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PCCI exec on removal of GSIS, SSS as mandatory capital source for Maharlika Fund: A good development
By TED CORDERO,GMA Integrated NewsThe Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, welcomed the removal of state pension funds Government Service Insurance System (GSIS) and Social Security System (SSS) as mandatory contributors to the proposed Maharlika Wealth Fund (MWF).
“I think it’s a good development… It also shows our legislators are open to suggestions and to constructive pointers,” PCCI president George Barcelon told GMA News Online.
The PCCI earlier raised concern over the proposed sovereign wealth fund
as “pooling resources from the revenues of the national government, the Central Bank’s and government-owned financing institutions’ may impact the sustainability of the country’s welfare system and financial standing.”On Wednesday, House appropriations panel senior vice chairperson Stella Quimbo, one of the authors of the MWF bill, announced that GSIS and SSS were dropped as funding sources of the sovereign wealth fund considering the fears of pensioners.
Aside from GSIS and SSS, also removed from mandatory contributors to MWF is the General Appropriations Act or the national budget law.
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The seed money for the proposed MWF will be sourced from state-run banks LandBank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas.
Quimbo said BSP Governor Felipe Medalla, who initially opposed the MWF, was reassured that the central bank’s foreign currency reserves will not be tapped and only the BSP’s profits.
While GSIS and SSS being “out of the picture” in the MWF is a welcome development, Barcelon said, “We still have to wait further to see exactly how this would be and who would be running it.”
“Hopefully, with this fund, they can make investments that will give us a return that is better than the return within our financial system and investment climate,” he said.
“If this is not managed well, it might affect our credit standing. How it’s managed and the transparency of it will be important in the perception from other international financial institutions that would evaluate our credit standing,” he added.
National Treasurer Rosalia de Leon has enumerated eight safeguard measures in the proposed MWF to ensure its integrity. — RSJ, GMA Integrated News