Koko sees 'more difficult time' for Maharlika fund bill in Senate

Senate Minority Leader Aquilino "Koko" Pimentel III on Thursday said the proposed Maharlika Wealth Fund (MWF) being pushed by several ranking House leaders will have a difficult time in the Senate.

In a text message, Pimentel said the MWF bill was not "thought out well" and "rushed" after proponents made changes in the proposed capital sources amid public outcry.

"An idea which keeps on changing because it hasn’t been thought out well and was rushed, will always have a more difficult time in the Senate," Pimentel said when asked if the proposal will have better chances in the Senate.

The lawmaker made the remark after authors of the MWF bill decided to drop state pension funds Government Service Insurance System (GSIS) and Social Security System (SSS) as mandatory contributors to the proposed sovereign wealth fund.

At present, however, the MWF bill has yet to have a counterpart bill in the Senate.

No excess revenue

Pimentel pointed out anew that the government has no excess revenue to create a sovereign wealth fund, and that proof of which is the country's outstanding debt.

"Ang gulo nila, basic na basic 'yan, 'surplus' concept and yet even without a surplus they continue to espouse a wealth or investment fund. Ano proof na no surplus? Kaya nga tayo BAON NA SA UTANG," he said.

"The Maharlika Fund proposal is weak not only because the arguments for it are weak but the objections against it are strong."

Data from the Bureau of Treasury showed that the country's end-October outstanding debt stood at a record-high P13.64 trillion, up by 0.92% or by P123.92 billion from the end-September level of P13.517 trillion.

GSIS, SSS, GAA dropped

On Wednesday, House appropriations panel senior vice chairperson Stella Quimbo, one of the authors of the MWF bill, said the proponents of the measure decided to remove state pension funds as capital sources for the sovereign wealth fund after a meeting with the economic managers, including Bangko Sentral ng Pilipinas Governor Felipe Medalla who earlier opposed the proposal.

Interviewed on ANC on Thursday, Quimbo said with GSIS and the SSS dropped as sources, initial funding for the proposed MWF could reach around P150 billion.

"I don't want to preempt how much it is going to be, pero para sa akin, P150 billion, laban na 'yun [for me, P150 billion is enough to jumpstart this]," said Quimbo, an economist and a professor.

Aside from GSIS and SSS, also removed from mandatory contributors to MWF is the General Appropriations Act or the national budget law.

As a result, Quimbo said, the seed money will now come from the state-run banks Land Bank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas (BSP).

But according to Deputy Minority Leader Risa Hontiveros, there is still question on the availability of excess funds from these institutions.

"Now, they really would have to examine if there are excess funds at Land Bank, DBP and BSP, that they have been brandishing as 'enough,'" she said in a statement.

Hontiveros warned the public of the MWF bill's promises as she reiterated that the country cannot afford a sovereign wealth fund.

"It is only a matter of time before this trial balloon completely loses air, because, as this retraction shows, we don't need and can't afford a sovereign wealth fund," she said.

'Very welcome development'

Meanwhile, Senator JV Ejercito said the decision of the House members to drop GSIS and SSS as fund sources is a "very welcome development" as its provisions would now be similar to a sovereign wealth fund bill that he filed in the 17th Congress.

Ejercito said his proposal had pushed for a creation of a welfare fund that would derive its capital from reserves and surplus.

"I will not support any measure that will gamble on SSS & GSIS pension," he said.

Apart from Ejercito, Senate Majority Leader Joel Villanueva expressed support for the idea of creating a sovereign wealth fund but opposed the use of state pension funds as funding sources.

In a separate statement, Villanueva also welcomed this development and suggested that the BSP should manage the investment funds.

He floated the idea as he reiterated the need to protect workers' retirement funds and benefits.

"We have to be circumspect about the sources of the fund and how it will be managed. In other countries, their central banks are the ones who manage these funds, which is why we can look into giving the Bangko Sentral ng Pilipinas the responsibility of managing the SWF as an independent financial institution," he suggested.

Villanueva said that the BSP has already established its credibility as an independent institution, adding that even in sovereign wealth fund models of Norway and Timor Leste, it's the central bank which manages these funds.

"Credibility issue din po kasi itong Maharlika with political implications unfortunately, so if we really want to set up an investment fund with majority of the money coming from BSP, why not let the monetary board be the oversight of the fund and an arm or office in central bank be set up to manage the fund? If it’s not in the BSP charter, let the proposed law be an amendment to the charter," he said in a separate Viber message to reporters.   —KBK, GMA Integrated News