JV Ejercito: Ensure PH economic stability before creating Maharlika Wealth Fund
December 08, 2022
Senator Joseph Victor “JV” Ejercito on
Thursday said lawmakers should consider the country’s economic situation and
the state of its reserves before pushing through with the creation of the
Maharlika Wealth Fund.
“We have to think about the timing. We have to
make sure that the economy is doing well, that our dollar reserves are high for
us to think about putting up this Maharlika Investment Fund,” he said in an
interview.
“The world’s economy, not only our country’s
economy, is struggling. We have to take that into consideration,” he added.
Ejercito took off from a bill that he
previously filed in the 17th Congress, which sought to create the Philippine
Sovereign Wealth Fund.
He explained that the initial funding for the
sovereign wealth fund that he proposed in Senate Bill No. 1764 was supposed to
come from the country’s reserves and surplus, which were backed by the “robust
economy” at the time.
“The sources of fund that were targeted during
that time was our reserves and our surplus, because at the time, our economy
was robust. Our economy was doing well,” he said.
He added that he wanted to optimize the use of
the country’s reserves since the Bangko Sentral ng Pilipinas (BSP) does not
have the mandate to participate in investments.
On the other hand, the Maharlika Wealth Fund
was first proposed in the 19th Congress by Speaker Martin Romualdez, Senior
Deputy Majority Leader Sandro Marcos, and several other lawmakers.
House Bill No. 6398 seeks to create a
sovereign wealth fund that the government can invest in real and financial
assets to stabilize the national budget, create savings for citizens, and
promote economic development.
More specifically, the fund hopes to ensure
the optimal asset allocation of funds from the government’s pension programs
and banks and attract direct investments.
In the initial proposal, the fund would source
its initial funding of P275 billion from the Government Service Insurance
System (GSIS), Social Security System (SSS), Land Bank of the Philippines
(LandBank), Development Bank of the Philippines (DBB), and the national budget.
This is widely considered as the most
controversial provision in the bill, triggering an uproar from lawmakers,
business groups, economic experts, and pensioners.
Moreover, subsequent annual contributions to the fund
would be provided by the BSP, Philippine Amusement and Gaming Corporation
(PAGCOR), the annual national budget, and other sources, such as public
borrowings and special assessments on natural resources.
