AN OPPOSITION senator on Tuesday said the proposal to establish a sovereign wealth fund (SWF) is counterproductive, noting that it goes against the nation’s economic agenda.
“An SWF is meant to come from the excess funds we just don’t have, as seen by our trillions-worth of debt. We don’t need an SWF and we clearly can’t afford it anyway,” Senator Ana Theresia “Risa” N. Hontiveros-Baraquel said in a statement in a mix of English and Filipino.
“Our urgent priorities (to address the current crisis) must come first,” she added. “Just like the misplaced confidential funds, an SWF is an unnecessary and unjustified move.”
Several other senators, mostly allied with the administration of President Ferdinand R. Marcos, Jr., also expressed reservations on Monday on the bill filed in the House of Representatives seeking to create a sovereign wealth fund.
The measure was filed by several congressmen led by House Speaker Ferdinand Martin G. Romualdez, a cousin of Mr. Marcos.
The proposed Maharlika Wealth Fund will make investments by utilizing funds from the Government Service Insurance System (GSIS), the Social Security System (SSS), Land Bank of the Philippines and Development Bank of the Philippines.
Sought for comment on whether the government can arbitrarily access GSIS and SSS funds to invest elsewhere or should there be consent of the members, Senate Majority Leader Emmanuel Joel J. Villanueva said while a sovereign wealth fund “is good in principle, there should be more discussions on its sources of funds and its management.”
He said there is a need to protect “the retirement funds and other benefits of ordinary workers, who are already struggling from high prices of basic goods and are bracing for the impending global recession.”
Senator Juan Edgardo M. Angara also said, “Accessing contributions of pension funds would be a ticklish issue and may encounter some obstacles; best to access investible funds and use dormant government assets (or those with high potential upsides like real properties abroad) as part of the equity of the fund.”
The sovereign wealth fund will get an initial investment of P250 billion from the state pension funds and banks, with GSIS committing to provide half.
GSIS President and General Manager Jose Arnulfo “Wick” A. Veloso on Tuesday said he expects the Maharlika Wealth fund to not only “allow us to get returns but also to have a contribution to nation-building.”
“We will be there to make sure that this will be invested properly,” he said in a statement in a mix of English and Filipino.
“There are various layers of transparency to make sure that the funds are protected and invested properly, and we are going to make sure the public is going to be made aware,” Mr. Veloso said.
House Bill 6398, filed and passed on first reading last week, requires for the fund to be used to invest on a strategic and commercial basis to promote fiscal stability for economic development and strengthen top-performing government financial institutions through additional investment platforms that will help attain the national government’s priority plans.
There is no counterpart bill filed in the Senate.
Senator Joseph Victor or “JV” Ejercito, who filed a similar bill in a previous Congress, said his past proposal did not include GSIS and SSS funds for the sovereign wealth fund investment.
Mr. Ejercito said he is “apprehensive to touch pension funds” because of the problems experienced in the past with military funds.
Ms. Hontiveros vowed to bring up her concerns “on the Senate floor at the proper time.”
“For now,” she added, “this so-called Maharlika fund is setting off many alarm bells. Long-term consequences will be felt if we establish a sovereign wealth fund prematurely.” — Alyssa Nicole O. Tan