One objection to the creation of a sovereign wealth fund lies in the proponents’ intention to use the money of the Government Service Insurance System (GSIS) and the Social Security System (SSS).
That is money contributed to the systems monthly to cover the members’ emergency needs and retirement; GSIS and SSS already have ways to make the fund grow. They do not need another body to invest their money.
The wealth fund is to be used by the government to invest in international markets to bring in more returns. Money that goes to the wealth fund would be that not being used, proponents said. Allocations will come from the GSIS, P125 billion; SSS, P50 billion; Land Bank of the Philippines, P50 billion; Development Bank of the Philippines, P25 billion; and the national treasury, P25 billion. That’s a total of P175 billion from GSIS and SSS.
There are other objections to the plan to create the wealth fund dubbed as Maharlika Investment Fund (MIF). There were lawmakers and officials who feared the fund would lead to corruption, and they questioned why relatives of President Ferdinand Marcos Jr. in the House of Representatives were behind the proposal and President Marcos himself will be chairperson of the wealth fund corporation.
The bill is still in gestation and it might be early to give it a thumbs down as nothing is final as to its structure, functions, investment plans, and safeguards. But, at the same time, it is never too early to air apprehensions about using GSIS and SSS funds without assurance the money will not be lost.
The House committee on banks and financial intermediaries approved last week the proposal to create the MIF. The bill will undergo further deliberation in House committees and the plenary before it is brought to the Senate. There will be time to discuss and address issues.
The wealth fund proposal comes at a time when retirees are hoping for an increase in their pensions to reflect inflation, when aid to the poor cannot be sustained because of a lack of funds, and the government’s foreign debt is rising.
There’s a petition on Change.org that opposes the bill based on several reasons, primarily the use of pension funds. The petition is titled “Hands off our SSS and GSIS contributions, NO TO House Bill 6398!” and cites 13 reasons why the bill should not pass.
Sectoral organizations can do their part by encouraging discussion on the proposal, coming up with a stand, and letting lawmakers and their sectoral representatives know. Senior citizen organizations can now have the opportunity to be heard by deciding on their position and writing to their sectoral representatives in Congress.
The challenge to lawmakers is to take an effort to explain the rationale behind the proposal, present details, especially where the investments will be placed and checks and balances to guard against misuse, and listen to the clamor of the owners of GSIS and SSS.
December 04, 2022
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