In response to several issues raised in today's news items pertaining to Commission on Audit findings on alleged lapses in corporate bonds investments, we issue the following clarification:
PhilHealth's investments in corporate bonds are all rated Triple "A" in strict compliance to Republic Act 10606 or the National Health Insurance Act of 2013. Triple "A" is the highest credit rating conferred to long term investments and obligations of the highest quality; and virtually carries no risks.
The minimum requirement for registration of securities with the SEC is only the submission of a preliminary prospectus and not the notarized prospectus as provided for in Securities Regulation Code (SRC) Rule 8 and 12.
PhilHealth has secured notarized prospectuses from the six of them while the remaining unnotarized prospectus considered official for the said Bond Issuance can be found in the website of the Philippine Dealing System.
The unaudited financial statements cited by COA were obtained from secondary financial market data source which publishes audited financial statements of listed corporate bonds and securities.
Considering that the said bond is a publicly listed company, all material reports such as credit ratings containing public disclosure of every material fact or event that occurs that would reasonably be expected to affect investor's decisions are disclosed with the Securities and Exchange Commission. It is therefore public knowledge that the bond cited by COA is a blue chip company and rated Triple "A".
The negative list which restricts investments in coal and oil was approved by the PhilHealth Board only in 2018. PhilHealth purchased the said bonds in February 2014. PhilHealth will no longer renew the said investment when it expires on 2021.
These bonds comprising less than 1% (or 0.67%) of total investments were offered to PhilHealth at an attractive yield of 150 basis points over comparable government securities. These continuously generated higher returns for PhilHealth.
PhilHealth was certified as public health workers in 1999. The Notices of disallowance on benefits as Public Health Workers by the COA are still under consideration by the Supreme Court.
This issue was substantially discussed in previous press statements. We defer making further statements on the matter. (END)
