LEADERS of the House of Representatives and economic managers have agreed to remove the Government Service Insurance System (GSIS) and Social Security System (SSS) as fund contributors to the proposed Maharlika Wealth Fund (MWF) and instead utilize profits of the Bangko Sentral ng Pilipinas (BSP).
Marikina Rep. Stella Quimbo, one of the principal authors, made an announcement late Wednesday, following their meeting with economic managers amid the concerns of business groups and the public on the proposed law creating the P275-billion Maharlika Wealth Fund.
“This [Wednesday] morning, the House leaders led by Speaker Martin Romualdez met with the economic managers to reassess the Maharlika Fund bill as drafted by the economic managers. Based on our assessment of the proposed changes put forward by the economic team, we are amending the bill to change the fund sources, removing GSIS and SSS as fund contributors and instead utilize profits of the Bangko Sentral ng Pilipinas,” she said in a press conference.
Upon the Speaker’s instructions, Quimbo said the changes would be introduced into the bill on Friday.
Quimbo said the funds that the BSP will invest will also be determined at their Friday’s hearing.
“The discussions on the amendments shall be taken up by the Committee on Appropriations on Friday upon the instruction of Speaker Romualdez,” she said.
“The BSP is still computing it because it will come from dividends. But the ballpark figure is sufficiently large, meaning good enough to start an investment fund of this nature,” she said.
Quimbo said the purpose of the Maharlika Fund is to become an investment vehicle where existing surplus capital of the government can grow and reap benefits.
“It’s good we are holding a series of consultations on the bill; the apprehensions of our people, especially Filipino workers who make monthly contributions to GSIS and SSS, are addressed,” she added, partly in Filippino.
“Any surplus capital of government should be invested in projects with high returns. The people will also benefit from the investment profits of Maharlika, which can be felt through bigger budgets for government programs that address the needs of every Filipino,” Quimbo said.
As the House tackles the bill, Quimbo said lawmakers will put in place safety nets to ensure the success of this project.
Under House Bill 6398, GSIS, SSS, Land Bank, the Development Bank of the Philippines, and the national government are mandated to invest equity with a combined total of P270 billion to start up the fund.
GSIS will provide an initial investment of P125 billion, P50 billion for both the Social Security System and Land Bank of the Philippines, P25 billion from the Development Bank of the Philippines and P25 billion from the Treasury of the Philippines.
Under the bill, as a subsequent annual contribution to the fund, the BSP shall provide 50 percent of its annual dividends while Pagcor shall contribute at least 10 percent of gross gaming revenue streams created after the effectivity of this proposal.
The bill also said the Maharlika Wealth Fund, an independent fund, adheres to the principles of good governance, transparency and accountability. The fund shall be sourced from the investible funds of the country’s top-performing GFIs, the Treasury of the Philippines and Bangko Sentral ng Pilipinas.
The bill said the fund shall be used to invest on a strategic and commercial basis in a manner designed to promote fiscal stability for economic development, and strengthen the top performing GFIs through additional investment platforms that will help attain the national government’s priority plan.
The establishment of the Maharlika Wealth Fund was patterned after the sovereign wealth fund of other countries, to maximize the profitability of investible government assets.