MANILA (UPDATED) — Sen. Sonny Angara wants "limitations" on how the government may use the proposed sovereign wealth fund that will be seeded from pension funds and government banks.
In an ANC interview on Wednesday, the senator noted that investing pension funds is a "high-risk, high-reward activity."
"Importante na maingat ho tayo diyan because precisely these are trust funds. These are people's hard-earned money," said Angara, chairperson of the Senate Committee on Finance. "There should be limitations on what the government can spend on."
(It's important that we are careful there.)
Angara said other countries such as Norway and Qatar could "afford to be a little more adventurous" with their sovereign wealth funds because these tapped oil and gas revenues.
"But in the case of the Philippines, these GSIS, SSS funds are guaranteed by the national government, guaranteed by taxpayers' money and funded by the employee-employer contribution to SSS," he said.
The "Maharlika Investments Fund" would be seeded with P275 billion from government financial institutions, including 2 pension funds and 2 banks, according to the latest version of the bill.
It would help the Marcos administration achieve its goals of getting the Philippine economy to "soar to greater heights in spite of external shocks", its proponents said.
Under the proposed bill, MIF funds would be "exempt from any regulatory restrictions".
Investment options would include financial derivatives, equities, infrastructure projects and "other investments as may be approved by the Board".
The MIF 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.
Atty. Chel Diokno, chairman of the Free Legal Assistance Group, warned that the proposed wealth fund could violate a law that limits the use of SSS funds.
He noted the SSS law states, "No portion of the Investment Reserve Fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or controlled corporations, except as may be allowed under this Act."
Diokno added another law also limits the use of GSIS funds.
— With a report from Agence France-Presse