Philippine lawmakers in poverty-plagued nation approve US$8.9 billion sovereign wealth fund

The national government will be the biggest contributor, drawing seed funds from the central bank, gaming revenue, and two government-owned banks

Activists, opposition figures question the need for a sovereign wealth fund in the poverty-plagued country, raising concerns over potential corruption

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A protester holds a placard during a rally in front of the House of Representatives in Quezon City on December 12, 2022, as legislators deliberate on the sovereign wealth fund proposed law. Photo: AFP

Published: 9:26pm, 31 May 2023

Philippine lawmakers approved the creation of an US$8.9 billion sovereign wealth fund on Wednesday to boost growth and cut poverty, but critics insisted it was a “scam” and should be scrapped.

President Ferdinand Marcos Jnr had called for a swift passage of the bill, filed by his son and cousin late last year, to enable the debt-laden government to earn extra funds to finance infrastructure projects.

The national government will be the biggest contributor to the 500-billion-peso “Maharlika Investment Fund”, drawing seed funds from the central bank, gaming revenue, and two government-owned banks.

Private financial institutions and corporations will also be allowed to invest.

House of Representatives deputy speaker Aurelio Gonzales declared the Senate’s version of the bill approved during a session. It will be sent to Marcos to be signed into law.

Senate President Juan Miguel Zubiri presides over the plenary session at the Senate in Manila on May 31, 2023. Photo: AFP

The original proposal was for a US$4.9 billion fund that would be partly bankrolled by state-run pensions for government and private sector workers, sparking public fears that retirement savings could be put at risk.