Lawmakers in the house of representatives are seeking to establish a sovereign wealth fund to invest in a variety of outlets, including foreign financial assets, fixed-income contrivance, national and international debt securities, real estate development, and infrastructure projects. However, the public reacted negatively to the original version of the unnumbered law since it stated that the cash used by the wealth fund would come from the Government Service Insurance System (GSIS) and Philippine Social Security System (SSS) pension funds. After a few weeks of revisions, the proponents of the unnamed bill finalized the changes meant to pacify the negative reactions, especially the funding provisions
Looking at a brighter perspective, the Maharlika Wealth Fund would be a great idea in this state of a declining economy. Investing while the prices are still low because of a recession in the global economy, it would be an easy feat to produce millions of pesos in a sufficient amount of time. But realistically speaking, everything would only go smoothly as expected if the chosen people who will manage the funds and investments aren’t connected to any government executive or legislator since it will spark corruption immediately.
As for the matter of benefiting the masses, IF the MWF (Maharlika Wealth Fund) succeeds in their area—more jobs would be created, and because of a good return on investments; fewer taxes will be imposed on our citizens. The government’s economic team assured that there will be enough safeguards that will be placed to ensure accountability and transparency in managing the fund. The MWF also aims to ensure economic growth by generating consistent and stable investment returns with appropriate risk limits to preserve and enhance the long-term value of the fund—obtaining the best absolute return and achievable financial gains on its investments; and satisfying the requirements of liquidity, safety/security, and yield in order to ensure the profitability of the GFIs’ respective funds. However, if the MWF fails to achieve its goal, then the government just lost billions of pesos for nothing and the government would likely borrow more the following year; which we cannot afford as our country is already six feet below debt. What's more, collecting funds and losing to a reckless risk would have a great impact for years on our economy.
Multiple analysts have expressed their opinions over the MWF and most of them are saying that it is not wise to get the capital from the Bangko Sentral’s dividends as they could have negative repercussions for the central bank. They are also pointing out that the government should not have access to the personnel working in the fund as it should be autonomous, and its members should be decided by a group of people and not a single person like those president-appointed ones.
Contemplating the points above, the risk involved is so high that they can devise another proposal that can give the same high reward with minimal possibility of losses involved. In view of the fact that risking such high capital in this recessing economy, no sane economist would approve of such a thing as there are other ways to do that. Development is a necessity but it should not be at the expense of the country’s financial security.
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