CalPERS' Consultant Recommends Investing In Philippines

The recommendation was made in a draft report by consultant Wilshire Associates after it gave the country a passing score on its evaluation of the political and economic atmosphere there, according to channelnewsasia.com. No final decision has been made on the move, however.

Also recommended for approval by Wilshire were 19 countries that met its emerging markets investment requirements. These include Argentina, Sri Lanka, Thailand and Turkey, according to Reuters. These four had failed to make the list last year, with Argentina and Turkey being granted “cure periods” to raise their scores to acceptable levels.

Philippine officials had been worried that the pension giant would remove its $85 million in investments after a downgrading of the country’s credit rating. Officials from CalPERS and the South Asian government had met to discuss the investment in the country, with Philippine officials also expressing frustration over the inclusion of labor issues in CalPERS decision-making criteria for investment (See Philippine Officals Concerned About CalPERS’ Investment after Credit Rating Downgrade ).

Wilshire evaluated the country using seven “country” and “market” factors, according to the news channel, which included political stability, transparency, and labor practices.

Similar concerns were raised in 2004, when CalPERS threatened to sell Philippine stocks because the country had failed to make the grade on the fund’s scorecard for market transparency and political openness in emerging markets (See  CalPERS Again Postpones Philippines Decision ). Wilshire Consulting had recommended that it be stricken from the investment list earlier in the year. During a one-year “cure period”, the Philippines was  supposed to correct deficiencies in its system to qualify permanently as an investment site, but it still fell below Wilshire’s cutoff point of two points, scoring a 1.86.  Wilshire had given the country low scores in areas of market practices and business conduct although the Philippine government argued that Wilshire based its recommendation on inaccurate data, and expressed concerns that the scores should have been higher. The country was ultimately decided to be investable, however, after after the efforts of Wilshire Consulting and Oxford Analytica forced the Philippine government to change a law by Executive order that strengthened investors’ rights.

Also Tuesday, claims by CalPERS that it has found no investments in Sudan has prompted complaints from US Representative Barbara Lee (D-California) that the pension giant is dismissing concerns about supporting genocide, according to the Associated Press. Although CalPERS claims that no Sudanese investments exist among 1,869 companies in which it has a stake, Lee is asserting that only 11% of companies responded to a CalPERS survey on the subject. Lee is saying that the pension fund’s efforts to find out more about its underlying investments were not adequate, a spokesman for the congresswoman told the AP.