BSP to provide initial P35B for proposed Maharlika Fund

The Bangko Sentral ng Pilipinas (BSP) on Friday expressed readiness to provide P30 billion to P35 billion for the proposed Maharlika Wealth Fund (MWF).

During a hearing of the House committee on appropriations chaired by Ako Bicol Representative Zaldy Co on the proposed MWF Act, BSP deputy governor Francisco Dakila Jr. said the amount will come from BSP’s dividends.

“'Yung buong dibidendo ng BSP na pwedeng magamit para mapondohan ang Maharlika Wealth Fund (The entire dividends of the BSP can be used to fund the Maharlika Wealth Fund),” he said.

Asked if he was referring to the around P30 billion to 35 billion dividends earlier reported during the hearing, Dakila said: “'Yun po ang estimate na initial na contribution (That would be the initial contribution)."

After providing the initial contribution, Dakila said the BSP will only give 50% of its dividends to the MWF because the other 50% will be allocated for the capitalization of the BSP.

He said the BSP is still in the process of building up its target capital in compliance with its amended charter.

Once the BSP is fully capitalized, Dakila said it will again provide 100% of its dividend for the MWF.

"After na mapondohan na 'yun, ang proposal ay magkaroon ng  50-50 sharing between BSP's capitalization and the funding source for the [MWF] until such time that the BSP is fully capitalized," Dakila said.

"Once ma-fully capitalized na ang BSP,  'yung declared dividends of the BSP to the national government may be earmarked wholly to fund the [MWF]," he added.

Dakila said BSP’s international reserves would not be affected by its contribution to the MWF.

“The dividends remitted by the BSP to the national government are in Philippine peso, while the GIR (Gross Domestic Reserves) is denominated by foreign currency, so the GIR will not be affected at all,” Dakila said, stressing the BSP's support.

On Thursday, House appropriations panel senior vice chairperson Stella Quimbo said the initial funding for MWF could reach around P150 billion.

The MWF will also be funded by state-run banks LandBank of the Philippines with P50 billion and the Development Bank of the Philippines with P25 billion.

It seeks to grow excess funds of state-run financial institutions via investments.

Aside from the contribution of the BSP, the House panel also adopted amendments on the funding sources for MWF, including the Land Bank of the Philippines with P50 billion, and Development Bank of the Philippines with P50 billion.

The Philippine Amusement and Gaming Corporation (PAGCOR) and other government-owned gaming operations shall also contribute at least 10% of their gross revenues.

Other government financial institutions and government-owned and -controlled corporations may be authorized to contribute to the MWF based on their respective investment and risk management strategies. —AOL/KBK/NB, GMA Integrated News