MANILA - Former Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said the Senate’s version of the Maharalika Investment Fund has loopholes that will allow state-run pension funds to participate.
Guingundo noted the Senate version of the MIF bill, while not mandating SSS and GSIS to invest, contains a provision that will allow institutions such as these to invest their funds upon approval of their board of directors.
“Nothing prevents both SSS and GSIS from exposing themselves. Hindi dapat ginagalaw ang pondo ng SSS at GSIS,” Guinigundo said.
An earlier version of the MIF bill mandated the state-led pension agencies to invest in the sovereign wealth fund. However, this provision was dropped in later versions due to concerns this may compromise the pensions of Filipinos in both the private and public sectors.
Guinigundo, who has opposed the MIF since it was first proposed, added that for the investment fund to produce a high rate of return, it will need to be aggressive, and aggression in investment usually leads to more risk which the SSS and GSIS should avoid.
“Kung ikaw ay namamahala ng institutional funds, you tend to be more conservative. It is possible only if they shift from being conservative to a more aggressive stance of investment strategy. Baka dahil mas aggressive ang strategy, baka maging delikado ang pondo ng SSS at GSIS. Ang pondong ‘yan ay para sa pension ng mga retiradong kawani ng gobyerno at ng pribadong sektor. Kawawa naman kung isa, dalawang buwan, apektado sila,” Guinigundo said.
Senator Risa Hontiveros had also called for the "backdoor" provision to be removed from the Senate's version of the MIF bill.
Guinigundo also raised concerns about using dividends of the Landbank of the Philippines, Development Bank of the Philippines, and Bangko Sentral ng Pilipinas for the investment fund.
He warned of a possible increase in taxes and additional national debt if the government runs out of money for priority programs.
He also believes the timing of the bill is ‘poor’, as the country has to address other problems such as poverty, inflation, and poor quality of education.
“‘Yong mapupuntang dibidendo, ‘yan ay mawawala sa budget. Pupunta ‘yan sa Maharlika Investment Fund. Dalawa lang ang pwedeng gawin ng gobyerno para makabawi sa mawawala… We have to be prepared not only to pay not only a higher level of taxes at pagbabayad ng mawawalang pondo na mapupunta sa MIF,” Guinigundo explained.
With the absence of a surplus fund that will justify the investment fund, Guinigundo thinks MIF is a redundant measure as different government agencies have existing development funds to address programs that MIF will cover such as infrastructure projects.
Finance Secretary Benjamin Diokno, who was also a former BSP Governor, meanwhile downplayed these concerns calling them "panic."
RCBC Treasury Group chief economist Michael Ricafort meanwhile said the MIF could help grow the Philippines’ capital markets, including the PSE, if it allows for and succeeds in attracting more investors from the private sector and from abroad.
“It would add to economic growth, and eventually it would add to valuation,” Ricafort said.
However, Ricafort noted that if Maharlika does not push through, the government has other options it can use to fund development projects.
He said the government can tap official development assistance, bilateral and multilateral loans, as well as commercial loans.
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