Hontiveros Unmasks GSIS’s Reckless Gamble with Public Servants’ Futures

By Louis ‘Barok‘ C. Biraogo — August 7, 2025

THE Government Service Insurance System (GSIS), entrusted with the life savings of millions of public servants, has squandered ₱1 billion on a reckless gamble in DigiPlus Interactive Corp., an online gambling platform, watching its value crash by nearly 80%. Under suspended President Jose Arnulfo “Wick” Veloso, this fiasco—paired with a ₱1.45 billion Alternergy debacle—reveals a cesspool of incompetence, potential corruption, and betrayal of public trust. Who greenlit this disaster? Who pocketed the profits? The answers could topple GSIS’s leadership and spark a national reckoning.

The Scandal Exposed: Pension Funds Gambled, Trust Shattered

The ₱1 billion DigiPlus investment, snapped up at ₱65.30 per share only to crater to ₱13.68, isn’t just a financial blunder—it’s a gut-punch to every teacher, clerk, and cop relying on GSIS for retirement. RA 8291 mandates GSIS to act as a “prudent trustee,” yet Veloso’s team funneled pension funds into a volatile online casino operator, a sector barred by GSIS’s own ESG policies and morally toxic given government employees’ gambling ban. Senator Risa Hontiveros called it out: “The pension of public servants is not a chip in a casino.”

This isn’t an isolated misstep. The DigiPlus catastrophe echoes the ₱1.45 billion Alternergy deal, where GSIS bypassed board approvals for unlisted, high-risk shares, and earlier losses on Del Monte Pacific. These aren’t accidents—they’re a playbook of systemic recklessness, bleeding pension funds dry while public servants face a precarious future. The hypocrisy stings: GSIS members are forbidden from gambling, yet their savings were wagered on BingoPlus. Who profits when pensioners lose?

Legal Bloodhunt: Unmasking GSIS’s Violations

The DigiPlus and Alternergy deals violate a slew of laws and policies, exposing GSIS officials to severe consequences.

RA 8291: Fiduciary Duty Betrayed

Republic Act No. 8291, Section 36, demands GSIS invest with “the diligence of a prudent trustee,” prioritizing safety and GSIS v. Court of Appeals (G.R. No. 128471, March 6, 1998) sets a high bar for fiduciary care. DigiPlus, with a measly ₱8.7 billion market cap (below GSIS’s ₱15 billion threshold), a 184% debt-to-equity ratio, and a ₱1.3 billion net loss in 2024, is a textbook imprudent bet. GSIS v. Court of Appeals brands such unauthorized investments ultra vires, making officers personally liable for the ₱660 million DigiPlus loss. The Alternergy deal, lacking approvals from the Assets and Liabilities Committee (ALCO), Risk Oversight Committee (ROC), and GSIS Board, violates Section 45’s governance rules.

RA 3019: Graft and Undue Injury

Republic Act No. 3019, Section 3(e), prohibits causing “undue injury” to the government or giving “unwarranted benefits” through bad faith or negligence. The ₱660 million DigiPlus loss and ₱1.45 billion Alternergy exposure scream injury to pensioners. Section 4 flags potential kickbacks, especially with Veloso’s prior role as an independent director of DFNN Inc., DigiPlus’s parent, until 2023—a conflict under RA 6713. Was Veloso’s past cozying up to DFNN a factor? The Ombudsman needs to follow the money.

GSIS Policies: Rules Ignored

GSIS’s 2018 Investment Policy Manual bans gambling investments under ESG exclusions and requires board oversight for deals above ₱1.5 billion. DigiPlus, with over 90% of revenue from e-games, is a clear violation. Alternergy’s unlisted shares, bought without committee endorsements or COA clearance, breach PD 1445 §128. This isn’t oversight—it’s defiance of internal controls.

Ombudsman’s Hammer: Suspension Justified

The Ombudsman’s six-month suspension of Veloso and six officials over Alternergy, authorized by RA 6770 and backed by Corona v. United Harbor Pilots Association of the Philippines (G.R. No. 111953, December 12, 1997), stands on “strong evidence” of grave misconduct. Bypassing approvals and ignoring market-cap rules justify the measure. The DigiPlus probe could escalate this to dismissal or worse.

Ethical Inferno: Hypocrisy and Conflicts Ablaze

GSIS’s fiduciary duty, cemented in Public Investors v. GSIS, demands loyalty and prudence. Investing in DigiPlus, a speculative gambling stock, while members face gambling bans, is a grotesque double standard. RA 6713, Section 7, bans officials from financial interests in transactions they approve. Veloso’s DFNN ties raise a glaring conflict—did he push DigiPlus to favor old allies? The lack of transparency—no board minutes, no COA clearance—torches public trust. Pensioners deserve accountability, not betrayal.

Criminal and Political Reckoning: Who Falls Next?

Prosecution Blueprint

The ₱2.11 billion combined losses open multiple legal fronts:

Plunder (RA 7080): If kickbacks or ill-gotten wealth exceed ₱50 million, Veloso and others face life imprisonment under RA 7080. Estrada v. Sandiganbayan (G.R. No. 148560, November 19, 2001) confirms plunder via a pattern of overt acts.
Securities Fraud (SRC §26): Buying DigiPlus at a peak ₱65.30, followed by a crash, suggests insider trading risks. SEC v. Interport Resources (G.R. No. 135808, 2008) deems speculative fiduciary investments presumptively reckless.
Malversation (RPC Art. 217): Unauthorized investments could trigger 10-40 years’ imprisonment under Article 217.

Prosecutors must subpoena GSIS board minutes, COA audit reports, and PAGCOR licenses to trace commissions or shell companies.

Senate Showdown

Senators Hontiveros and Tulfo’s probe, led by the Committee on Games and Amusement, could be explosive. They should demand:

Board Minutes: To pinpoint who authorized these deals.
COA Audits: To confirm missing approvals.
PAGCOR Licenses: To probe DigiPlus’s compliance and bribery risks under RA 3019.
Stock-Trading Records: To detect insider trading by GSIS or DigiPlus affiliates, like Rep. Albee Benitez.

Tulfo’s proposed bill to criminalize imprudent GFI investments (6-12 years’ imprisonment) could reshape pension governance. The Department of Finance’s review may tighten GSIS’s leash.

Call to Arms: Demand Justice Now

This scandal screams for accountability. Track Senate hearings for bombshell revelations. Demand Veloso’s resignation and those of complicit board members. Pensioners’ futures aren’t slot machine fodder—GSIS must honor its fiduciary duty. The Ombudsman and Senate must act fast to restore trust and deliver justice. Who’s next to face the axe? Stay vigilant.

Key Citations

Laws and Republic Acts:

RA 8291 (GSIS Act): Mandates prudent investment (Section 36) and governance (Section 45).
RA 3019 (Anti-Graft and Corrupt Practices Act): Prohibits undue injury (Section 3(e)) and kickbacks (Section 4).
RA 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees): Bans conflicts of interest (Section 7).
RA 6770 (Ombudsman Act): Authorizes preventive suspension.
PD 1445 (Auditing Code): Requires COA approval (Section 128).
RA 7080 (Plunder): Covers ill-gotten wealth over ₱50 million.

Supreme Court Cases:

GSIS v. Court of Appeals (G.R. No. 128471, March 6, 1998): Fiduciary duty standard and Ultra vires investments.
Corona v. United Harbor Pilots Association of the Philippines (G.R. No. 111953, December 12, 1997): Suspension for misconduct.
Estrada v. Sandiganbayan (G.R. No. 148560, November 19, 2001): Plunder via overt acts.
SEC v. Interport Resources (G.R. No. 135808, 2008): Imprudent fiduciary investments.

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