The bill seeking to create the Maharlika Wealth Fund (MWF) would have faced legal issues had lawmakers jawboned the inclusion of pension funds’ contribution to the initiative, organized labor mused.
In a statement, the Nagkaisa labor coalition said while the officials of the Social Security System (SSS) publicly backed the MWF, its members were supposedly not consulted on the said matter.
“As members of the SSS, our members strongly object to the use of the P50 billion funds for the MWF. The commitment to use [such amount] for the MWF [did not undergo] consultation among the SSS members. Neither their consent was given,” Nagkaisa said.
Under House Bill (HB) 6398, the SSS, the Government Service Insurance System (GSIS), Land Bank of the Philippines, Development Bank of the Philippines and the national government are required to invest equity with a combined total of P270 billion to start up the MWF.
The MWF, which is patterned after sovereign wealth funds of other countries, will be used by the government to invest in initiatives that will promote fiscal stability, and strengthen top performing government financial institutions.
Nagkaisa cited the Supreme Court decision on the case “Roman Catholic Archbishop of Manila vs SSS” (GR 15045, 20 December 1961). The High Tribunal ruled that “the funds contributed to the System created by the law are not public funds but funds belonging to the members, which are merely held in trust by the Government.”
It also noted that while Republic Act (RA) 11199 (Social Security Act of 2018) allowed the SSS to invest its Reserve Fund—its revenues that are not needed to meet its current administrative and operational expenses—its mandated P50 billion contribution to the MWF is too much.
“The SSS is allowed to invest one percent of the reserve fund in foreign investments in the first year, which may be increased by another one percent for each succeeding year, up to a maximum of 15 percent of the reserve fund,” Nagkaisa explained.
“The P50B exceeded the limit of one percent investment. Based on SSS figures at end-2021, the SSS can initially invest about P6 billion only in foreign currency-denominated investments in 2022, growing by about P6 billion per year,” it added.
The coalition lauded the decision of Congress last Wednesday to scrap the provision of the HB 6398, which would have mandated the SSS and GSIS to contribute to MWF, after it drew opposition from different sectors including business and labor.
“We are elated and the Nagkaisa Labor Coalition—the biggest aggrupation of trade unions, federations, associations, alliances in the country—welcomes the deletion of SSS and GSIS funds from the proposed bill on Maharlika Wealth Fund,” it said.
Nagkaisa is composed of 47 labor groups including the Federation of Free Workers, Partido Manggagawa, Sentro ng Nagkakaisa at Progresibong Manggagawa and the Trade Union Congress of the Philippines.