GSIS, SSS allay concerns over ₱175-B investment in Maharlika Wealth Fund

Metro Manila (CNN Philippines, December 1) — Officials of the two state-owned pension funds for private and public sector employees allayed concerns over their plan to invest a combined ₱175 billion in a proposed Philippine sovereign wealth fund, saying the income derived from it will benefit the country.

Government Service Insurance System (GSIS) President and General Manager Jose Arnulfo Veloso told lawmakers at the hearing of the House Committee on Banks and Financial Intermediaries that the state-owned pension fund has parameters set to ensure the money of its members is invested wisely.

"Pag tayo'y mag-iinvest, ang objective natin ay kumita pa nang mas malaki sa hurdle rate na ating kailangang kitain na binanggit na 7.6% for GSIS," he said. "Pag tayo ay nagkaroon ng strength in numbers, different GFIs [government financial institutions], all seated in one table, investing in a common agenda which not only allows us to focus and train our guns on high revenue potential businesses, but at the same time help in nation building," Veloso said Thursday.

[Translation: If we invest, our objective is to profit even more than the hurdle rate that we need to earn, which was said to be 7.6% for the GSIS. If we can get strength in numbers, different GFIs, all seated in one table…]

Social Security System (SSS) President and CEO Michael Regino backed the proposal for different GFIs to come together under the Maharlika Wealth Fund (MWF).

"These are both an opportunity for us to be able to use our funds na collectively with other GFIs para mapataas pa natin ang returns ng pera in-invest natin," said Regino.

[Translation: …with other GFIs in order to increase the returns of the money we invest.]

House Bill 6398 filed by Speaker Martin Romualdez, Ilocos Norte Rep. Sandro Marcos and four other lawmakers proposes the creation of a Philippine Sovereign Fund, which will be called the Maharlika Investment Fund (MIF). The House Committee on Banks and Financial Intermediaries has approved an amendment renaming the MIF to MWF.

The sovereign wealth fund's initial investment of ₱250 billion will come from the GSIS (₱125 billion), SSS (₱50 billion), Land Bank of the Philippines (₱50 billion), and Development Bank of the Philippines (₱25 billion).

However, Makabayan bloc lawmakers weren't sold on the MWF.

"Bago tayo mag-isip ng mga ganitong investment et cetera na 50-50 naman ang chance natin, itong 3.1 million na additional na pension sana na matagal nang hinihiling ng ating mga nakatatanda na mga pensioner, hindi niyo mapondohan," ACT Teachers Party-list Rep. France Castro said.

[Translation: Before we think about an investment like this that's 50-50, what about the 3.1 million additional pensions that senior citizens have been waiting a long time for, this hasn't been funded.]

Kabataan Party-list Rep. Raoul Manuel also questioned the hasty approval of the measure, describing it as having been "railroaded."

"Nabasa on first reading at na-irefer sa committee ang panukalang batas noong Lunes, Nov. 28, tinalakay kaagad ng komite noong Martes, Nov. 29, at target na maaprubahan bago matapos ang session ng Kongreso sa Dec. 15. Pero ang mga panukalang batas na kailangan ng mamamayan ay nakatengga pa rin kahit nai-file ilang linggo o buwan na ang nakaraan," Manuel recalled.

[It was filed, first read, and referred to the committee on Monday, Nov. 28, tackled by the committee on Tuesday, Nov. 29, and its approval is being targeted before Congress ends sessions on Dec. 15. Meanwhile, other bills needed by our citizens are stagnant even though they were filed weeks or months ago.]

Finally, Gabriela Rep. Arlene Brosas lamented the state of the country's pension systems.

"We have the second worst pension system in the world ayon sa (according to) Mercer CFA Institute's Global Pension Index," Brosas began. "Sa usapin pa lang ng pagbibgay ng tamang benepisyo at paghahabol sa delinquent employers, marami nang usapin. Tapos papasukin pa natin itong panukalang Maharlika Fund. We fear that we are setting up workers' hard earned money into a major disaster."

[Translation: On the topic of giving workers their benefits and running after delinquent employers, there is still a lot to talk about. Now, we are entering this proposed Maharlika Fund.]

The House Banks and Financial Intermediaries panel approved HB 6398 or the MWF at the committee level on Thursday.