AS four of the country’s top government financial institutions (GFIs) committed to invest the seed money for the creation of a sovereign wealth fund (SWF), the House Committee on Banks and Financial Intermediaries on Tuesday approved in principle the establishment of the Maharlika Wealth Fund.
The House Committee on Banks and Financial Intermediaries, chaired by Rep. Irwin C. Tieng, has created a technical working group to insert all the amendments for final approval this week. The committee has also set another hearing on Thursday also for approval of the bill’s committee report.
House Bill 6398, filed by Speaker Martin G. Romualdez, called for the establishment of the Maharlika Wealth Fund, patterned after the SWF of other countries, to maximize the profitability of investible government assets for the benefit of all Filipinos.
Other authors of the measure are House Majority Leader Manuel Jose “Mannix” M. Dalipe, senior Deputy Majority Leader Ferdinand Alexander A. Marcos, Tingog party-list Reps. Yedda Marie K. Romualdez and Jude A. Acidre, and Marikina City Rep. Stella Luz A. Quimbo.
Government Service Insurance System (GSIS) President and General Manager Jose “Wick” Veloso said, “we are very supportive of this bill and we have committed P125 billion to be able to jumpstart the incorporation and help set in motion the principles of the sovereign wealth fund.”
DBP President Emmanuel Herbosa, SSS President and CEO Michael Regino, and Land Bank of the Philippines President and CEO Cecilia Borromeo, likewise informed the committee that they support the proposed MWF.
Under the bill, the four GFIs—to be known as the founding GFIs—are mandated to invest equity with a combined total of P250 billion to start up the fund.
GSIS will provide an initial investment of P125 billion, SSS and LBP will give P50 billion each, and the DBP, P25 billion.
The Speaker earlier explained that the creation of MWF will provide an “opportunity to ensure their respective funds’ optimal asset allocation as well as ensure that resources are efficiently channeled to investments that will provide the most value not only to the participating GFIs but also to the country.”
In seeking approval of the measure, Quimbo, for her part, said the MWF—managed professionally and guided by the principles of good governance, transparency, and accountability—will yield the best return for the investment, providing the government with additional resources to address the country’s pressing problems.
For his part, Acidre noted that viewed in the context of the recent financial crisis, the Russia-Ukraine conflict, and the pandemic, the impact of sovereign wealth fund employed by many economies has been notably positive.
“This representation earnestly asks this committee for the speedy passage of this bill,” Acidre added.
House Ways and Means Committee Chairperson Joey Salceda said his panel has no objections to the provisions on tax exemption under HB 6398 as long as they would inure to the benefit of the MWF.
In filing the bill, Romualdez said it would help achieve the objectives of the Agenda for Prosperity and the 8-point socioeconomic roadmap of President Ferdinand “Bongbong” Marcos Jr.
The Speaker cited Singapore and Indonesia as countries that have successfully used their sovereign wealth funds.
He said Singapore’s SWFs provide the financial means for the city-state “to manage its foreign reserves, defend itself and protect its sovereignty without compromising its domestic program, and augment its land-limited economic space with global investments.”
Image credits: congress.gov.ph