GSIS chief: Maharlika Wealth Fund will use investible funds, not members' pensions

enablePagination: false
maxItemsPerPage: 10
maxPaginationLinks: 10

Metro Manila (CNN Philippines, December 5) — The proposed Maharlika Wealth Fund (MWF) will be seeded by investible money and not with the pensions of its members, the president of the Government Service Insurance System (GSIS) said Monday.

“Hindi po pensiyon. Ang binubuo po namin dito ay [It’s not the pension. What we will use here are] investible funds that are supposed to earn money for us to fulfill our obligation to our stakeholders,” GSIS president and general manager Jose Arnulfo “Wick” Veloso told CNN Philippines’ News Night.

The rate of contribution payable by a GSIS member and the government agency shall be 9% and 12%, respectively, based on the member's actual monthly salary.

Veloso explained that upon the retirement of a member, the GSIS will give 90% of the average of the member’s overall contribution. The state pension fund accounts for 69%.

“Saan po namin kukunin yung balanse na 69%? Kung hindi mag-invest at kumita ang pera… Kaya dun sa mga nangangamba, iniisip na gagamitin yung pera ng ating retirees, ay hindi po. Ito’y ating ini-invest talaga,” he said.

[Translation: Where will we get the 69%? We invest so the money can earn. That's why those who are worried, thinking that the money of our retirees will be used, it won't. We really invest it.]

Veloso emphasized that the investible funds originate from the money that is left after the GSIS pays all costs associated with maintaining members' pensions and benefits.

“Ang investment po ng GSIS ay mula sa aming ini-invest na pera after deducting all the expenditures for servicing pensions and benefits. Ang natitira pong pera diyan ay parati ho naming ini-invest,” he said.

[Translation: The GSIS investment asset is from our accumulated funds after deducting all the expenditures for servicing pensions and benefits. The rest of the money, we always invest.]

Veloso’s remark mirrored former president and House Deputy Speaker Gloria Macapagal-Arroyo’s statement that the MWF will be financed by investible funds of government financial institutions “to maximize returns and generate funds that contribute to or supplement the financial resources at the disposal of the government for programs and projects that benefit the Filipino people.”

‘Investment vehicle’

Veloso, along with the country’s economic team, deemed the proposed sovereign wealth fund an “investment vehicle” towards national development, as the government proposes it would use it to invest in businesses in return for more jobs and a better economy.

“Gusto ho namin makatulong mag-invest (sa mga business) para lumago, makapagbigay sila ng mas maraming trabaho. [We want to help invest in businesses so they can provide more jobs.] More jobs is equal to more taxes, better economy,” the GSIS official said.

Veloso further said that the MWF board would be composed of independent directors to "protect the interest of the minority."

He also pointed out that the MWF would provide checks and balances to ensure the money of its members is invested wisely.

“There are specific levels by which management is alarmed that your investment is coming off and then you make a decision whether you continue investing or cut your investment to prevent you from falling in a cliff,” Veloso said.

As for the criteria in selecting companies the MWF would invest in, the official said there will be a defined mandate to determine which sector is critical for national development. 

Despite the proposed precautions, fears from critics in various sectors hound the MWF, particularly concerns that the contributions of wage earners may be put at risk.

READ: Groups protest vs proposed Maharlika Wealth Fund

READ: Some senators want further study on proposed Maharlika Wealth Fund