Senators stood firm on their position that state-run pension and insurance institutions are absolutely prohibited from investing in the proposed Maharlika Investment Fund.
Senate Minority Leader Aquilino Pimentel III admonished Finance Secretary Benjamin Diokno for his “play on words” when he claimed the Government Service Insurance System (GSIS) and Social Security System (SSS) can invest in projects backed by the Maharlika Investment Corp. to be formed out of the MIF law.
“They are avoiding the words used in the law like initial capital, additional capital and bonds. If they say ‘subscribe to projects’ what does it mean? Financing means advancing the money needed. Isn’t that plain and simple ‘lending’ or ‘loaning money’ to the project?” Pimentel said.
“It is just like buying a bond from the Maharlika Corp. It is the same thing. Circumvention in effect,” he added.
Asked for comment, Diokno did not reply to the Standard as of press time.
Senator Risa Hontiveros reminded the Executive Branch that it is tasked to carry out laws that have been passed by the legislature — in this case, the absolute prohibition.
“What Congress intended should be the standard for how the law is implemented. The Executive is not allowed to change, expand or limit it based on its own interpretation,” she said.
She said the Senate will exercise its oversight function to ensure that these safeguards for the protection of pensioners’ and contributors’ hard-earned money are enforced.
Senate Majority Floor Leader Joel Villanueva, however, took the side of Diokno on the issue.
He said the bill passed by Congress allows state-led pension funds to enter into joint venture projects with the Maharlika Investment Corporation (MIC), the state-led company that will manage the MIF.
“For example, if the MIC enters into a power plant project, and GSIS also enters into the same power plant project. They formed a joint venture. That is okay. That is legit,” Villanueva said.
“What is not allowed is for GSIS to go to Maharlika to enter into a certain project,” he added.
Senator Grace Po, for her part, said the Senate version even strengthened congressional oversight over the fund by requiring the quarterly submission of investment portfolio and audit reports.
“We put a premium on the public’s right to freedom of information by giving them access to investment plans for the fund and to audit documents,” she said.
While differing in opinion on the possible investments in MIC-backed projects, Villanueva said the bill was “clear in absolutely prohibiting government agencies and GOCCs providing for the social security and public health insurance of government employees, private sector workers and employees, and other sectors and subsectors, such as but not limited to the SSS, GSIS, PhilHealth, Pag-IBIG Fund, OWWA, and PVAO Pension Fund, whether mandatory or voluntary’ in the MIC and the MIF.”
He said there is no room for interpretation regarding the absolute prohibition.
Villanueva said the absolute prohibition was even repeated three timesin the final bill – in Section 6(2) on the allowed investors to thepreferred shares of MIC; on the last paragraph of Section 6 whichfurther solidifies the prohibition of these agencies to invest in thecapitalization of the MIC; and again on Section 12 on the investors tothe MIF.
“We trust that the IRR will be faithful to the bill that we passed andto the numerous manifestations and statements of support from thisrepresentation and their colleagues on this issue,” he said.
Earlier, National Treasurer Rosalia de Leon addressed fears that ifthe Maharlika Investment Fund loses money, the pensions of state andprivate workers would be put at risk.
“It’s prohibited [for the SSS and GSIS to invest in the MIF] directlyand indirectly,” De Leon said even as she claimed the two pensionfunds may invest in projects, but not in the MIC itself.
MIC can also form joint ventures with conglomerates for big-ticketPublic Private Partnership (PPP) projects, Diokno and De Leon said.
Diokno, who will head the MIC by virtue of his position as Finance secretary, said they will consider all possible investment projects, regardless of size. They will also work on developmental projects that could have a high return.