Foreign chambers await details on proposed sovereign wealth fund

MANILA, Philippines — Members of the Joint Foreign Chambers of the Philippines have expressed a neutral position on the proposed creation of a sovereign wealth fund for the Philippines as they wait for more details from the government.

“For my European perspective, we are following it with great interest (as it) might be something that will happen if not sooner than later, but there’s very few details on the table right now. So for now we are monitoring the situation before we are making any specific leap [to] spread expressed positions in this regard,” European Chamber of Commerce of the Philippines president Lars Wittig said in a press conference yesterday.

He emphasized that his group has a “neutral” position on the proposal for now.

“We are monitoring it. We are learning more. We don’t have many details yet. It’s a big issue with a few details on the table,” Wittig said.

Lawmakers through House Bill 6398 called for the establishment of the Maharlika Wealth Fund (MWF) to be supported by pension fund managers Government Service Insurance System (GSIS) and Social Security System (SSS) as well as state-run financial institutions Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP).

Under the bill, the four institutions are mandated to invest equity with a combined total of P250 billion to start up the fund. The GSIS will provide an initial investment of P125 billion, P50 billion for both SSS and Landbank and P25 billion from the DBP.

During a recent hearing of the House committee on banks and financial intermediaries on the bill filed by Speaker Martin Romualdez, GSIS president and general manager Jose Arnulfo Veloso, SSS president and chief operating officer Michael Regino, Landbank president and CEO Cecilia Borromeo as well as DBP president Emmanuel Herbosa unanimously backed the creation of the MWF.

For his part, American Chamber of Commerce of the Philippines executive director Ebb Hinchliffe acknowledged that while some countries have been successful in implementing sovereign wealth funds, he said he does not know how necessary it is for the Philippines.

Hinchliffe also said that more details would be needed to find out how the proposed sovereign wealth fund would be operated.

While expressing support for the creation of a sovereign wealth fund, Australian-New Zealand Chamber of Commerce of the Philippines vice president Bradley Norman also emphasized the need for more details about the proposal.

On the local front, business group Philippine Chamber of Commerce and Industry president George Barcelon expressed support for the creation of a sovereign wealth fund, but stressed the need for the government to put proper safeguards to protect the country’s wealth.