MANILA, Philippines – The House banks panel approved more amendments to the bill that seeks the establishment of a sovereign wealth fund, but questions emerge on whether it would be elevated to and approved by the House plenary before Congress goes on a holiday break this week.
In an interview with reporters on Monday, December 12, committee chairperson Irwin Tieng said latest amendments introduced to the controversial measure include:
- Penal provision for those who commit act of gross negligence, fraud, actions in breach of any investment agreement, and resulting in a loss suffered by the fund
- Awarding at least one-fifth of the fund’s net profits to social welfare projects
- Reverting the name to Maharlika Investment Fund (from the previous Maharlika Wealth Fund)
“Stockholders or members and other persons shall be punished by imprisonment of not less than one year but not more than five years, or a fine of not less than P50,000 but not more than P2 million, or both at the discretion of the court,” Tieng said, reading the amended bill.
“The board shall determine the dividend policies of the Maharlika Investment Corporation, provided that at least 20% of the net profits of MIC shall be remitted to the national government to be earmarked for social welfare projects,” he added, noting that these could be in the form of financial aid for struggling Filipinos.
The latest amendments are on top of edits to the bill that were disclosed by House appropriations committee vice chairperson Stella Quimbo last week, such as:
- Bangko Sentral ng Pilipinas replacing Social Security System and Government Service Insurance System as funding sources
- The finance secretary replacing the country’s president as chairman of the MIC
- Raising the number of independent directors of the MIC to four (from the original two), but keeping the number of board seats at 15
The seed capital of the MIC is expected to be around P110 billion, a significant decrease from earlier proposals that pegged the initial capital at P250 billion to P275 billion.
That’s because the BSP will be unable to fill the P175-billion void left behind by the removal of pension funds.
The central bank has said it could only pitch in 100% of its dividends, amounting to P30 billion to P35 billion for the current year.
Tieng said that, despite the shrinking of the seed capital, it is still sufficient to start an investment fund of such a nature.
He stood by the bill amid persistent calls by critics to scrap the proposal because it is supposedly “beyond repair.”
“We included many safeguards. There are four independent directors, a risk management officer, and an advisory board that includes the National Economic Development Authority,” he said. “There is a provision that any investment must go through NEDA. The Commission on Audit, an external auditor, and an internal auditor also play a part.”
Tieng, however, said he couldn’t say whether the bill would be approved on second reading by Wednesday, December 14, the last day that the House will hold a plenary session before it goes on a holiday break on December 17. – Rappler.com