Alarm raised over Maharlika Fund

ACT party-list Rep. France Castro on Saturday said that the Makabayan bloc in the House of Representatives will scrutinize the legality of the proposed Maharlika Investment Fund, calling “dubious” the hasty approval of the measure which will use billions of funds from the Government Insurance Security System (GSIS) and Social Security System (SSS).

“We are studying to question the legality of the proposed measure. The bill was only discussed last Monday. There were only two TWGs (technical working groups) and after that, it was returned to the mother committee and approved last Thursday. It will be referred to two more committees, the Committee on Appropriations and Committee on Ways and Means. They target to pass it by next week,” Castro said in a radio interview.

On Thursday, the House Committee on Bank and Financial Intermediaries approved House Bill (HB) 6398 on the proposed P275 billion Maharlika Wealth Fund Act.

Under the bill, at least P125 billion of the Maharlika Wealth Fund Act will be sourced from the GSIS, P50 billion each from the SSS and Land Bank of the Philippines, and P25 billion each from the Development Bank of the Philippines (DBP) and Treasury of the Philippines.

Castro noted that a budget of more than P1 trillion was already allocated for the government’s Build, Build, Build program in 2023.

“Are they trying to salvage bankrupt businesses of friends and cronies just like what happened in the past? There is even a possibility that they will invest the money abroad, so the objective of this proposed bill is dubious. It will not even benefit the people,” Castro added.

She said that the minority bloc in the House of Representatives has already met to oppose the measure.

“We at the Makabayan bloc and even the minority bloc already discussed our move. That is why [Northern Samar] Congressman [Paul] Daza raised many questions, and we will bring our campaign at the plenary session. We will engage and interpolate so that the public will know everything about the Maharlika Fund. We cannot stay silent while the proposed Maharlika Fund is passed,” Castro added.

She noted that the struggling SSS has yet to release P1,000 additional benefits for pensioners, and then here’s a bill mandating that it must give at least P50 billion of its money to the Maharlika Fund.

“The SSS said it has no money for the additional P1,000 for 3.1 million pensioners approved during the time of former president Rodrigo Duterte, and yet they are saying they can give P50 billion for the Maharlika Fund,” Castro said.

Castro also disagreed with the composition of the 15-member board that will manage the Maharlika Fund of which two will come from the private sector.

“The 15-member board will decide where to use the funds and how much will be allotted per investment. There is no assurance that if the private sector will manage, there will be no corruption and mismanagement, That is our worry. This is a public fund,” she said.

Castro noted that there is no penalty provision in the proposed measure in case there is mismanagement and corruption in the use of Maharlika Funds.

Meanwhile, Albay Second District Rep. Jose Ma. Clemente “Joey” Salceda assured Sen. Maria Imelda Josefa “Imee” Marcos that the proposed Maharlika Investment Fund will still go through tedious deliberations in both the Senate and the House of Representatives.

Senator Marcos, sister of President Ferdinand “Bongbong” Marcos Jr., is among the critics of the P275 billion wealth fund, particularly its planned use of GSIS and SSS money.

“The bill will still go through deliberations in both Houses and the Senate, I believe, has already constituted a study group on the matter. We can discuss the mix of assets that the fund will invest in, but some allocation for foreign securities is necessary. It diversifies the portfolio and allows the Fund to take positions in potentially higher-return investments.

“A fund that grows faster due to some exposure to high-return foreign investments is better than a smaller and severely constrained Fund exclusively investing in domestic investments,” Salceda said.

“I am sure Senator Marcos will also be very active in discussions once the Senate begins hearings on the bill,” he added.

Nagkaisa, the biggest alliance of labor groups and workers’ organizations in the country, also opposes the creation of the Maharlika Wealth Fund.

“If sovereign wealth funds (SWFs) should be pursued, it must be funded by true surpluses generated by the economy — the proceeds from wealth tax,” said lawyer Jose Sonny Matula, also the chairman of Nagkaisa chairman and president of the Federation of Free Workers, in a statement.

Matula warned that public pension funds are fragile, adding that there is a reason the SSS and GSIS are very careful in their investment decisions.

“That is because that is how they secure future generations of Filipinos,” he said.