MANILA (UPDATE)— Only excess funds of the Government Service Insurance System will be invested in the proposed Maharlika Wealth Fund once it is approved by lawmakers, the head of the state-run pension fund for government workers said Tuesday.
The GSIS has committed to provide P125 billion in seed money for the sovereign wealth fund.
"Our assets under management are P1.5 trillion at nagkokolekta kami ng P26 billion a month," GSIS president and general manager Wick Veloso told ANC's "Headstart".
"Matapos naming maibigay ang aming obligasyon sa aming mga miyembro ay kailangan naming ma-invest, and we have a rigorous policy of investment."
Being part of the governing board of the sovereign wealth fund will allow GSIS to ensure the same credit standards are applied, he said.
Veloso has recommended inviting the Philippine Stock Exchange and Bankers Association of the Philippines to the board to ensure that the investments would be safe and secure.
For him, the state pension fund needs more opportunities to invest and earn better returns.
"Funds are being invested. Returns will accrue to the members," he said. "This will benefit them and that's what we're actually doing."
Labor and business groups have joined the growing opposition to the proposed MWF.
Under the proposal, the MWF will get allocations from the following government financial institutions:
- P125 billion from Government Service Insurance System
- P50 billion from Social Security System
- P50 billion from the Land Bank of the Philippines
- P25 billion from the Development Bank of the Philippines
- P25 billion from the National Treasury
In a statement, the Makati Business Club, Management Association of the Philippines, UP School of Economics Alumni Association and others said they do not support the proposed sovereign wealth fund on the principles of fiscal prudence, solvency of social pension funds and contingent liabilities.
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They said the Philippines has neither commodity-based surplus funds nor surpluses from external trade and state-owned enterprises that need to be deployed.
The country is also experiencing large deficits reflected by the decline in international reserves, the groups said.
They added that GSIS and SSS funds belong to members and should not be exposed to higher-risk investments.
National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon, meanwhile, said it is important that the leaders who would handle the funds are trust-worthy.
Edillon noted that those who would invest in the sovereign wealth fund could have "bigger benefits" and profits despite restrictions for the initial list of fund sources so far.
"Mas malaking return ng kanilang investment, pero a lot has to do with the pamamalakad ng fund na ito," said the official during a televised briefing.
"We really need to make sure that we really get the competent people na may integridad, kasi malaking bagay rin na kailangan yun sila ang pagkakatiwalaan natin sa pera natin. So kailangan na yung mga magagaling at mapapagkatiwalaan," she added.
Malacañang has yet to issue a statement on whether or not President Ferdinand Marcos, Jr. is in favor of creating the fund.
The Bangko Sentral ng Pilipinas on Monday said it is concerned over the effect of the Maharlika fund on the country's gross international reserves, as well as the central bank's supervision of banks and other financial institutions.