GSIS clarifies: Investible funds, not pension funds to be used in Maharlika proposal

ABS-CBN News

Posted at Dec 07 2022 04:02 PM | Updated as of Dec 07 2022 04:24 PM

MANILA - The head of the Government Service Insurance System (GSIS) on Wednesday clarified that investible funds and not pension funds will be used in the proposed sovereign wealth fund. 

GSIS President and General Manager Jose Arnulfo “Wick” Veloso said the Maharlika investment funds are going to use excess investible funds of the insurance company as opposed to reports that workers' funds will be used for this.

"All benefits that accrue will only go back to GSIS members," said Veloso during a public briefing.

"Hindi natin gagamitin ang pera ng ating mga pensiyonado, ang gagamitin po natin ay iyong perang mai-invest po natin," he added. 

GSIS, he said, posted some P1.5 trillion assets as of September 22 this year, which means they generate some P26 billion monthly. 

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The proposed measure wants the agency to allot P125 billion for the sovereign wealth fund, which he described as "small." 

This would enable them to "cherry pick" investments "that will suit our risk parameters and credit risk management parameters," as well as help employees benefit from the investments. 

"Gusto naming makita kung papaano namin maisisiguro na paglagay namin dito sa kumpaniyang Maharlika, makikita po namin ang lahat ng oportunidad ng imprastraktura dito sa Pilipinas," he said. 

Hounded by several issues on transparency, the proposed Maharlika Investment Fund 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 Land Bank of the Philippines
  • P25 billion from the Development Bank of the Philippines 
  • P25 billion from the National Treasury

The President will chair the government corporation that would handle the fund. 

MORE STUDY NEEDED 

A political analyst, meanwhile, viewed the sovereign wealth fund as another source of revenue for the government but admitted that it might not be the right time to set this up given the country's economic situation.

Froilan Calilung, a political science professor at the University of Santo Tomas, said it could help social services like housing and education. 

"That will be an additional revenue-generating mechanism for us na maaari rin naman nating magamit ulit to invest," Calilung said in the same briefing. 

"Ang mahalaga rito ay kung paano talaga isi-set ng ating gobyerno na unang-una ay maipaliwanag sa ating mga kababayan kung ano ba ang kahalagahan ng pagkakaroon ng isang sovereign fund."

But when asked if this is the best time to establish the sovereign wealth fund, he answered in the negative. 

The analyst said more studies should be done for its creation.

"A lot of people are saying that this is not a very good time considering that the people are actually, you know, having a hard time with inflation, the rising prices of commodities. So iyon nga eh, dapat balansehin natin iyon," noted Calilung.

"Ang akin siguro, maaaring maipasa pero kinakailangan dumaan sa masusing pagkilatis, masusing pag-aalam kung ano ba talaga iyong pros and cons nitong polisiya, nitong batas."

The proposed measure has been met with concern from some business groups, economists, activists and opposition figures, who questioned the need for a sovereign wealth fund in the debt-laden country.

They argue pension funds were already being invested and that diverting them to the MIF would expose them to additional risk.