DESPITE the growing opposition, the economic managers of the Marcos Jr. administration are urging Congress to fast-track the passage of Maharlika Wealth Fund (MWF), which they claimed would lead to a more “prosperous” Philippines.
In a press briefing, Finance Secretary Benjamin E. Diokno said the world economic managers are backing the passage of the MWF, which they described as “long overdue.”
“We urge the immediate enactment of the bill creating the Maharlika Investments Corp. Let us not delay economic progress. Let us not deprive people of this opportunity for prosperity,” Diokno said Friday noon.
Diokno disclosed some of the amendments to the provisions of the current house bill seeking to create the MWF.
In particular, the finance chief revealed the new sources of seed fund for the MWF under the current version of the bill, which has excluded the mandatory contributions from state-run pension funds—the Social Security System (SSS) and the Government Service Insurance System (GSIS).
Diokno said two government financial institutions—the Land Bank of the Philippines and the Development Bank of the Philippines—will now contribute P50 billion each to the MWF.
The Bangko Sentral ng Pilipinas (BSP) shall also remit the entirety of its declared dividends to the MWF for the first two years of enactment of the country’s proposed sovereign wealth fund, Diokno added.
Diokno explained, however, that the BSP will only be required to contribute 50 percent of its declared dividends to the MWF starting from the third year to allow it to build up its capitalization to P250 billion. This means that 50 percent of the BSP’s declared dividends shall go to the national government, which in turn will be used to prop up the central bank’s capitalization.
Once the BSP’s capitalization reaches P250 billion, the Central Bank will now be mandated to contribute 100 percent of its declared dividends to the MWF, Diokno said.
Other sources of the MWF will be the Philippine Amusement Gaming Corp. (Pagcor) that will contribute at least 10 percent of its gross gaming revenues, general appropriations or supplemental appropriations from Congress, mining royalties under the proposed new fiscal regime, proceeds from the privatization of government assets and private borrowings, Diokno added.
“The bigger the contribution [to the MWF] the bigger their roles are in the fund. Based on Article 5 section 16 of the revised bill, the contributors to the fund shall be given seats in proportion to their investments,” he said.
‘Tempering’ objections
Diokno clarified that the SSS and GSIS were removed from mandatorily contributing to the MWF to “temper” the growing objections by the public.
Diokno pointed out that the SSS and GSIS may still opt to join the MWF should their respective fund managers deem it to be necessary.
“[It is] without prejudice for them to contribute later, should their respective boards approve their contributions,” he said.
The finance chief reiterated that the proposed MWF has all the necessary transparency and accountability mechanisms to ensure prudent use of the national government’s money.
“We economic managers of the Marcos Jr. administration strongly support the creation of the MWF as a vehicle to move forward the agenda for prosperity and achieve economic goals of the administration,” Diokno said.
“The establishment of a sovereign wealth fund is a tried and tested investment vehicle that has been used by governments both in the first world countries and in the developing countries to achieve their economic objectives,” Diokno added.