Some senators want further study on proposed Maharlika Wealth Fund

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Metro Manila (CNN Philippines, December 2) — Some senators on Friday said there is still a need to further study and answer questions regarding the proposed Maharlika Wealth Fund.

"We must first ensure the sovereign wealth fund is necessary and if so, we need to ensure that it is managed properly and the safeguards are in place so that it would not be misused or prone to corruption," Senate President Juan Miguel Zubiri said in a statement.

Zubiri added that he will form a group of senators — which will include Sonny Angara, Win Gatchalian, Grace Poe, Mark Villar and Alan Peter Cayetano, who are also chairpersons of relevant committees — "to study the proposal carefully and give the Senate feedback on the essence of the fund."

Earlier this week, House Speaker Ferdinand Martin Romualdez, senior deputy majority leader and Ilocos Norte Rep. Sandro Marcos, and four other lawmakers filed House Bill 6398, or the Maharlika Investment Fund Act seeking the establishment of a sovereign wealth fund for the Philippines to accrue profits of government assets.

Funds will be sourced from major pension funds and government banks, namely the Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines (Land Bank), and Development Bank of the Philippines (DBP).

RELATED: Lawmaker wants more safeguards in proposed Maharlika Investment Fund

Senate Minority Leader Koko Pimentel said in a statement that certain provisions of the bill have to be clarified. These include where the fund's seed money will come from, and who will manage the fund.

"It (seed money) must be surplus funds and it must be 'ours' meaning belonging to the Filipino people as a collective," he said.

While he has no objections to the proposed fund "in principle," Sen. Francis Escudero said he will study and scrutinize the bill to make sure that the best practices of other countries that are implementing this will be followed and mistakes will be prevented.

"Initially, the bill has to clarify what 'earnings' will be used to 'fund' what projects since the named incorporators (ie DBP, Land Bank, GSIS, SSS) also need to 'earn' from their investment in this fund, especially GSIS and SSS that fund the pension and social security of government and private employees, respectively," he added.

Sen. Joel Villanueva, meanwhile, said the measure could fund government programs to create more jobs for Filipinos.

Speaking to CNN Philippines’ The Source on Tuesday, Angara said he also sees the benefits of having such sovereign funds as seen in countries that successfully established such. This will also allow the country to maximize the returns of its underutilized assets, he noted.

“But any fund where you can engage in business and potentially lose is a high-reward and high-risk activity, so you must be aware of the risks and maybe there should be safeguards in place to manage these risks,” Angara noted. “These are portions of the salaries of our people so we should take a good look at how we take care of these funds,” he added.

As for Sen. Imee Marcos, she does not want retirement funds, remittances from overseas Filipino workers, and annual contributions of the business processing outsourcing or BPO sector included in the proposed wealth fund.

She instead suggested expanding the Government Financial Institutions (GFIs) Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act, a consolidated bill approved by the House Committee on Banks and Financial Intermediaries in August.

"Bakit di rin tayo mag-issue ng bonds and other financial papers...bakit hindi maglabas ng Kalinga sa Bayan bonds para sa ating mahihirap, may sakit, at sa lahat ng kapwa Pilipinong nangangailangan ng tulong?" the senator said.

[Translation: Why don't we issue bonds and other financial papers as well...why not release Kalinga sa Bayan bonds for the poor, the sick, and all indigent Filipinos?]

On Thursday, Finance chief Benjamin Diokno said the creation of the fund has secured a green light from President Ferdinand “Bongbong” Marcos Jr.