Romualdez seeks sovereign wealth fund for PH

RG Cruz, ABS-CBN News

Posted at Nov 28 2022 10:37 PM

House Speaker Martin Romualdez has led several lawmakers in filing House Bill 6398 seeking the creation of a sovereign wealth fund, dubbed as the Maharlika Investment Fund.

"Sovereign Wealth Funds are state-owned investment funds typically financed by a country’s surplus revenues or reserves. Governments invest these funds in an array of both real and financial assets to stabilize national budgets, create savings for their citizens, or promote economic development,” the bill’s explanatory note said.

The bill explained that the MIF would give government financial institutions (GFIs), such as the Government Service Insurance System (GSIS), the Social Security System (SSS), the Land Bank of the Philippines (LBP), and the Development Bank of the Philippines (DBP), the opportunity to ensure their respective funds' “optimal asset allocation” while ensuring that resources are efficiently channeled to valuable investments.

The bill cites the example of Singapore’s sovereign wealth funds which provide the financial means for Singapore to manage its foreign reserves, defend itself and protect its sovereignty without compromising its domestic program, and augment its land-limited economic space with global investments.

The bill said SWFs can also be used to attract direct investments, which is what the Indonesia Investment Authority (INA) did.

“By attracting foreign co-investors to capitalize the fund rather than rely on commodity revenues, the INA has been very successful in bringing in much-needed investments in infrastructure and emerging industries, ultimately spurring growth in Indonesia. such as investments in transportation, including airports, supply chains, logistics, digital infrastructure, the green economy, healthcare services, the financial sector, technology, and tourism.” The bill also stated.

To ensure transparency and accountability, the MIF will adhere to the 24 Generally Accepted Principles and Practices (GAPP) agreed to in October 2008 in Santiago, Chile, which states among others that the SWF will comply with all applicable regulatory and disclosure requirements in the countries in which SWFs invest; and that the SWF will have in place a transparent and sound governance structure that provides adequate operational controls, risk management, and accountability, among other commitments.

Other authors of the measure are House Majority Leader Manuel Jose Dalipe, senior Deputy Majority Leader Ferdinand Alexander A. Marcos, Tingog party-list Reps. Yedda Marie Romualdez and Jude Acidre, and Marikina City Rep. Stella Luz Quimbo.

A separate press release stated that the MIF is patterned after the SWFs of 49 countries, including Singapore, China, Hong Kong, South Korea, Malaysia, Indonesia, Taiwan, Vietnam, and East Timor. 

The same release said that under the bill, the envisioned MWF would have a governing board, composed of nominees of the contributing GFIs, which would in charge of managing the fund. The board would include two independent directors.