The proposed P275-billion Maharlika Wealth Fund (MWF) should be patterned after the tried and tested features of other countries' sovereign wealth funds (SWF).
House Deputy Minority Leader and Bagong Henerasyon (BH) Party-List Rep. Bernadette Herrera gave this suggestion Wednesday, Dec. 7 as she reiterated her point about adapting SWF best practices from other countries.
“Take the Norwegian Wealth Fund, for example. The citizens have unrestricted access to its records via their Freedom of Information law. We should learn from this," she said in a statement.
"Another thing is that the proposed Maharlika fund is designed to be exempt from review by the Office of Government Corporate Counsel (OGCC). So any audits that take place will only happen after losses have been incurred,” noted the former deputy speaker.
The MWF, which will act as the country’s very own SWF, is contained in House Bill (HB) No.6398. Its authors include House Speaker Martin Romualdez and Senior Deputy Majority Leader Sandro Marcos.
“The theory behind a sovereign wealth fund is very sound, and many developed countries have used it as an effective way to manage assets and pursue development projects,” she acknowledged.
“With that being the case, the Philippines has the opportunity to model our own fund based on the successful best-practices of other nations. Unfortunately, even the source of funds of the MWF raises a number of serious questions,” Herrera said.
The draft bill proposes that the Maharlika Wealth Fund be sourced from contributions from the Government Service Insurance System (GSIS), the Social Security System (SSS), Land Bank of the Philippines, and Development Bank of the Philippines. The fund will get an initial investment of P250 billion from these state pension funds and banks.
The remaining P25 billion will be given by the National Treasurer, in tranches.
“A simple analogy would be this: imagine a cooperative fund that was put up by security guards, or delivery riders, for example. Would it make sense if these funds were used to benefit someone who was never a security guard or a delivery rider? Or how about the association dues of a private village or community? Can this be used to aid someone who never lived there, and never contributed to the pooled fund?” Herrera asked.