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Lawmakers are currently “fine-tuning” the Maharlika Fund measure, according to the DBM chief

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Amenah Pangandaman, secretary of the Department of Budget and Management (DBM), promised on Wednesday that parliamentarians would continue to “fine-tune” the proposed Maharlika Investment Fund (MIF) bill in response to their concerns.

Pangandaman allayed fears over the proposed sovereign wealth fund during the “Kapihan sa Manila Bay” media forum by stating that it will go through public discussions as part of the legislative process.

“We saw democracy in action, ” said the speaker. In the initial draft of the bill, the part that would have used the Government Service Insurance System and the Social Security System as funding sources was removed, she said. “Our legislators listened and removed that item,” she added.

After the House leadership removed the GSIS, SSS, and the national budget from its fund sources, the initial capitalization of the most recent version of the proposed bill creating the MIF was reduced from PHP275 billion to merely PHP110 billion.

“At this time, the bill is being adjusted. At least because of the formation of the fund, we are receiving more good feedback, she continued.

She urged opponents to “respect the process of legislation,” pointing out that there will still be arduous review required before it reaches the bicameral conference committee.

“…The version we currently have, which they’re likely to pass, is the result of public consultation…

There will be committee hearings, publishing consultations, and a lot more, she said. “After the House, it will move on to the Senate, where there will be many more happenings,” she added.

Since 2020

Pangandaman added that there is “a lot of literature” on the creation of sovereign wealth funds, indicating that the idea behind them is not novel.

The World Bank, Milken Institute, Asian Development Bank (ADB), International Monetary Fund (IMF), and the previous administration’s initiative to create a sovereign wealth fund, according to her, have all been discussed over time.

She mentioned that the concept was developed by the Bangko Sentral ng Pilipinas (BSP) as early as 2020, following the establishment of the Indonesia Investment Authority (INA).

Although the BSP had previously discussed the creation of a sovereign wealth fund with the ADB and IMF, they first received advice against having the central bank establish the fund since it would be outside of its purview.

She noted that in order to discover the best methods for creating its own sovereign wealth fund, the nation’s economic administrators continue to meet with foreign development agencies.

“A portion of our TWG met with the Milken Institute of Singapore just this morning. The report, which I believe will state that we don’t need to wait for it to begin in order to establish our own sovereign wealth fund, will be released soon, she predicted.

Safeguards

Pangandaman also emphasized that measures are in place to uphold transparency and accountability in the management of the MIF, such as the requirement to adhere to the Santiago Principles of the International Working Group of Sovereign Wealth Funds and an executive department reportorial requirement that will be put into place along with congressional oversight.

“I and the DBM support any action, initiative, or law that may assist our budget given our current restricted [fiscal] space. We would thus support the establishment of the wealth fund, she declared.

President Ferdinand R. Marcos Jr. supported the establishment of a sovereign wealth fund on Sunday, saying it would be premature to discuss any amendments to the measure at this time.

“Let’s wait to discuss until we see the final version because we might be discussing things that are no longer in the final version. On a flight to Brussels, Belgium, he told reporters, “So let’s wait what the legislature will do. Antayin natin kung ano’ng gagawin ng legislature.

Additionally, he pleaded with opponents to allow lawmakers the opportunity to construct a “perfect” version of the proposed Maharlika fund.

“We’re simply going through the motions when it comes to reviewing the measure. We, not so much. The legislative body, that is. So let them carry out their duties. Tama’ yan That’s right, I said “para gawin nilang.” So that they may perfect it,” he continued.

To create a Philippine sovereign wealth fund modeled after the successful sovereign wealth funds around the world, House Bill 6398 was introduced on November 28.

Obtaining the best absolute return and attainable financial gains on its investments, as well as meeting the requirements of liquidity, safety/security, and yield to ensure the profitability of the respective funds held by government financial institutions, are all part of its strategy to ensure economic growth.


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