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SOURCE: Press and Public Affairs Bureau

SPEAKER ROMUALDEZ PROPOSES CREATION OF SOVEREIGN WEALTH FUND TO BENEFIT FILIPINOS
28 November 2022 11:00:25 PM


SPEAKER Martin G. Romualdez on Monday proposed the creation of a
sovereign wealth fund (SWF) to maximize the profitability of
investible government assets for the benefit of all Filipinos.

The proposal is contained in House Bill (HB) No. 6398 that seeks the
establishment of the Maharlika Wealth Fund, which would draw resources
primarily from contributions from the Government Service Insurance
System (GSIS), Social Security System (SSS), Land Bank of the
Philippines (Land Bank), and Development Bank of the Philippines
(DBP).

Other authors of the measure are House Majority Leader Manuel Jose
“Mannix” M. Dalipe, senior Deputy Majority Leader Ferdinand Alexander
A. Marcos, Tingog party-list Reps. Yedda Marie K. Romualdez and Jude
A. Acidre, and Marikina City Rep. Stella Luz A. Quimbo.

The proposed Maharlika Wealth Fund (MWF) is patterned after the SWFs
of 49 countries, including Singapore, China, Hong Kong, South Korea,
Malaysia, Indonesia, Taiwan, Vietnam, and East Timor.

In filing the bill, Romualdez said to achieve the objectives of the
Agenda for Prosperity and the eight-point socioeconomic roadmap of
President Ferdinand “Bongbong” Marcos Jr., it is essential for the
government to “improve investment opportunities, promote
productivity-enhancing investments, and ensure that the Philippines
becomes an investment destination.”

He said the proposed MWF “will provide for the management, investment,
and use of the proceeds of the fund.”

"Sovereign wealth funds are state-owned investment funds typically
financed by a country’s surplus revenues or reserves. Governments
invest these funds in an array of both real and financial assets to
stabilize national budgets, create savings for their citizens, or
promote economic development,” Romualdez said.

The Speaker added that his proposal would give the GSIS, SSS, Land
Bank, and DBP the opportunity “to ensure their respective funds’
optimal asset allocation as well as ensure that resources are
efficiently channeled to investments that will provide the most value
not only to the participating GFIs, but also to the country.”

The Speaker cited the cases of Singapore and Indonesia that have
successfully used their sovereign wealth funds.

He said Singapore’s SWFs provide the financial means for the
city-state “to manage its foreign reserves, defend itself and protect
its sovereignty without compromising its domestic program, and augment
its land-limited economic space with global investments.”

As for Indonesia, it has attracted foreign investors to jointly
capitalize its SWF to bring in much-needed investments in such sectors
as transportation, including airports, supply chains, logistics,
digital infrastructure, the green economy, healthcare services, the
financial sector, technology, and tourism, ultimately propelling the
country’s growth.

“As the Philippines secures its place not only as the Rising Star of
Asia but as a real economic leader in the Asia Pacific, the creation
of the MWF becomes imperative,” Romualdez said.

To ensure transparency and accountability, he said the MWF would
adhere to the Santiago Principles.

These are the 24 generally accepted principles and practices agreed to
in October 2008 in Santiago, Chile, among countries with SWFs,
investment recipient countries and international organizations.

The stakeholders committed to observe that SWFs will comply with all
applicable regulatory and disclosure requirements in countries in
which SWFs invest and that the SWFs will have in place a transparent
and sound governance structure that provides adequate operational
controls, risk management, and accountability, among other
commitments.

Under the bill, the envisioned MWF would have a governing board,
composed of nominees of the contributing GFIs, which would in charge
of managing the fund.

The board would include two independent directors.(END)

 
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