The Philippines' biggest pension fund is to invest overseas for the first time and has allocated about $1bn - or 10 per cent of its assets - to international investments as it struggles to boost returns in a low-interest domestic environment.

The move by the Government Service Insurance System, the pension fund for 1.4m state workers, highlights the challenges facing fund managers in the Philippines as yields on government debt ease in the wake of higher tax revenues and lower budget deficits. The benchmark 91-day Treasury bill rate is down to an all-time low of 2.86 per cent.