Senate‘s Maharlika bill allows GSIS, SSS to invest in sovereign wealth —Risa

State pension institutions may still invest in the Maharlika Investment Fund (MIF) under the Senate version of the measure even after their removal as mandatory sources of the sovereign wealth measure, Senator Risa Hontiveros said on Monday.

During her interpellation, Hontiveros pointed to what she called a "backdoor provision" in Senate Bill No. 2020 which provides that “other government financial institutions government-owned and -controlled corporations may invest into the MIF, subject to their respective investment and risk management strategies and approval of their respective boards.”

The Social Security System (SSS) and Government Service Insurance System (GSIS) are both GOCCs. “Pagkatapos naramdaman ang galit ng tao at nawala ang probisyon ukol sa SSS at GSIS Funds sa bersyon ng House of Representatives, ay nagbubukas tayo ng backdoor sa bersyon ng Senado,” Hontiveros said.

(After they felt the public opposition and the provision on SSS and GSIS funds were removed, we opened a backdoor in the version of the Senate.)

She said that the backdoor would work if the GSIS board would change its investment strategy and "gamble" the over a trillion-peso fund of the GSIS in the MIF.

Hontiveros expressed concern over the provision, saying the board members of the GSIS and SSS are presidential appointees.

She mentioned a video supposedly taken last April in which GSIS president and general manager Wick Veloso was reportedly saying that they are reviewing and planning to change the investment strategies of the GSIS.

Responding to Hontiveros’ concern, Senator Mark Villar, sponsor of the measure, vouched for the competence of presidential appointees, specifically those who are managing the GSIS funds.

“I will not comment on the strategies of the GSIS, but I could speak for the competence of those managing GSIS. Kung kinakabahan tayo sa ating appointees, ako, di ako kinakabahan,” Villar said.

(If we're wary of our appointees, I am not.)

Hontiveros asked Villar if he could assure the members of the SSS and GSIS that the Senate version of the bill would not open a “Pandora’s box.”

Villar, in response, said there’s nothing in the bill that requires the state pension institutions to invest in the MIF but there’s also no provision in the bill which prohibits them from doing so.

“It is something that they are not prohibited from doing, which I don’t think they should be prohibited from making any kind of investment that may be beneficial to their members,” he added.

He assured the government institutions that their investments will go through the same process as the other investors.

Still, Hontiveros said she was not completely convinced that state pension institutions should not be prohibited from investing in the MIF as these funds are “hard-earned pension money” and there are some best-managed sovereign funds that are recently losing hundreds of billions.

Villar said SSS and GSIS had very strict mandates when it comes to their investments, adding that there will be actuarial experts who will decide on how and where they will invest the funds.

Earlier in the day, Senate Majority Leader Joel Villanueva and Senator Imee Marcos expressed reservations over the use of pension funds as seed capital of the MIF. While there’s a push to pass the measure before the adjournment of the session on June 2, Marcos and Senator Francis Escudero said the MIF bill still contains vague provisions and it still has no final form. —NB, GMA Integrated News