Quimbo: Initial Maharlika funding around P150 billion sans GSIS, SSS contribution

The initial funding for the proposed Maharlika Wealth Fund (MWF), which seeks to grow excess funds of state-run financial institutions via investments, could reach around P150 billion, House appropriations panel senior vice chairperson Stella Quimbo said Thursday.

Quimbo announced the ballpark figure less than a day after the bill's authors in the House of Representatives, including herself, decided to drop the Government Service Insurance System (GSIS) and Social Security System (SSS), the state-run repository of pension of employees in the country, as mandatory contributors to the MWF to allay the people's concerns.

"I don't want to preempt how much it is going to be [without GSIS and SSS as mandatory contributors], pero para sa akin, P150 billion, laban na 'yun (For me, P150 billion is enough to jumpstart this)," Quimbo, an economist and professor, said in an ANC interview.

"Again, let us start small. Palaguin natin (Let us grow the initial amount first), let us see how much we can contribute [from that initial fund] to support the national budget, and we'll see how it goes," she added.

Quimbo earlier announced that with GSIS and SSS out of the picture, the MWF will be funded by state-run banks LandBank of the Philippines (P50 billion),  the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas which amount is expected to be known during the hearing on the MWF bill before the House appropriations panel on Friday.

The MWF initially eyed P250 billion seed funding from state-run financial institutions and P25 billion from National Treasury. Of the P275 billion, P175 billion would have been sourced from the GSIS and SSS. This amount has earned flak from the GSIS and SSS members, economists, and even business groups.

But the change of heart, Quimbo said, shows Congress is committed to addressing the public's concerns despite a bad start.

"The concept is good, but admittedly, we started on the wrong foot. And that's fine. We took the heat. There is no perfect bill. This (MWF bill) was prepared by the economic managers, and of course we assumed that there were sufficient consultations. But lo and behold, when we started hearing the bill, we realized that the consultations were not enough, and obviously, at this time, it is not right to include GSIS and SSS as mandatory fund contributors," she said.

"We have a Speaker (Martin Romualdez) who listens, and we are proactive. We had a meeting with economic managers yesterday and we decided that it is not right to include GSIS and SSS right now. In the future, they can do that if their board sees that they can grow their funds by pitching in MWF because it is clear in their charters that investing is within their mandate. Their earnings from investments are part of what is financing the pension," she added.

Quimbo then said that aside from GSIS and SSS, the General Appropriations Act and the National Treasury have been removed from the list of mandatory contributors.

On the safeguards' turf, the lawmaker said the MWF authors also increased the number of independent MWF Board Members from two to four.

The MWF Board will still be composed of 15 individuals and chaired by the President.

"The four independent members will come from the academe and the private sector," she said.

Quimbo  appealed to the public to give MWF a chance, given that the earnings from its investments would provide the necessary boost to the annual national budget which is currently insufficient to fund social services, including salary and pension hike.

"We cannot just remain dejected every time we don't have enough funds for teachers, for schools, hospitals, so this is where the MWF initiative is coming from," she said.

"It is the first time that we are seriously considering this, so ganun talaga [na may trust issues ang public]. Birthing pains. But that is a part of our job, it is not for the fainthearted. But we should [also] keep an open mind because otherwise, hanggang dun na lang tayo. We deserve more. We deserve better," Quimbo added.

(We understand that the public has trust issues but we have to keep an open mind or else we will get stuck.)

House Senior Deputy Minority Leader Paul Daza, for his part, said dropping GSIS and SSS and mandatory MWF contributors is a good move.

“This is indeed a step in the right direction,” Daza said in a statement. “As I’ve previously mentioned, I’m not entirely against having a State Wealth Fund like the [MWF]. However, we may not be able to sustain such a fund due to the current state of our economy,” he added.

“There is a proper way to execute this fund. Let us please not rush this through Congress. We must study this carefully and create a working MWF that would suit our current economic situation,” he further said.

Initial victory

Members of the progressive Makabayan bloc, however, maintained their opposition to the measure by arguing that the MWF will gamble public funds just the same.

“No matter how they try to deodorize it, the fact remains that this bill is rotten and should be junked. We don’t have surplus, we don’t have wealth. We are even running on a deficit budget and the Treasury said our current debt is P13.52 trillion,” House Deputy Minority Leader France Castro said in a news conference.

She added that the removal of the GSIS and SSS as sources of the MWF “is an initial and partial victory of the people against endangering their pensions.”

House Assistant Minority Leader Arlene Brosas and Kabataan party-list Representative Raoul Manuel, for their part, said that if the government really wants the MWF to be of help, it should reduce the confidential and intelligence fund (CIF) of various agencies and go after ill-gotten wealth and place it under the MWF.

The Office of the President has P4.5 billion worth of CIF while the Office of the Vice President has P500 million worth of CIF both under the proposed P5.268 budget for 2023.

"Kung gusto talaga ng gobyerno na magkaroon ng pondo, tanggalin nila ang confidential at intelligence fund, ayusin nila ang prioritization sa budget ng mamamayan, at maglaan sila ng pondo para sa batayang serbisyo na direkta sa mamamayan," Brosas said.

(The government should cut on CIF and fund aid that will directly benefit the people.)

“We stand by our position that the MWF should be junked because it is taxpayers’ money which is at stake here. If they want MWF, they should get that from wealth tax and ill-gotten wealth,” they said. —AOL/KBK, GMA Integrated News