Manila - The Philippine government should consider holding off in launching a sovereign wealth fund to protect its credit rating amid the challenging global environment, a business group president said on Monday.

Lawmakers have filed a billing seeking to create the Maharlika Wealth Fund that will use funds from government agencies such as the Government Service Insurance System (GSIS) and the Social Security Service (SSS).

Although the fund has received the backing of Finance Chief Benjamin Diokno, analysts have said it could only be successful if managed well and free of corruption.

Philippine Chamber of Commerce and Industry President George Barcelon said this type of investment may cast doubts and affect the country's credit rating.

"My concern is, to put this on the back burner, in the meantime, because we don't want to go into something that might effect our credit standing," Barcelon said.

"Our credit standing, the foundation laid by the previous administration has been carried forward and I think that's important for us because with a good credit standing we do get preferential or lower rates of foreign banks. That, I think, is more important for us, to maintain a good credit rating, not putting something that might give worldwide bank to entertain doubts about whether this will really fly or not," he added.

• Diokno says PH has money to back proposed Maharlika Sovereign Wealth Fund

Credit rating agencies Moody's Investor Service, S&P Global and Fitch Ratings have kept the country's standing despite the heavy borrowings during the COVID-19 pandemic while most countries suffered from downgrades in recent years.

This highlights the country's capacity to pay and its sound macroeconomic fundamentals, economic managers have said.

• Moody's affirms Philippines Baa2 ratings with 'stable' outlook
• S&P Global affirms Philippines' BBB+ rating with 'stable' outlook
• Fitch keeps Philippines' BBB credit rating with negative outlook

Barcelon also cited liquidity issues that may impact the funds of financial institutions whose funds will be used.

Other lawmakers also called for the inclusion of a penalty clause to make erring fund managers accountable.

• Lawmaker seeks safeguards, 'penalty clause' in proposed Maharlika wealth fund

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