Diokno: GSIS, SSS can still ‘subscribe’ to Maharlika’s projects, but not equity

While the Congress-approved version of the Maharlika bill prohibits government-run pension funds and health insurance from investing in the Maharlika Investment Fund (MIF), Finance Secretary Benjamin Diokno said the Government Service Insurance System (GSIS) and Social Security System (SSS) would still be able to participate in the activities of the sovereign wealth fund.

The Maharlika bill, approved by the Senate and adopted by the House of Representatives, prohibits government-owned and controlled corporations (GOCCs) providing social security and public health insurance such as, but not limited to the GSIS, the SSS, the Philippine Health Insurance Corporation (PhilHealth), the Home Development Mutual Fund (PAG-IBIG Fund), the Overseas Workers Welfare Administration (OWWA), and the Philippine Veterans Affairs Office (PVAO) Pension Fund from investing in the MIF and contributing to the capitalization of the Maharlika Investment Corporation (MIC).

Under the proposed legislation, the MIC, a government-owned company, will manage the MIF.

Diokno, however, said that if the GSIS or the SSS deems it advantageous, it can still “subscribe” to the MIC’s activities but on a project level.

“For example, the Maharlika has a big project worth P1 trillion and the GSIS or SSS wants to subscribe or invest in 10% of that [project] because it has high return, they can do it… in the project, but not on equity,” the Finance chief told reporters at his weekly briefing.

National Treasurer Rosalia de Leon echoed Diokno’s remarks.

“[They] can participate at the project level, but not in the Maharlika Corporation,” de Leon said.

National Economic Development Authority (NEDA) Secretary Arsenio Balisacan earlier said that the absolute prohibition of the state pension funds would not be a roadblock in achieving the objective of the proposed MIF.

President Ferdinand "Bongbong" Marcos Jr., has likewise said that the national government had no intention of using state pension funds as a “seed fund” for the proposed MIF.

GSIS President and General Manager Jose Arnulfo “Wick” Veloso also mentioned that early on, there had been discussions that pension funds would not be used for the sovereign wealth fund.

The MIF bill states that the Maharlika Fund would be created using:

• P50 billion from the Land Bank of the Philippines (LBP)
• P25 billion from the Development Bank of the Philippines (DBP)
• P50 billion from the National Government

The contribution from the national government would come from the following sources:

• Bangko Sentral ng Pilipinas' total declared dividends
• National government's share of the income of PAGCOR
• Properties, real and personal identified by the DOF-Privatization and Management Office
• Other sources such as royalties and/or special assessments

Diokno expressed optimism that the MIF will be mobilized before the end of the year, seeing that the proposed measure creating the sovereign wealth fund will be signed into law by the President before his second State of the Nation Address on July 24. 

Pimentel then questioned the intention behind the possibility of using the pension funds in the MIF.

"The question is: why are they so interested in the funds or money of the GSIS and the SSS? These are the members' private funds. Government should be 'hands off' these private funds,” he said.

Senate Majority Leader Joel Villanueva, who voted in favor of the MIF bill's passage, said there should be no other interpretation of the measure that they passed.

Villanuvea said the final version of the bill clearly states that investments from government agencies and GOCCs providing for the social security and public health insurance of government employees, private sector workers and employees, and other sectors and subsectors are absolutely prohibited, whether mandatory or voluntary, in the Maharlika Investment Corporation (MIC) and the MIF.

"We believe that there is no room for interpretation regarding this prohibition… We trust that the [implementing rules and regulations] will be faithful to the bill that we passed and to the numerous manifestations and statements of support from this representation and our colleagues on this issue," Villanueva said. — BM/KBK, GMA Integrated News