Senior Deputy Speaker and Pampanga Rep. Gloria Macapagal-Arroyo on Monday defended the proposed Maharlika Wealth Fund (MWF) from its critics, saying President Ferdinand Marcos Jr. was ultimately responsible for managing the country’s first sovereign READ:
saying President Ferdinand Marcos Jr. was ultimately responsible for managing the country’s first sovereign wealth fund.
Even in the Philippines, the idea is not new, the former President said. She recalled that then-Senator Paolo Benigno Aquino filed a bill to create such a fund in 2016.“Once the Fund is operational, the President will also be able to count on advice from the Department of Finance, the nation’s steward of sound fiscal policy,” Arroyo added.
“I think part of the reason was that, of course, it’s been politicized, but the whole point of this exercise is that this corporation will be free from politics. That’s why it needs to be run by technocrats; they have no interest in politics,” the young lawmaker said, adding that the fund would last beyond his father’s six years in office.
However, Bangko Sentral ng Pilipinas officials said they were concerned over how the Maharlika fund may impact the central bank’s management of the country’s gross reserves and its supervision of banks. The Fed’s rate hikes are blamed for weakening the peso, which plunged to as low as P59 to the US dollar in early October.
The team underscored the benefits of institutionalizing the proposed fund during the 183rd Development Budget Coordination Committee meeting held Monday at the DOF Press Conference Room. However, business groups and the academe jointly spurned House Bill No. 6398 that aims to create a P275-billion sovereign wealth fund by siphoning off funds from two of the country’s major sources of investable funds.
These groups asserted that the Philippines has neither commodity-based surpluses nor surpluses from external trade and state-owned enterprises from which the government can tap as source for the fund. The business groups said the MWF is not relevant at this moment for lack of resources that will support its creation.
The groups also said the funds of the Government Service Insurance System and Social Security System belong to their members, and pension funds are intended to pay for pension liabilities, benefits, salary, and housing loans of their members. “Instead of putting in more capital to the BSP, the SWF bill deprives it of quicker capitalization and in the process, undermines the BSP’s independence and its ability to discharge its role as the country’s central monetary authority and systemic risk regulator.”
Philippine Chamber of Commerce and Industry President George Barcelon, meanwhile, said this type of investment may cast doubts and affect the country’s credit rating. Albay Rep. Joey Sarte Salceda, the panel’s chairman, said the tax provisions approved were those drafted by the tax committee’s team and were already adopted in the technical working group prior to the meeting. Salceda’s panel has recommended the bill for plenary action.
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