MANILA – Former president and House Senior Deputy Speaker Gloria Macapagal-Arroyo on Monday defended the House measure proposing the establishment of a sovereign wealth fund, called Maharlika Wealth Fund, amid qualms raised by several sectors over the possible depletion of pension funds in the event that the investments should fail.
Arroyo stressed that sovereign wealth funds are not new, citing Singapore’s Temasek Holdings that has been in existence since 1974, and the Government of Singapore Investment Corporation that is in operation since 1981.
Besides, she said that the government always has funds to invest.
“The success of any fund, sovereign or private, lies in the quality of its management. In the current version of the Maharlika Wealth Fund, the President of the Philippines chairs its governing Board. This is a powerful statement that the highest official of the land will hold himself as ultimately accountable to the Filipino people for the performance of the Fund,” she said in a statement.
“Once the fund is operational, the President will also be able to count on advice from the Department of Finance, the nation’s steward of sound fiscal policy. Historically, the Philippines has had a good track record insofar as its Finance Secretaries are concerned, so this is a valuable resource that our country can count on as available,” she added.
House Bill 6398, introduced on Nov. 28, seeks to establish the Maharlika Wealth Fund (MWF), patterned after the successful sovereign wealth funds all over the world.
Under the proposal, the Government Service Insurance System, Social Security System, Land Bank of the Philippines and the Development Bank of the Philippines will invest equity with a combined total of PHP250 billion to start up the fund.
In the case of the government financial institutions, Arroyo noted that these would invest the funds anyway, “in order, ideally, to maximize returns and generate funds that contribute to or supplement the financial resources at the disposal of the government for programs and projects that benefit the Filipino people.”
Furthermore, she said the MWF would have an established mechanism for future contributions, and would benefit from a centralized, specialized and accountable management.
“The fund will in essence be housed in what can be thought of as a special purpose vehicle, and thus its operations can more transparently be observed, tracked, and monitored, not just domestically, but by the international financial community as well,” Arroyo said.
She also pointed out that even former Senator Paolo Benigno “Bam” Aquino filed a bill to create such a fund in 2016.
Senior Deputy Majority Leader Sandro Marcos also pointed out as much.
“Well, if you think about it, this isn't a new idea. Secretary (Benjamin) Diokno already said they were looking at it during the time of [President Rodrigo] Duterte. If I'm not mistaken, former Senator Bam Aquino filed a bill in 2016 trying to do the same thing," Marcos told House reporters following the Bicameral Conference Committee meeting on the 2023 national budget on Monday.
“This is something that has been in the works, or something that's been pushed by not even this administration, but past administrations," he added.
He likewise said that while the current version mandates the President of the Republic -- in this case his father, President Ferdinand R. Marcos Jr. -- to be the chair of the 15-man Board, it just so happens that the proposal was re-introduced at the start of the term of the Marcos administration.
“So, we have six years to hopefully be able to craft a piece of legislation that will see out and go beyond the President’s term," he noted.
"Yes, the President will be chairman of the board, but you have to look at it beyond this administration. This is not something (just) for the next six years, this is something that will keep on going," Marcos said.
HB 6398 was authored by Speaker Martin Romualdez, Senior Deputy Majority Leader Marcos, Accounts panel chairperson Yedda Romualdez, Majority Leader Mannix Dalipe, Deputy Majority Leader Jude Acidre, and Appropriations panel vice chairperson Stella Quimbo.
Romualdez said earlier that the creation of the MWF would 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.”
He also said that having the MWF will help achieve the objectives of Marcos’ “Agenda for Prosperity” and the eight-point socioeconomic roadmap.
“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. (PNA)