The House Committee on Appropriations has officially dropped the Government Service Insurance System (GSIS) and Social Security System (SSS) as sources of funds for the controversial Maharlika Wealth Fund (MWF).
This, after the appropriations panel approved during a public hearing Friday, Dec. 9 the revised funding provision of the now-unnumbered bill seeking to institutionalize a Philippine sovereign wealth fund.
The title of the measure reads, ""An Act establishing the Maharlika Wealth Fund, providing for the management, investment, and use of the proceeds of the fund, appropriating funds therefore and for other purposes."
Replacing the GSIS and SSS as contributors to the proposed MWF is the Bangko Sentral ng Pilipinas (BSP), officials of which attended the panel hearing as resource persons.
Marikina City 2nd district Rep. Stella Quimbo, an author of the proposed statute and senior vice chairperson of the panel, moved to replace the entire Section 9 or appropriations provision of the unnumbered bill, which was based on House Bill (HB) No.6398, or the MWF bill as initially filed in the 19th Congress.
Appropriations Committee Chairman and Ako Bicol Party-list Rep. Zaldy Co approved Quimbo's motion.
No fixed amount
A key difference between HB No.6398 and the unnumbered MWF bill tackled Friday was that the latter no longer has a fixed amount in terms of the seed money for the planned sovereign wealth fund. This is mainly due to the proposed set-up of newfound contributor BSP, which was accepted by the solons.
According to BSP Deputy Governor Francisco Dakila Jr., the Philippine central bank is willing to funnel 100 percent of its declared dividends to the proposed MWF, at least for its first year. Dakila was a resource person during the two-hour hearing.
Another resource person from the BSP, lawyer Leila Rivera, explained that their dividends are declared "in the amount of 50 percent of out our income". Quimbo asked the BSP regarding their estimated income for 2022. Rivera said the projected figure is "P60 to 70 billion".
"So our dividends that can be declared will be about P30 to 35 billion," Rivera said. Obviously, there will be a variance in the BSP's income--and by extension its dividends--every year.
For context, the BSP is meant to replace the combined P175-billion contribution to the MWF that was supposed to come from the GSIS and SSS as per the original bill.
In total, HB No.6398 was supposed to raise a seed money of P275 billion for the sovereign wealth fund, with the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), and the National Treasurer contributing P50 billion, P25 billion, and P25 billion, respectively.
Under the revised Section 9 of the unnumbered bill, the LBP and DBP will still be tapped for the respective sums of money. However, the National Treasurer will no longer be sourced for funds.
The perception is that public pressure caused the House leadership to remove GSIS and SSS as fund source for the MWF.
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50-50 sharing scheme
Dakila also proposed a 50-50 sharing scheme between the BSP and the national government after the initial year of the MWF, which is envisioned to raise funds for big-ticket government projects.
"After na mapondohan na yun, ang proposal ay magkaroon ng (After that is funded, the proposal is to have a) 50-50 sharing between BSP's capitalization and the funding source for the until such time that the BSP is fully capitalized," he said.
"Once ma-fully capitalized na ang BSP (Once the BSP is fully capitalized), yung (the) declared dividends of the BSP to the national government may be earmarked wholly to fund the ," Dakila added.
The unnumbered bill will now be sent back to its mother committee--the Committee on Banks and Financial Intermediaries--for its approval. The measure has previously received the nod of the Committee on Ways and Means for its tax provision.
The MWF bill is expected to be approved on second reading by the House plenary next week, just before the lawmakers start their five-week holiday break.
The main authors of the unnumbered bill are House Speaker and Leyte 1st district Rep. Martin Romualdez, Majority Leader and Zamboanga City 2nd district Rep. Mannix Dalipe, Committee on Accounts Chairperson and Tingog Party-list Rep. Yedda Marie Romualdez, Deputy Majority Leader and Tingog Party-list Rep. Jude Acidre, Committee on Banks and Financial Intermediaries Chairman and Manila 5th district Rep. Irwin Tieng, Committee on Ways and Means Chairman and Albay 2nd district Rep. Joey Salceda, and Committee on Appropriations Senior Vice Chairperson and Quimbo.