SSS, GSIS may still contribute to Maharlika fund, subject to board approval: Diokno

Jessica Fenol, ABS-CBN News

Posted at Dec 09 2022 02:44 PM | Updated as of Dec 09 2022 04:09 PM

MANILA — Finance Secretary Benjamin Diokno on Friday said the Government Service Insurance System and the Social Security System, which were removed as funding sources for the Mahalika Wealth Fund, may opt to contribute in the future. 

In a televised briefing, Diokno said the 2 agencies could still contribute to the fund in the future if they want bigger returns.

"They are looking for higher returns because right now most of their money is invested in treasury bills, they don’t earn that much," the Finance chief said. 

"If they want higher return, they may decide to contribute but that is up to their respective boards of GSIS and SSS," he added.

GSIS and SSS were dropped from capital sources after the bill received criticism for the proposal to use pension funds in risky investments. It was also called "unconstitutional." 

The sovereign wealth fund, initially pegged to be worth about P250 billion, will source funds from other government financial institutions in the absence of GSIS and the SSS. 

Diokno said initial capitalization will come from the Landbank of the Philippines, and the Development Bank of the Philippines for P50 billion each. 

In the first 2 years following the enactment of the law, the Bangko Sentral ng Pilipinas will also contribute 100 percent of its declared dividends.

In 2019, the BSP declared P23.05 billion dividends, followed by P15.89 billion in 2020 and P17.41 billion in 2021, Diokno said.

But political economist Calixto Chikiamco flagged risks in getting the funds from the BSP.

"Not only will this delay the increased capitalization of the BSP to P200 billion as provided for in its Charter, but this will undermine the mission and integrity of the Central Bank because income objectives will drive monetary and exchange rate policy," Chikiamco said. 

— With a report from Warren De Guzman, ABS-CBN News

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