SSS, GSIS investing in Maharlika fund? 'We don't want to preclude the board,' says Diokno

Finance Secretary Benjamin Diokno on Tuesday said board members of state pension institutions should not be "precluded" from deciding on possible investments in proposed sovereign wealth fund.

"I'm not saying that. We don't want to preclude the board. That's a board decision, 'di ba [right]?" Diokno told Palace reporters when asked if it would be fine for the Social Security System (SSS) and Government Service Insurance System (GSIS) to invest in the proposed Maharlika Investment Fund (MIF).

Diokno also said there is nothing concerning about the fact that GSIS and SSS board members are all presidential appointees.

"It's a decision of the board, kaya nga may mga board, 'di ba? While they are presidential appointees, they act in the best interest of the company," Diokno said.

"In an organization like the SSS or GSIS, they have what's called allocation sa portfolio... mayroong 10% dito sa high risk pero high return... desisyon 'yun ng kanilang risk committee," he added.

On Monday, Senator Risa Hontiveros raised what she called a "backdoor provision" in Senate Bill No. 2020, or the MIF bill, 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 SSS and GSIS are both GOCCs or government-owned and -controlled corporations.

Hontiveros said 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.

In a statement Tuesday, Senate Minority Leader Aquilino “Koko” Pimentel III said an "ironclad" provision to ensure that the pension funds will not be touched or compromised should be included in the Senate's version of the MIF bill.

Meanwhile, in the same interview, Diokno also allayed concerns that Land Bank of the Philippines could face bankruptcy if ever the MIF fails.

"'Yung Landbank, ang ini-invest lang naman niya is 3% of its total investable fund.. actually ang investible fund niya is more than P1 trillion eh so mga P50 billion lang ang ko-contribute niya and it will probably get high returns compare sa current niya," he said. —KBK, GMA Integrated News