Metro Manila (CNN Philippines, December 15) — The bill seeking to create the country’s first sovereign wealth fund got the backing of Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla after lawmakers sorted out concerns raised by the central bank and pension fund members.
In a chance interview on Thursday, Medalla said removing state pension funds GSIS and SSS from the roster of financial institutions that will give seed money to the Maharlika Investment Fund (MIF) was a “good response.”
“Times like this let’s support the president. There are many things that he wants to do. And if this fund can be used to attract foreign investors and investors will invest in the fund like Indonesia, it will be good for the country,” Medalla told reporters after a briefing on the outcome of the Monetary Board’s Dec. 15 rate-setting meeting.
At least two members of the Monetary Board and a House lawmaker last week flagged concerns over the use of BSP dividends as part of the Maharlika fund’s multibillion-peso seed money.
Under the BSP’s revised charter since 2019, the central bank’s annual dividends must be rolled over to beef up its balance sheet to ₱200 billion from the ₱50-billion capital it held before its charter was amended three years ago.
But the revised version of the Maharlika bill compels the BSP to contribute every year, with the first two years funded by 100% of its annual dividends.
“Given that our concerns in the central bank have been completely addressed and criticism of inclusion of the pension funds has been addressed as well, I support, I support the passage of the bill,” Medalla pointed out.
“Because when you look at it, we’re just postponing when we’re getting the dividends and right now, our balance sheet is more than strong enough not to be affected by the postponement,” he added.
Finance Secretary Benjamin Diokno recently asked the chief executive to certify the MIF bill as urgent to allow Congress to fast-track its approval.
Voting 279-6, lawmakers approved the measure on third and final reading on Thursday.
Albay Rep. Edcel Lagman, president of the Liberal Party, earlier advised his colleagues against rushing the passage of the MIF bill, saying the public should be consulted about it.
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