Billionaires should invest in Maharlika fund, not workers: group


Posted at Dec 05 2022 09:55 AM

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Here's a proposal for lawmakers: Instead of tapping workers' funds for a sovereign wealth fund, why not tax billionaries and use their money for the Maharlika Investment Fund? 

This is the proposal of Atty. Sonny Matula, Nagkaisa Labor Coalition chairman, after House Speaker Martin Romualdez led several lawmakers in filing House Bill 6398 seeking the creation of a sovereign wealth fund, dubbed as the Maharlika Investment Fund.

Speaking to ABS-CBN's TeleRadyo, Matula questioned the wisdom and timing of the wealth fund considering the Philippines does not even have surplus funds to invest. 

Under the proposal, the 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

President Bongbong Marcos will be the chairperson of the government corporation that will handle the fund. 

Most sovereign wealth funds are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.

In the case of Norway and Singapore, the wealth funds come from surplus revenues of the Norwegian petroleum sector and surplus from Singapore investments in trade, Matula said. 

"Ang Pilipinas malayong-malayo. Wala tayong surplus. Sabi nga ng mga kaibigan ko na kabalintunaan na mag i-invest tayo e wala tayong surplus," he said. 

He added: "Palagay ko hindi pa napapanahon ito. Kung kailangan talaga ng sovereign fund, huwag na natin isama yung pera ng mga manggagawa sa GSIS at SSS."

Matula noted SSS and GSIS funds come solely from workers and employers' contributions. "Ito po'y hindi pera ng gobyerno kundi kontribusyon ng mga manggagawa at employer," he said. 

Instead of using workers' funds, he said lawmakers should instead impose a wealth tax on the country's billionaires for the sovereign wealth fund. 

"Yung mga bilyonaryo natin pwede siguro sila," he said. 

Finance Secretary Benjamin Diokno earlier said the Philippines has the money for a sovereign wealth fund despite its tight fiscal conditions including a budget deficit and elevated debt. 

"There is already a commitment from GSIS, SSS, DBP, Landbank and National Government. We have the money for it," Diokno said. 

Political economist Calixto Chikiamco, however, said it may not be the right time yet to put up a sovereign wealth fund. 

"It will be funded from state pension funds and government funds. The risk is that investment decisions may be politicized as it was in Malaysia. We can't rely on the country's poor rule of law to expect accountability from management," he said. 

Chikiamco said "no amount of good governance principles or number of independent directors" can protect the fund from mismanagement if there is no "rule of law" in the country.

"There can be no accountability if management or the board believe they can get away with it. Heck, in this country, even convicted criminals enjoy the high life in Bilibid. Yes, let's set up a sovereign wealth fund when we already have a rule of law in this country, but not before," he said. 

Based on data from the Bureau of Treasury, the national government’s budget deficit hit P99.1 billion in October, up 54.08 percent. 

The year-to-date total of P1.1 trillion, however, is lower than the P1.2 trillion shortfall from the 10-month period in 2021. It is also only 67 percent of the P1.7 trillion full-year target for 2022, data showed.