The Philippines moved a step closer to establishing a sovereign wealth fund after the Senate approved the bill, about a week after President Ferdinand Marcos Jr. declared it an urgent measure.
(Bloomberg) — The Philippines moved a step closer to establishing a sovereign wealth fund after the Senate approved the bill, about a week after President Ferdinand Marcos Jr. declared it an urgent measure.
Lawmakers voted 19-2 in favor of setting up the Maharlika Investment Fund early on Wednesday after nearly 12 hours of debates and amendments, according to a tweet from the Senate’s official account. The measure will next be reconciled with the version earlier passed by the House of Representatives before Marcos signs it into law.
Marcos last week said there’s an “urgent need for a sustainable national investment fund” that should help finance large-scale infrastructure projects to spur economic activity. The House approved the bill, which aims to tap and securitize dividends from state-owned companies, in December.
Among key provisions in the measure include an authorized capital stock of 500 billion pesos ($8.9 billion) for Maharlika Investment Corporation which will manage the fund. An initial 125 billion pesos worth of common stocks would be subscribed by the government, with 50 billion pesos coming from Land Bank of the Philippines and 25 billion pesos from the Development Bank of the Philippines.
The Senate version includes central bank dividends, gaming agency income and proceeds from privatization of government assets as other sources of funding. But it states that “under no circumstances” will state pension funds Social Security System and Government Service Insurance System as well as the Home Development Mutual Fund “be requested or required to contribute” to the corporation.
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