CalPERS’ Staff to Urge Fund to Resume Philippine Investment

CalPERS’ staff will urge the giant U.S. pension fund to reverse a February decision to pull about $15 million in stock holdings out of the Philippines, a fund spokesman said Wednesday.

The staff move follows a review of the Philippines that showed the country meets the fund’s requirement that stock exchange transactions be settled within three days of the trade date.

CalPERS, the California Public Employees’ Retirement System, sparked controversy in February when it announced plans to sell assets in the Philippines, Thailand, Indonesia and Malaysia because those nations did not meet tough new fund investment standards, some involving human rights.

The move triggered fears in Asia that other large investors would follow CalPERS’ lead.

Soon after the decision, officials from the Philippines--which missed the cut for financial rather than human rights reasons--began pressing the fund to rethink the decision to divest.

Although CalPERS had earlier given Manila a low score for market liquidity and the openness of its markets, the gain in the efficiency of settlements, which was reported to CalPERS’ staff in April, bumped the country’s total score into the range of admissible investments, CalPERS spokesman Brad Pacheco said.

The staff recommendation will be put before the fund’s investment committee May 13. Pacheco said the staff did not anticipate recommending reinstatement for the other countries dropped.