Foreign business groups in the country are keenly watching the proposed creation of a Maharlika Wealth Fund, a Philippine sovereign wealth fund, being pushed in the Lower House.
“We are following it with great interest,” said Lars Wittig, president of the European Chamber of Commerce of the Philippines (ECCP) during the Arangkada Philippines Forum press conference on Thursday, Dec. 1.
From a European perspective, Wittig said, they are monitoring the situation before they would express their decision. “Am neutral for now,” he said stressing that the planned sovereign wealth fund is a big issue but still with “very few details on the table.”
He added though that the Norwegian sovereign wealth fund model, a Scandinavian country, is always a good model to be aspired, but noted that there is no perfect fit. Norway is also very small so easier to control with high level of trust in government and very capable and very trusted in managing other people’s money because the maturity of the country is ready.
Ebb Hinchliffe, executive director of the American Chamber of Commerce, noted that other countries are doing sovereign wealth fund and proven successful.
Noting that the “devil is in the detail”, Australia-New Zealand Chamber of Commerce Philippines Vice-President Bradley Norman also noted of the need for more information on the proposal.
Nobuo Fujii, vice-president and executive director of the Japanese Chamber of Commerce and Industry of the Philippines, said that Japanese firms are still concentrating in Japan because of the COVID and may not looking for investing overseas for now. This was echoed by Um Hyunchong, president of the Korean Chamber of Commerce of the Philippines, who said that Korean firms may not be looking at expansion yet for now.
Earlier, House Speaker Martin G. Romualdez filed House Bill 6398 calling for the establishment of the Maharlika Wealth Fund, patterned after the sovereign wealth fund of other countries.
Romualdez explained the fund aims to maximize the profitability of investible government assets for the benefit of all Filipinos.
The proposed fund is patterned after the sovereign wealth funds of 49 countries, including Singapore, China, Hong Kong, South Korea, Malaysia, Indonesia, Taiwan, Vietnam, and East Timor.
Under the bill, the envisioned Maharlika Wealth Fund would have a governing board, composed of nominees of the contributing state-owned firms, which would be in charge of managing the fund.
The board would include two independent directors from the national government.
The Department of Finance (DOF) has thrown its support behind the proposed measure seeking the creation of a sovereign wealth fund with safeguards against political interference.
Finance Secretary Benjamin E. Diokno said President Ferdinand Marcos Jr. is expected to certify as urgent the bill that aims to establish the so-called Maharlika Wealth Fund.
Diokno said the Marcos administration expects the fund will begin operational next year with an initial capital of P250 billion.
Resources would primarily come from contributions from the Government Service Insurance System, Social Security System, Land Bank of the Philippines, Development Bank of the Philippines, and national government, he said.
Diokno also assured that the country’s sovereign wealth fund will be transparent with safeguards against political interests, and that it will be well-managed unlike Malaysia’s infamous state-owned investment fund, 1Malaysia Development Berhad (1MDB).
“We are more transparent, and there will be a governing body that is entirely separate from the government. While some cabinet members will be part of the advisory council, they will be independent,” Diokno said.
The DOF chief, however, said the President will be the one appointing people who will manage the fund.