A Proposed Filipino Sovereign Wealth Fund Gets a Name
Posted on 11/28/2022
Speaker of the House of Representatives Martin G. Romualdez filed a bill seeking the creation of a sovereign wealth fund to maximize the profitability of investible government assets for the benefit of all Filipinos. The Philippines does not have an known, or official sovereign wealth fund.
House Bill No. 6398 proposes to establish the Maharlika Wealth Fund (MWF), 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). The Maharlika (meaning freeman or freedman) were the feudal warrior class in ancient Tagalog society in Luzon, the Philippines.
The proposed Maharlika Wealth Fund is patterned after the sovereign wealth funds of 49 countries, including Singapore, China, Hong Kong, South Korea, Malaysia, Indonesia, Taiwan, Vietnam, and East Timor. House Majority Leader Manuel Jose “Mannix” M. Dalipe, senior Deputy Majority Leader Sandro Marcos, Tingog Party-list Reps. Yedda Marie Romualdez and Jude Acidre, and Marikina City Rep. Stella Luz Quimbo are the SWF bill’s co-authors.
In filing the bill, Romualdez said in a press release that it is essential for the government to “improve investment opportunities, promote productivity-enhancing investments and ensure that the Philippines becomes an investment destination” to achieve the objectives of the Agenda for Prosperity and the eight-point socioeconomic roadmap of President Ferdinand R. Marcos Jr.
“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 proposed MWF will provide for the management, investment and use of the proceeds of the fund,” he said.
The bill author says that HB 6398 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.
“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,” he noted.
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, health care 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, the Maharlika Wealth Fund would adhere to the Santiago Principles. Under HB 6398, the proposed Maharlika Wealth Fund would have a governing board, composed of nominees of the contributing GFIs, which would be in charge of managing the sovereign fund. The board also includes two independent directors.
