MANILA – The country’s top-performing government financial institutions (GFIs) on Tuesday expressed their full support for House Bill 6398, which seeks the creation of a sovereign wealth fund (SWF).
HB 6398, primarily authored by Speaker Martin G. Romualdez, calls for the establishment of the Maharlika Wealth Fund (MWF), which would be patterned after the SWFs of other countries, to maximize the profitability of investible government assets for the benefit of all Filipinos.
During Tuesday's hearing of the House Committee on Banks and Financial Intermediaries on the proposed measure, representatives from the Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines (Land Bank), and the Development Bank of the Philippines (DBP) gave their unanimous backing for the creation of the MWF by committing to invest the seed money necessary to start it up.
“We are very supportive of this bill and we (GSIS) have committed PHP125 billion to be able to jumpstart the incorporation, and help set in motion the principles of the sovereign wealth fund,” GSIS President and General Manager Jose Veloso said.
DBP President Emmanuel Herbosa, SSS President and CEO Michael Regino and Land Bank President and CEO Cecilia Borromeo, likewise informed the committee that they fully support the proposed MWF.
Under the bill, the four GFIs -- which shall be collectively known as the founding GFIs -- are mandated to invest equity with a combined total of PHP250 billion to start up the fund.
GSIS will provide an initial investment of PHP125 billion, PHP50 billion for both SSS and LBP, and PHP25 billion from the DBP.
Meanwhile, House Ways and Means Committee chairperson and Albay 2nd District Rep. Joey Salceda said his panel has no objections to the provisions on tax exemptions under HB 6398, as long as these would redound to the benefit of the MWF.
In filing the bill, Romualdez 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.
HB 6398, he said, would give the GSIS, SSS, Land Bank and DBP the 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.
He cited the cases of Singapore and Indonesia 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.
As for Indonesia, it has attracted foreign investors to jointly capitalize its SWF to bring in much-needed investments in such sectors as transportation, including airports, supply chains, logistics, digital infrastructure, the green economy, healthcare services, the financial sector, technology and tourism, ultimately propelling the country’s growth.
“As the Philippines secures its place not only as the ‘Rising Star of Asia’ but as a real economic leader in the Asia Pacific, the creation of the MWF becomes imperative,” Romualdez said.
The other authors of the measure -- 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 -- agreed with Romualdez.
Quimbo said the MWF, which will be 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 have been notably positive." (PNA)