SSS hopeful it can still invest in MWF

MANILA, Philippines — The Social Security System (SSS) is still hoping it can invest in the Maharlika Wealth Fund (MWF) in the future after lawmakers decided to no longer source out money from the two state-run pension funds.

As protests mounted, leaders of the House of Representatives decided to amend the bill and remove SSS and the Government Service Insurance System (GSIS) as sources of funds.

SSS and GSIS were originally supposed to infuse a combined P175 billion into the Maharlika Wealth Fund.

SSS president and CEO Michael Regino said he was not part of the meeting with House leaders and the economic managers when they decided to remove SSS and GSIS in the equation.

“Maybe SSS and GSIS can invest in the future when the sovereign fund would be doing well in its investments and would already be a great help to nation building. That’s an option,” Regino told The STAR.

“Only time will tell what’s the right decision. We will continue to manage SSS the best way we can,” he said.

GSIS president and general manager Wick Veloso, on the other hand, has yet to respond to queries on the removal of the pension fund in the Maharlika Weath Fund.

Foundation for Economic Freedom president Calixto Chikiamco said the removal of SSS and GSIS was expected, especially as touching pensioners’ funds is “politically radioactive.”

“That is the reason why even former president Ferdinand Marcos Sr. dared not touch SSS funds. That showed that the Maharlika Wealth Fund bill was hastily crafted,” Chikiamco told The STAR.

Leonardo Lanzona, economist and professor at the Ateneo De Manila University, argued that losing the GSIS and SSS accounts would emaciate the fund and would practically “kill” the program.

“The government is in dire need of capital to counter inflation, spur economic growth and reduce foreign debt. With the pension funds gone, it will have to look for other sources especially because they do not want to tax the wealthy,” Lanzona told The STAR.

“This episode on the Maharlika Wealth Fund showed the desperation of economic managers to accumulate money and the fallacy of the strong economic recovery narrative,” he said.

Lanzona maintained that the pension funds would have been a fresh source of privately-owned money. He said the pension funds would force the government to undertake difficult trade-offs across departments and programs.

“The profits of the BSP (Bangko Sentral ng Pilipinas) had always been available to the government if needed. So, there is no need to create a special fund agency if BSP is its only source,” Lanzona said.

Despite the removal of SSS and GSIS, Chikiamco argued that weaknesses and loopholes in the Maharlika remained.

These include the wrong timing with lack of fiscal surplus, possible violation of the Constitutional independence of the BSP, and the diversion of BSP dividends from the national budget to the Maharlika fund that will only exacerbate the fiscal deficit.

Chikiamco said there is still lack of evidence that the Maharlika will earn significantly higher returns than what the Land Bank of the Philippines and the Development Bank of the Philippines are earning on their money, as well as lack of transparency and accountability.

“The President is dissipating his political capital on this. He should be focusing on addressing food inflation to generate more public trust and increase his political capital,” Chikiamco said.

“He can revive the idea of a sovereign wealth fund when he has stabilized prices, which is the number one concern of the public,” he said.