The House Committee on Banks ang Financial Intermediaries approved during a public hearing Thursday afternoon, Dec. 1 the proposed Philippine sovereign wealth fund, dubbed the Maharlika Wealth Fund (MWF).

The proposed MWF Act is embodied in House Bill (HB) No. 6398, the nitty-gritty of which underwent amendments by a technical working group (TWG) led by Albay 2nd district Rep. Joey Salceda during the hearing.

Among the more important amendments was the final name for the proposed sovereign wealth fund.

It was previously called Maharlika Investment Fund (MIF), stemming from the fact that the pooled funds would essentially be used for investments. But committee chairman, Manila 5th district Rep. Irwin Tieng said they settled for MWF since there's a similar fund in Singapore dubbed MIF.

Another key amendment is that the start up fund would be raised from the initial P250 billion to P275 billion, with the P25-billion augmentation coming from the National Treasurer.

After the hearing, Salceda, who chairs the Committee on Ways and Means, confirmed to reporters that the proposed MWF Act had been approved by the Tieng committee "subject to style".

As a next step, the measure will be submitted to the Committees on Ways and Means and on Appropriations for the approval of its tax and appropriations provisions, respectively. Salceda has already committed to pass HB No.6398's tax provisions come Monday, Dec. 5.

“Second reading by Wednesday (Dec. 7). That’s our commitment,” the Bicol solon said in a subsequent statement Thursday.

Referring to the panel deliberations, he said: “We also introduced a government guarantee only to GFIs (government financial institutions), which are fully owned by the State anyway. So, no government guarantees will be issued to debts to private entities, unlike what happened in Malaysia.”

“There will also be no shadow accounts or investments. Multiple audit requirements, independent directors, and the Treasurer of the Philippines, who will sit on the board, will ensure that," he added.

Patterned after the sovereign wealth funds of other Association of Southeast Asian Nations (ASEAN), the MWF seeks to generate another income stream for the Philippine government through investments here and/or abroad.

The money generated from the MWF will then be used as additional budget for government projects.

Principally authored by House Speaker Martin Romualdez, HB No.6398 was only filed last Nov. 28.

The Tieng panel initially took up the measure during a hearing on Nov. 29, during which it was "approved in principle" pending the input of the TWG.

Committee on Appropriations Senior Vice Chairperson and Marikina City 2nd district Rep. Stella Quimbo was also part of the TWG. She is an author of HB No.6398.

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Salceda and Quimbo agreed that whoever will manage the MWF should have a good grasp on investment-making.

Representatives from the Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines (Landbank), and the Development Bank of the Philippines (DBP) unanimously supported the creation of the MWF during the previous hearing.

To raise the P250-billion initial fund, GSIS will provide an investment of P125 billion, P50 billion for both SSS and LBP, and P25 billion from the DBP. Meanwhile, the additional P25 billion from the National Treasurer--to be released in tranches--is considered the national government's share to the MWF.

Meanwhile, Quimbo stressed that the initial investment of the MWF will not have any negative impact on the delivery of services or benefits to the stakeholders of the four GFIs.

“Their investible funds are separate from the funds earmarked for benefit payments,” she noted.