SSS fund life wasn’t considered in Maharlika fund: Salceda

ABS-CBN News

Posted at Dec 02 2022 04:40 PM

MANILA - House Committee on Banks and Financial Intermediaries Vice Chair and. Albay 2nd District Rep. Joey Salceda said Friday the prospect of the Social Security System (SSS) funds running out was not considered when it was tapped to contribute to the proposed Maharlika Wealth Fund.

Salceda told reporters that the actuarial life is a separate issue that will be addressed by increasing the premium contributions of SSS members and employers.

“Hindi pa kasi ibang issue naman yun (Not yet because that's a separate issue). Ang isyung yun will essentially be addressed by increasing the premium SSS both by the employers and the employees," Salceda said. 

"It will increase the investible funds of SSS and therefore it can invest more, so, but basically ang problema nila napakababa po ng premium yun nga kailangan matagal na siansabi dapat. Itaas ang premium ng SSS napakababa po kasi ng premium kung minsan dahil ayaw po ng employer," he added. 

In a press release last May, the SSS announced its fund life is expected to last till 2054

Salceda meanwhile said the national government’s initial contribution of P25 billion and P50 billion every succeeding year is reasonable.

"Pag tinignan mo naman yung deficit natin ay pababa at yung atin pong debt-to-GDP (ratio) ay isa sa pinakabamababa sa mundo. I-compare mo sa ibang countries na ang mga debt-to-GDP ay 100 percent pataas atin eh nasa 60 lang,” Salceda said.

Salceda said "kaya po ng gobyerno na mag invest dito sa Maharlika investment fund.”

As of the end of June, the country's debt-to-GDP ratio was at 62.1 percent, easing slightly from a high of 63.5 percent earlier this year. 

Pre-pandemic, a debt-to-GDP ratio of 60 was already considered high. But economic managers said the country's debt status remains manageable.

Finance Secretary Benjamin Diokno said the country has the money to back the funds. 

 

 NOT THE NEXT 1MDB 

Salceda reiterated that there are enough safeguards to keep the proposed sovereign wealth fund from going the way of Malaysia’s failed 1MDB.

Analysts have pointed out that sovereign wealth funds, in order to be successful, must be managed well and must be free from corruption. Otherwise, it could end up in a financial crisis such as Malaysia's 1MDB.

Salceda said Malaysia's 1MDB issued government-guaranteed bonds while Maharlika will get infusion from government financial institutions (GFIs) such as GSIS, SSS, LBP and DBP. It will also be created by law and not by the Department of Finance, he added.

Maharlika will be governed by GFIs and will be overseen by Congress with an advisory board composed of economic managers. It will also be covered by the central bank regulation and can be subject to the Commission on Audit, Salceda said.

"We also insisted na yung kung anuman ang investment ng SSS, GSIS na yung exposure nila to the fund will be disclosed in their annual reports to their pensioners and to their members,” Salceda said.

“The practices of the 1MDB were not subject to regular oversight. Dito, there are 4 layers of audit for the Maharlika investment fund including an internal auditor, an external auditor and a COA,” Salceda said.

House Deputy Minority Leader France Castro on Thursday sought the inclusion of a "penalty clause" in the sovereign wealth fund to make erring fund managers accountable. 

She also raised concerns over the use of public funds for risky investments.

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