Senators lukewarm on proposed creation of 'Maharlika' fund

Some senators on Monday, December 5 have expressed their reservations about the propsoed Maharlika Investment Fund (MIF) noting it is a “high-risk, high reward” endeavor.

“Thus, there should be safeguards and limitations on investment into riskier endeavors,” Senator Sonny Angara, chairman of the Senate Committee on Finance, said.

Angara said using funds from the Government Services Insurance System (GSIS) and the Social Security System (SSS) which are owned by its members, the people, may not be feasible.

“Accessing contributions of pension funds would be a ticklish issue and may encounter some obstacles,” he said.

Angara said it would be best to access investible funds and use dormant government assets, or those with high potential upsides, like real properties abroad, as part of the equity of the fund.

“I’m sure senators will scrutinise the measure and inject safeguards and best practices (on the bill),” he said.

Senator Joseph Victor “JV” Ejercito, said he filed a similar bill before but did not identify GSIS and SSS funds as source of investment for the sovereign wealth funds.

Ejercito said he is apprehensive to touch pension funds due to past experiences with the pension funds of retired army and police personnel.

“The intent of Maharlika Bill seems good, except that I am wary to use GSIS and SSS funds for this purpose,” Ejercito added.

Sen. Francis “Chiz” Escudero said the current version of the bill is “lacking in many respects.”

“We will await the bill once approved in the House. Mahabang debate pa yan (It’s still a long debate) has to undergo a process,” Escudero said.

But among the questions he has about the bill include details on return on investment on government financial institutions (GFIs).

“What is the return on investment of GFI’s? How often will dividends be declared, if any?” Escudero asked.

“It’s a corporation, why is the number of board seats not in accordance with their respective capital contributions? What ROI will GFI’s get if it will be spent on government projects? What government projects are they contemplating?” he further pointed out.

Senate Majority Leader Joel Villanueva said that while the creation of the sovereign wealth fund is good in principle, discussions on its sources of funds and its management is necessary.

“That being said, we must protect the retirement funds and other benefits of ordinary workers, who are already struggling from high prices of basic goods and are bracing for the impending global recession,” Villanueva said.

“We look forward to hearing more views from different stakeholders when we discuss this proposal in the Senate,” he added.

Senate Minority Leader Aquilino “Koko” Pimentel III also echoed the need for deeper consultations on the measure.

“Yes, that’s the minimum that should be done. Consultation and consent of the owners of the funds they intend to put in higher risk placements,” Pimentel said.

Sen. Nancy Binay said there is a need to ensure a “more, comprehensive, and transparent” discussions on the bill “because it's all our money.”

“Retirement fund ng sambayanan 'yan, eh. Bilang myembro ng SSS at GSIS, gaya ng karamihan sa mga manggagawa’t empleyado sa bansa ay inaasahan ko ang aking contribution sa panahon na magre-retiro na ako (That's the people's retirement fund, right? As a member of the SSS and GSIS, like most workers and employees in the country, I look forward to my contribution when I retire),” Binay said.

“Mahalagang malaman kung ano ang magiging epekto ng wealth fund sa perang ipinundar natin nang matagal, na isinantabi para makapamuhay pa rin tayo kahit wala nang trabaho (It is important to know what effect the wealth fund will have on the money we have invested for a long time, which has been put aside so that we can still live even without a job),” added the senator.

Binay also said it is equally important to get the opinion of the academe, the experts, “and our countrymen who will be affected” by the proposed law.

“This is a policy that will affect us all, so I hope we don't rush to pass it. Let's discuss the pros and cons and take a closer look,” she stressed.