Business Groups Oppose Sovereign Wealth Fund

Business groups join calls to oppose the current administration’s proposed plan to build a sovereign wealth fund citing economic interventionism, transparency, and fiscal prudence.

Business groups including the Women’s Business Council Philippines, Inc, UP School of Economics Alumni Association, Philippine Women’s Economic Network, Movement for Good Governance, Management Association of The Philippines, Makati Business Club, Integrity Initiative, Inc, Institute of Corporate Directors, Financial Executives Institute of The Philippines, Filipina CEO Circle,   Competitive Currency Forum, Foundation for Economic Freedom all released a joint statement.

The proposed bill would require state pension funds such as the Social Security System and the  Government Service Insurance System, and state-owned lenders such as the Development Bank of the Philippines and the Land Bank of the Philippines to give an initial investment of ₱200 billion to the Maharlika fund.

The government is posed to provide ₱25 billion for the funding. The Philippine Amusement and Gaming Corp. and the Bangko Sentral ng Pilipinas are also set to allocate funding.

“The principles of fiscal prudence, additionality, the solvency of social pension funds, contingent liabilities, monetary independence of the Bangko Sentral ng Pilipinas (BSP), the government in the economy, and transparency,” mentioned the combined statement of the business groups.

According to these business groups, fiscal prudence is a top concern. They note that the Philippines does not have any commodity-based surpluses, none as well from the state-owned enterprises (SOE) or foreign trade activities.

“The country does not have a bonanza of commodity surpluses that need to be deployed. Instead of leaving a legacy of surplus funds to be managed for future generations, the current generation is leaving a legacy of heavy indebtedness which future generations need to pay or refinance,”  mentioned the statement.

Aside from this, the business groups mentioned that the Maharlika funding will not be filling gaps or “missing institutions” in the national economy.

Source: Philstar