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Maharlika Wealth Fund seen to be operational 6 months from enactment into law — Diokno


The proposed sovereign wealth fund dubbed as Maharlika Wealth Fund which aims to maximize the profitability of government assets is seen to be up and running within six months after the measure creating it is enacted into law, Finance Secretary Benjamin Diokno said Wednesday.

During the Kapihan sa Manila Bay news forum, Diokno said the establishment of the Maharlika Wealth Fund “has been the imprimatur of the President.”

“We want to create a fund that will take care of future generations of Filipinos… We have to set aside for the future,” he said.

The Finance chief said that an inter-agency committee composed of the Department of Finance (DOF), Department of Budget and Management (DBM), National Economic and Development Authority (NEDA), and government financial institutions (GFIs) prepared the bill, which was then filed in the House of Representatives.

On Monday, House Speaker Martin Romualdez filed House Bill No. 6398 that seeks the creation of the Maharlika Wealth Fund.

The sovereign wealth fund was aimed to allow the government to invest surplus reserves or revenues in an array of both real estate and financial assets “to stabilize national budgets, create savings for their citizens, or promote economic development.”

The fund, according to Romualdez, would give GFIs such as the Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines (Landbank), and Development Bank of the Philippines (DBP) “the opportunity to ensure their respective funds’ optimal asset allocation as well as ensure that resources are efficiently channeled to investments that will provide the most value not only to the participating GFIs, but also to the country.”

“I think, give it another six months from the passage before it becomes operational,” Diokno said.

He added that the Congress is “working to pass the proposal before the end of the year.”

The Finance chief said the Philippines will pattern the Maharlika Wealth Fund from other countries which have sovereign wealth funds such as Singapore, Malaysia, Indonesia, Australia, and Norway.

Diokno said that some countries set aside revenues from depletable resources such as petroleum for their sovereign wealth fund.

For the Philippines, the Finance chief said the government can set aside revenues collected from royalties in mining, upstream oil and gas, as well as bandwidth or frequencies for telecommunications.

Under the proposed measure, the Maharlika Wealth Fund would initially draw  investments from GSIS (P125 billion), SSS (P50 billion), Landbank (P50 billion), DBP (P25 billion) and national government (P25 billion).

Diokno said the initial capitalization from the GFIs will be the fund’s “seed money,” adding that some of the gross international reserves (GIR) under the Bangko Sentral ng Pilipinas and dollar inflows from overseas Filipinos’ remittances and business process outsourcing receipts can be funneled into the fund.

“Let’s just wait what will be the final version of the bill and see how they formulate this. The idea is we should benefit from OFW remittances because that is closest to natural wealth that we have,” he said.

“Anybody who’s willing to invest in the fund is welcome. It could be an international, private sector,” he added.

The fund and investments thereafter would be managed by the Maharlika Investments Corp. (MIC), which would be created through the measure.

The governing board of the MIC shall be composed of nine members; six from the founding GFIs, two independent directors, and the secretary of Finance as the representative from the national government.

“We will make sure that the fund is independent,” Diokno said, adding that the President “cannot meddle with the use of the fund.”

Other authors of the measure were House Majority Leader Manuel Jose Dalipe, Senior Deputy Majority Leader Ferdinand Alexander Marcos, Tingog party-list Representatives Yedda Marie Romualdez and Jude Acidre, and Marikina City Representative Stella Luz Quimbo.—AOL/RSJ, GMA Integrated News

 
 

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