BSP chief joins concerned groups on Maharlika Fund

Primarily pushed by House Speaker Rep. Martin Romualdez and Deputy Majority Leader Sandro Marcos, HB 6398 proposes to use pension funds under the Social Security System and Government Service Insurance System, as well as funds of state-owned Land Bank of the Philippines and Development Bank of the Philippines, as seed capital for the Maharlika Wealth Fund
BSP Governor Felipe M. Medalla
BSP Governor Felipe M. Medalla

CONCERNED Filipinos are adding their voices to economists and Philippine officials who have expressed their opposition to the proposed legislation creating a P250-billion sovereign wealth fund, now being rushed for approval in the House of Representatives.

A petition on Change.org titled, “Hands off our SSS and GSIS contributions, NO TO House Bill 6398!” already picked up 16,121 signatures as of press time, exceeding its initial target of 15,000. The petition is picking up steam as it tries to reach a new goal of 25,000 signatories.

This developed as Bangko Sentral ng Pilipinas (BSP) Gov. Felipe Medalla was cool to the idea of creating the Maharlika Wealth Fund (MWF), as proposed in House Bill 6398, warning of the dangers of another 1MDB scandal in the making.

The fund’s creation has been supported by Finance Secretary Benjamin Diokno, a former central bank governor, who even backed the use of gross international reserves (GIR) and overseas Filipino worker remittances as seed money for said fund.

“To me, the experience of 1MDB of Malaysia is the biggest risk. Even if the current guys are okay, will the guys five years from now still be okay? It’s a governance issue.”

BSP Gov. Felipe Medalla

On Friday, 2nd district  Albay Rep. Joey Salceda, chair of the technical working group refining HB6398, released revised provisions in the proposed legislation meant to allay concerns of the public, economists, and fellow lawmakers. Primarily pushed by House Speaker Rep. Martin Romualdez and Deputy Majority Leader Sandro Marcos, HB 6398 proposes to use pension funds under the Social Security System (SSS) and Government Service Insurance System (GSIS), as well as funds of state-owned Land Bank of the Philippines and Development Bank of the Philippines, as seed capital for the MWF.

Other co-authors of the controversial bill include Reps. Jose “Mannix” Dalipe, Stella Luz A. Quimbo, Yedda Marie K. Romualdez, and Jude A. Acidre.

No to GIR use

In an interview with Bloomberg TV, Medalla said, “To me, the experience of 1MDB of Malaysia is the biggest risk. Even if the current guys are okay, will the guys five years from now still be okay? It’s a governance issue.” Under a revised  provision of HB 6398, the President of the Philippines, now Ferdinand Marcos Jr., “shall sit as chairperson” of the Maharlika Wealth Fund Corp., the fund’s administrator. Salceda said  in an interview with GMA’s 24 Oras, it was President Marcos who “ordered” the creation of the sovereign wealth fund.

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