-owned and -controlled corporation that invests member contributions through the IRF to fund future benefits. Pulpulitiko has been tracking COA's 2025 audit season, which has produced findings across agencies from the Philippine Sports Commission to the peace office. Unlike those, the SSS finding concerns not missing paperwork but investment risk governance.
Sources
- Ted Cordero, "COA flags SSS P40-B 'paper loss' in equity investments," GMA News, Oct. 16, 2026 — https://www.gmanetwork.com/news/money/companies/1006110/coa-flags-sss-p40-b-paper-loss-in-equity-investments/story/
- "CoA flags P40-B SSS paper losses," BusinessWorld (headline only) — https://www.magzter.com/stories/newspaper/Business-World-Philippines/COA-FLAGS-P40B-SSS-PAPER-LOSSES