GSIS says use of funds for Maharlika Wealth Fund not unconstitutional

Government Service Insurance System (GSIS) President and General Manager Jose Arnulfo “Wick” Veloso on Wednesday defended the proposed Maharlika Wealth Fund anew, saying it is not unconstitutional and pension funds will not be affected.

At the televised public briefing, Veloso responded to remarks that the use of GSIS funds, along with those of the Social Security System (SSS) for the sovereign wealth fund is unconstitutional.

“Mali po na itong ginagawa natin dito ay unconstitutional. Amin lamang pong inilalagay ang pera ng aming miyembro sa GSIS sa isang kumpanya which is part of the investing activity that we are doing at hindi po ito private property,” he said.

[It is wrong that what we are doing is unconstitutional. We are just placing the money of GSIS members in a company as part of the investing activity that we are doing, and this is not private property.]

“Please take note that the funds that we invest are excess investible funds of GSIS, and all benefits that accrue will only go back to GSIS members… Hindi po natin gagamitin ang pera ng ating mga pensyonado [We will not use the money of our pensioners],” he added.

Veloso’s remarks were contradictory to those made by retired Supreme Court Justice Antonio Carpio, who said that the use of the investible funds of the SSS and GSIS for the Maharlika Wealth Fund is unconstitutional.

Carpio argued that contributions of SSS and GSIS members should only be used for their benefit, while the Maharlika Wealth Fund would benefit all Filipinos including non-SSS and non-GSIS members.

Veloso on Wednesday argued, however, that any returns from the investments will be returned to the members of global financial institutions (GFIs).

“No part of the fund accrues to non-members... Dibidendo na makukuha ng GSIS, straight mapupunta sa miyembro namin. Ganyan po ang ginagawa namin,” he said.

[No part of the fund accrues to non-members.. The dividends that the GSIS will get will go straight to our members. That is what we are doing.]

Veloso earlier this week already delivered speech defending the proposed sovereign wealth fund, as he said now is the time to invest and reap more funds for member benefits.

Lawmakers in the House of Representatives have filed House Bill 6398 which seeks to establish the Maharlika Wealth Fund that targets to allow the government to invest surplus reserves in real estate and financial assets.

Among the authors of the proposed measure are House Speaker Ferdinand Martin Romualdez, and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos III, cousin and son of President Ferdinand “Bongbong” Marcos Jr. respectively.

Under the proposal, GFIs such as the GSIS, the SSS, the Land Bank of the Philippines (LandBank), and the Development Bank of the Philippines (DBP) will be allowed to invest their funds for higher returns.

“Ang tanong ho nga sa akin ay kailan ba? Bakit minamadali? Alam niyo ang puntos po ay ang development po ng Pilipinas ay dapat nagsimula kahapon pa,” Veloso said.

[I am being asked when? Why is this being rushed? You know the point is that the development of the Philippines should have started yesterday.]

“To set up this organization will take some time to be able to have the first investment for a project that will generate jobs,” he added. 

A number of business groups, including the Makati Business Club (MBC) and the Management Association of the Philippines (MAP) have already voiced concern over the fund as they cited the lack of justification for it.

The Philippine Chamber of Commerce and Industry (PCCI), which previously supported the measure, has also backpedaled. Its President George Barcelon said that since more details have been made available, the group is calling for a reconsideration of the measure.

Bangko Sentral Governor Felipe Medalla earlier expressed concern over the proposed measure, citing its impact on the country’s reserves and the lack of transparency.

The President’s sister and Senator Maria Imelda “Imee” Marcos last week also voiced concern that the fund could suffer the same fate as the 1Malaysia Development Berhad (1MDB) which was hounded by graft issues.

For his part, Finance Secretary Benjamin Diokno said criticisms on the measure come from those who have yet to read the measure, as safeguards will be put in place to ensure transparency. — RSJ, GMA Integrated News