House panel OKs Maharlika Investment Fund bill

A House committee on Thursday approved a recently filed bill that seeks to establish billions of pesos worth of sovereign wealth fund dubbed as Maharlika Investment Fund (MIF).

The House Committee on Banks and Financial Intermediaries approved House Bill 6398, whose authors include Speaker Martin Romualdez, via a voice vote two days after it was filed.

The bill aims to maximize investible state assets for improvement of social services. Under it, the MIF will get allocations from the following government financial institutions (GFIs):

• P125 billion from Government Service Insurance System
• P50 billion from Social Security System
• P50 billion from Land Bank of the Philippines
• P25 billion from the Development Bank of the Philippines and
• P25 billion from the National Treasury

The bill also mandates Bangko Sentral ng Pilipinas and Philippine Amusement and Gaming Corporation, among other government instrumentalities, to pitch to the MIF.

It also provides that “sums thereafter necessary for additional contributions of the national government will be included in the General Appropriations Act (GAA) or supplemental appropriations, as the case may be, subject to budget preparation process and authorization by Congress.”

The bill also authorizes the President to appoint two independent directors to the board of the Maharika Investments Corporation, which will operationalize the disbursement and management of the MIF.

In an earlier statement, Romualdez said his bill 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.

Daza wary

House Deputy Minority Leader Paul Daza, however, warned that the bill's provisions give the President too much control on where public funds should go.

"I am not persuaded. This will allow the President to manage a fund...[which are] the surplus, excesses from sale of large government assets. If we [still] get the funding [from] the GAA [for this], that already usurps the power of the purse of Congress. You know how it is, if the President said he wants a P50 billion wealth fund... I don’t want to give up our power of the purse," Daza said.

"We are on deficit spending, and it does not make sense that GAA will fund this. Let the GFIs do that. I’m sure it will be a major issue also for other members," he added.

In addition, Daza said independent board members should not be appointed by the President.

“If you are an appointee of the President, hindi ka makakapapalag. We need a safeguard here. A director appointed by the President is not independent,” Daza said.

This prompted other authors of the measure, Albay Representative Joey Salceda and Marikina Representative Stella Quimbo, to amend the bill to state that independent board members should either come from the private sector of great expertise or the academe.

Ironic

House Deputy Minority Leader France Castro, for her part, said it is ironic that GFIs like the GSIS and the SSS are very willing to pour in resources to MIF while refusing to grant additional benefits to its pensioners.

"If that is the case, maybe you can now fund the additional P1,000 pension for our elderly as promised by [former] President Duterte? The P1,000 pension increase was implemented in 2017, provided that another P1,000 will be subject to study kasi sabi niyo, clearly, hindi niyo kaya pondohan. Eh ito nga ang hinihingi ng ating mga 3.1 million seniors," Castro asked the SSS.

"But then, for this Maharlika Investment Fund, you can give P50 billion?"

SSS President Michael Regino responded by saying, “Hindi naman po ito isahan lang [na bigayan] (This won’t be given in one fell swoop.)

Castro, however, was not convinced.

"Ito po talaga ang hinanakit sa aking puso...puwede maglagay ng pera at risk for this pero hindi sa pension ng mga nakakatanda [This is what really hurts me. We can allocate money to something with risk and yet we cannot fund additional pension for our elderly]," she said.

Rigorous Senate scrutiny

At the Senate, Minority Leader Aquilino “Koko” Pimentel III said the proposed MIF will undergo rigorous scrutiny in the chamber, as there are a lot of questions that need to be answered, including the government’s capability to fund it.

“What will fund this? Where are the 'excess revenues'?" Pimentel told GMA News Online in a Viber message when asked if the minority will support the measure filed in the House of Representatives

"Will ask extensively searching questions about this. How will it be funded in the first place? How will it work in the long run? Will ask by analogy questions concerning SSS, GSIS, etc. Other matters: appointing power, transparency, [Commission on Audit], paper income, etc. MADAMING KAILANGAN SILANG IPALIWANAG," he added.

Asked if the government must prioritize managing its debt first to stabilize the national budget than creating the sovereign wealth fund, Pimentel said: “The LEGISLATURE must first of all show discipline and self restraint when it passes the yearly budget.”

GMA News Online sought the comment of Finance Secretary Benjamin Diokno on Pimentel's remarks but he has yet to respond as of posting time.

On Wednesday, Diokno said the establishment of the Maharlika Wealth Fund "has been the imprimatur of the President." —KBK, GMA Integrated News