MANILA - The government must first decide on the kind of sovereign fund it wants and the purpose for its creation before turning it into law, an economist said on Wednesday.
The purpose of the Maharlika Investment Fund must be clear among the proponents and the President, but in its current state, "there is no unanimity of purpose" behind the different sponsors, International Investment Banker Stephen Cuunjieng told ANC.
"We need to have a debate first on what we want it to be," he said.
Different forms of investments require different expertise. Returns and risks also differ depending on what the government wants to accomplish, he said.
"If I look at the law as drafted and Cong. [Joey] Salceda, [Martin] Romualdez and [Sandro] Marcos are saying we need to have foreign assets to make this, to make that. What are you trying to make? You want to have an asset management company, which will invest domestically and internationally in public equities and debt, do you want a private equity which will take stakes in unlisted companies to help them grow or spur development," Cuunjieng said.
"These are issues that need to be analyzed to discuss. What do we want this initiative to accomplish - development, return, investment, domestically, internationally, listed, unlisted - let us start with the broader issue of what we want this to do," he added.
The bill, which is currently being scrutinized by lawmakers, has received opposing views, especially since the proposed funds will come from the Government Insurance Service, Social Security System, state-owned banks and other government financial institutions.
Some analysts have said that a sovereign wealth fund must be managed well and free of corruption to be successful. Supporters of the measure said the fund would help the government complete more projects.
Meanwhile, House Deputy Minority Leader France Castro earlier called for the inclusion of a "penalty clause" in the bill to make erring fund managers accountable.
The Bangko Sentral ng Pilipinas, which under the proposed law must make regular contributions equivalent to 10 percent of remittances from overseas Filipinos or roughly $3 billion, is concerned about the fund's impact on the country's gross international reserves (GIR) level, BSP Monetary Board Member Bruce Tolentino said.