MANILA — The time is "not ripe" for the Philippines to use pension funds as contributors to a sovereign wealth fund, one of the proponents of the bill creating the Maharlika Investment Fund said Thursday.
Congressional leaders have decided to revise the proposed law after concerns were raised over potential corruption and risks to workers' pensions.
"Admittedly, we started on the wrong foot. This bill was prepared by the economic managers and of course, we assumed there was proper or sufficient consultation with the stakeholders," Marikina City 2nd District Rep. Stella Luz Quimbo admitted told ANC's "Headstart".
"Lo and behold, we started to hear the bill and... we realized na kulang talaga ang consultation.
"Obviously, at this point in time, it’s not ripe for us to include GSIS and SSS as a fund contributor," added Quimbo, senior vice chairperson of the House appropriations committee.
Authors of House Bill No. 6398 or the Maharlika Investments Fund Act will drop GSIS and SSS as contributors to the sovereign wealth fund, which was to have been seeded by government-run banks and pension funds.
They will also no longer allot money for the MIF in the national budget.
The proposed law, aimed at raising capital for big-ticket development projects, had stoked anger among activists and opposition figures, as well as concern from business groups.
Conventional sovereign wealth funds are seeded by windfall government profits from natural resources, such as oil or minerals, rather than money from pension funds.
Business groups said the government was already running huge budget deficits and the proposed law risked downgrading its credit rating.
Critics also questioned the plan to designate the president as head of the fund's board.
House leaders have discussed a new version of the bill that was drafted by the president's economic advisers, which will be tackled by the House appropriations committee on Friday, Quimbo said.
Lawmakers will "put in place safety nets" to ensure government funds are safeguarded, she added.
"The concept is good. We just approved a P5.268 trillion national budget pero kulang na kulang yan," Quimbo said.
"We need a way to generate more funds and this is precisely why this bill was filed.
"It's a way to take surplus funds from GOCCs [and] GFIs, and put it into an investment vehicle and by pooling the funds, you're able to get a more diversified portfolio and get higher return," she added.
— With a report from Agence France-Presse