Proposed Maharlika Investment Fund bill clears House panel
A measure that seeks to the create a sovereign wealth fund (SWF) to maximize the profitability of investible government assets for the benefit of all Filipinos cleared committee level at the House of Representatives on Thursday.
During the hearing on December 1, the House Committee on Banks and Financial Intermediaries approved and adopted the amendments proposed by the technical working group (TWG) on House Bill No. 6398, which seeks to establish the Maharlika Investment Fund.
The Government Service Insurance System (GSIS), the Social Security System (SSS), the Land Bank of the Philippines (Land Bank), the Development Bank of the Philippines (DBP), and the National Treasury will each contribute PHP125 billion, PHP50 billion, PHP50 billion, PHP25 billion, and PHP25 billion, respectively, to the fund’s initial funding.
Speaker Martin Romualdez, the bill’s author, said it is essential for the government to “improve investment opportunities, promote productivity-enhancing investments and ensure that the Philippines becomes an investment destination” to achieve the objectives of the Agenda for Prosperity and the eight-point socioeconomic roadmap of President Ferdinand R. Marcos Jr.
“Sovereign wealth funds are state-owned investment funds typically financed by a country’s surplus revenues or reserves. Governments invest these funds in an array of both real and financial assets to stabilize national budgets, create savings for their citizens, or promote economic development,” Romualdez said.
He claimed that the legislation would give the GSIS, SSS, Land Bank, and DBP the chance to ensure that their respective funds’ optimal asset allocation and that resources are effectively directed to investments that will yield the greatest returns for both the participating government financial institutions (GFIs) and the nation at large.
The TWG assured that it has put in place enough protections to guarantee that the fund will be appropriately managed and will provide returns to pension funds and government banks.
Albay Rep. Joey Salceda, head of the TWG, said among the safeguards include three layers of audit (internal, external and the Commission on Audit); as well as four layers of good corporate governance (in the board of directors, the advisory body, the risk management unit, and the congressional oversight committee).
“We imposed regular booking of losses and profits in the books, and annual reporting by the government financial institutions to their members or shareholders,” Salceda said.
He assured that there will be no shadow accounts or investments since multiple audit requirements, independent directors and the Treasurer of the Philippines, who will sit on the board, will ensure that.
Netizens, however, are not convinced. Particularly, they found it a cruel joke to consider designating the Philippine president as the chairperson of the Maharlika Wealth Fund Corporation (MWFC). The Marcos family has faced graft and corruption charges that date back to the administration the elder strongman.
Netizens were also indignant at the proposed GSIS and SSS funds and expressed fear that the Maharlika Investment Fund might suffer the same fate as the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB), The 1MDB scandal weaves a tangled tale of corruption, bribery, and money laundering in which the fund was systematically embezzled. Some have suggested to withdraw their contributions from SSS to show their indignation and avoid a possible financial fallout.
