Department of Budget and Management (DBM) Secretary Amenah Pangandaman on Wednesday assured critics of the proposed Maharlika Investment Fund (MIF) that lawmakers continue to “fine-tune” the proposed bill based on their sentiments.
During the “Kapihan sa Manila Bay” media forum, Pangandaman allayed concerns over the proposed sovereign wealth fund, saying it will undergo public consultations as part of the legislative process.
“Nakikita naman natin (We saw) democracy at work. The first version, yung mayroon pang GSIS (Government Service Insurance System) and SSS (Social Security System), nakinig naman yung ating mga legislators di ba (Our legislators listened and dropped the provision using the GSIS and SSS as fund sources in the first version of the bill),” she said.
In the latest iteration of the proposed bill creating the MIF, its initial capitalization was cut to just PHP110 billion from PHP275 billion after the House leadership dropped the GSIS, SSS and the national budget from its fund sources.
“Now they’re fine-tuning the bill. At least marami na rin yung nakukuha nating (we are getting more) positive response from the creation of the fund,” she added.
She appealed to critics to “respect the process of legislation”, adding that it will still have to undergo tedious scrutiny before it reaches the bicameral conference committee.
“…The version that we have now, that they’re going to pass is a result of the consultation from the public…After sa House, pupunta pa ‘yan sa Senado (it would go to the Senate), and there will be committee hearings, publication consultations, marami pang mangyayari (much more will happen),” she said.
Since 2020
Meanwhile, Pangandaman said there is a “lot of literature” about the establishment of a sovereign wealth fund so the concept of such a fund is not new.
She said the Asian Development Bank (ADB), International Monetary Fund (IMF), World Bank and Milken Institute have been consulted over the years as the previous administration came up with the idea of establishing a sovereign wealth fund.
She noted that the Bangko Sentral ng Pilipinas (BSP) came up with the idea as early as 2020, following the founding of the Indonesia Investment Authority (INA).
Although the BSP had previously consulted with the ADB and IMF on establishing a sovereign wealth fund, they were initially advised against having the central bank establish the fund, as it would fall outside its mandate.
She said the country’s economic managers continue to meet with international development organizations to learn the best practices in developing its own sovereign wealth fund.
“Just this morning, part of our TWG was in a meeting with the Milken Institute of Singapore. They will release soon a report and I think the report will say ‘The time is now, we don’t have to wait for it to start and create our own sovereign wealth fund’,” she said.
Safeguards
Pangandaman also underscored that safeguards are in place to uphold accountability and transparency in managing the MIF, such as the provision to abide by the Santiago Principles of the International Working Group of Sovereign Wealth Funds and an executive department reportorial requirement which will be implemented together with congressional oversight.
“Any measure, program or law that will help our budget given our limited [fiscal] space right now is welcome news for me and the DBM. So, we will support the creation of the wealth fund,” she said.
On Sunday, President Ferdinand R. Marcos Jr. expressed support for the creation of a sovereign wealth fund, saying it would be too early to debate the provisions that could eventually be removed while the bill is being refined.
“Let’s not debate until we see the final form because we could be debating about provisions that no longer exist. So antayin natin kung ano’ng gagawin ng legislature (So let’s wait what the legislature will do),” he said told reporters onboard a flight to Brussels, Belgium.
He also appealed to critics to give lawmakers a chance to create a “perfect” version of the proposed Maharlika fund.
“We’re just doing the regular process of looking at the bill. Well, not we. It’s the legislature. So let them do their jobs. Tama ‘yan. Para gawin nilang (That’s right. So they can make it) perfect,” he added.
House Bill 6398, introduced on Nov. 28, seeks to establish a Philippine sovereign wealth fund patterned after the successful sovereign wealth funds all over the world.
It aims to ensure economic growth by generating consistent and stable investment returns with appropriate risk limits to preserve and enhance long-term value of the fund; obtaining the best absolute return and achievable financial gains on its investments; and satisfying the requirements of liquidity, safety/security and yield to ensure the profitability of the government financial institutions’ respective funds. (PNA)
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