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GSIS. Government Service Insurance System president and general manager Jose Arnulfo Veloso.
GSIS Facebook
Former energy secretary Vicente Perez's renewable energy firm Alternergy defends the transaction saying it was above board, and that the GSIS will get a 56% rate of return on its investment
MANILA, Philippines – The Ombudsman has preventively suspended Government Service Insurance System (GSIS) chief Jose Arnulfo “Wick” Veloso and six other officials over the state corporation’s purchase of 100 million shares of renewable energy pioneer Alternergy Holdings Corporation worth P1.45 billion.
In a July 11 order, Ombudsman Samuel Martires upheld the recommendation to preventively suspend 7 GSIS officials for “gross misconduct, gross neglect of duty, and violation of reasonable office rules and regulations” for the Alternergy transaction.
Martires said the share subsription deal, signed by GSIS and Alternergy Holdings on November 7, 2023, violated the GSIS’ investment policy guidelines and was done without the approval of the GSIS Board of Trustees.
Ombudsman investigators had conducted an investigation into the transaction based on an “anonymous complainant,” and came up on January 30 with their recommendation to preventively suspend the officials and pursue an administrative case.
The six other GSIS officials preventively suspended are:
- Michael M. Praxedes, executive vice president
- Jason C. Teng, executive vice president
- Aaron Samuel C. Chan, vice president
- Mary Abigail V. Cruz-Francisco, vice president
- Jaime Leon K. Warren, officer II
- Alfredo S.S. Pablo, acting officer IV
The Ombudsman cited the following grounds for its ruling:
“(1) the Perpetual Preferred Shares were not listed with the PSE (Philippine Stock Exchange) on the dates of the execution of the agreement and the payment of the subscription;
“(2) the investment was non-compliant with the Minimum Market Capitalization and exceeded the Free Float Market Capitalization Cap;
“(3) the subject preferred shares were purshased without the necessary indorsement from the [GSIS] Assets and Liabilities Committee (ALCO) and the Risk Oversight Committee (ROC) for the approval of the Board of Trustees (BOT).”
Veloso, in a statement sent on Tuesday to the TV5 business news show, Money Talks, said, “I am holding off any media engagement until my counter-affidavit has been acknowledged by the Omubdsman.”
Veloso is a former president and CEO of Philippine National Bank, and also served as CEO of commercial bank HSBC Philippines where he worked for 23 years. President Ferdinand Marcos Jr. appointed him to the GSIS in June 2022.
Alternergy’s defense
Alternergy, founded by former energy secretary Vicente Perez, defended the transaction by saying it was “fully documented, transparent and above board,” and that the GSIS will get a 56% rate of return on its investment.
“Alternergy has already remitted the first Perpetual Preferred Shares (PPS) coupon totaling P118 million to GSIS in December 2024. This coupon is payable every year and effectively gives GSIS a 56% return on its investment in the PPS, totaling P826 million, over 7 years,” the company said in a disclosure to the PSE on Tuesday. “In addition, funds used to subscribe to the PPS amounting to P1.45 billion will be returned to GSIS in full at the end of the investment period.”
Alternergy said GSIS’ investment was in support of the government’s goal of energy transition, noting that the “proceeds of the investment were used to accelerate the development and construction of Alternergy’s Tanay and Alabat wind projects.”
“We are confident that all our actions adhere to the highest standards of governance. Maintaining stakeholder trust is at the core of everything we do,” said Alternergy president Gerry Magbanua, adding that it was ready to cooperate with any review of the transaction.
In his column on Tuesday for Rappler, veteran business editor Val Villanueva said that “a misstep of this scale, compounded by potential legal liability, threatens to undermine public trust in the country’s pension system itself.”
“The implications of this scandal are far-reaching. The GSIS is one of the Philippines’ largest institutional investors, managing over P1.8 trillion in assets. The fund exists to provide retirement, disability, and life insurance benefits to government workers — such as schoolteachers, soldiers, police, healthcare workers — many of whom live on fixed incomes.
“If the P1.45 billion investment proves unrecoverable, this will represent a direct hit to the fund’s capital base and, more critically, a loss that the government may ultimately be forced to backstop with taxpayer funds,” he said.
Alternergy, in its July 22 statement, also said it has been able to show “consistent profitability and robust financial growth since its successful initial public offering in March 2023.” It posted 241% growth in net income from 2023 to 2024 (₱38 million to ₱129.6 million) and 60% revenue growth from 2023 to 2024 (₱171.5 million to ₱274.9 million.
Villanueva, however, in his column said Alternergy’s financials have deteriorated, citing the firm’s revenue drop from P1.2 billion in June 2022 to negative P607 million in March 2025. – with reports from Lian Buan/Rappler.com