Chiz: Pension funds should have investment flexibility
CAN amendments to the charters of pension funds allow them to invest in the contentious Maharlika Investment Fund (MIF)?
Sen. Francis “Chiz” Escudero raised the question after the Senate and the House of Representatives banned pension funds from investing in the MIF, which is now waiting to be signed into law by President Marcos Jr.
In an interview with dzBB radio, Escudero said he is having second thoughts on the inclusion of the prohibition in the final version of the MIF bill, saying this may be imposing too much on pension funds as to where they want to invest their money in.
“Parang sumosobra na sa sinasaklaw dapat ng batas na naglilikha ng MIC (Maharlika Investment Corporation) ‘yung pakiki-alam sa charter, puro batas kasi ‘yan ng mga pension funds kaugnay sa ano ang pwede at hindi nila pwedeng gawin (I feel it is going beyond the scope of the law creating the MIC. It somewhat interferes with their charter on where they would want to invest their funds in and what they can or cannot do with their funds),” Escudero said.
Under the ratified version of the MIF bill, investments from the Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (Pagibig), Overseas Workers Welfare Administration (OWWA), and Philippine Veterans Affairs Office (PVAO) are banned.
The measure was ratified by both houses of Congress last May 31.
Escudero said charters of pension funds can be amended to grant them flexibility in investing their money.
“Paano kung sa kabila ng mga alinlangan nila, maganda ang takbo nito? Bawal mag invest ‘yung pension funds kung saan sila pwedeng kumita ng mas malaki kumpara sa ordinaryong investment? Pagdating ba ng panahong iyon, aamyendahan natin ‘yung batas para payagan sila? (What will happen if the MIF turns out to be successful amid uncertainties raised? Will pension funds still not be allowed to put their money where they will earn big instead of just placing them in ordinary investments? Can we not amend the law and allow them to invest in the MIC when that time comes?),” Escudero asked.
“Ako’y naniniwala na kinakailangan, sinasabi ko nga sa kanila, na kung sakali, amyendahan individually ‘yung charter ng kada pension fund dahil marahil ito’y karagdagan o surplusage, wika nga dito sa batas na naglilikha ng MIC (I believe that if we individually amend the charter of pension funds, it can be considered as additional or surplusage as defined in the law which created the MIC),” he said.
President Marcos Jr. has assured the public that the government will not use money from the pension funds as seed money for the MIF but said that “a pension fund, which is what pension funds do, is they invest. If the pension fund decides the Maharlika Investment Fund is a good investment, it’s up to them if they want to invest in it.”
“May punto siguro ang Pangulo dahil iyong future investments mahirap namang isaklaw ng batas pero dahil ang batas na ito’y naglilikha lamang nung fund, ang pinagbabawal o ang hindi puwedeng gawin ay doon sa inisyal na subscription nitong korporasyon (Maybe the President has a point because we really cannot cover future investments in the law. But because this measure is only for the creation of a [sovereign wealth] fund, the things which are prohibited or can be allowed is only for the initial subscription of this corporation),” Escudero said.
Escudero said his questions can be properly answered once the constitutionality of the MIF bill is questioned before the Supreme Court.
“So depende ‘yan sa magiging interpretasyon kung may magku-kuwesitiyon na naman sa Korte Suprema. Pero ang basa ko sa probisyon, maliwanag na bawal, initial man o later on investment, hindi pinahihintulutan ng batas (So, that will depend on the interpretation of the Supreme Court when this measure will be brought before it. But what is written in the provision, it is clear that [pension funds] cannot be used whether for initial or later investments. That is not allowed under the measure),” Escudero said.
SENATE VOTING
The Senate on early Wednesday last week approved on second and third reading Senate Bill No. 2020 creating the MIF, which was certified as urgent by President Marcos last May 22. Nineteen senators voted in favor of its passage, one against and one abstained.
Escudero, Senate minority leader Aquilino Pimentel III and Imee Marcos did not participate in the voting which happened at around 2:30 a.m. Wednesday.
In the same interview with dzBB, Escudero said he did not expect that the voting will happen early Wednesday since there were a lot of amendments introduced to the bill.
Also, he said that the “test of economic viability” which he expected to be presented to senators before voting for the passage of the measure also did not happen.
He said the test of economic viability is provided for in the 1987 Constitution before a government-owned and controlled corporation (GOCC), like the MIC, can be established.
He added such test was included by the framers of the 1987 Constitution so that the scenario of GOCC running bankrupt does not happen.
“Noong nilikha ang Saligang Batas natin noong 1987, napakaraming GOCC noon na nalugi at binalikat ng mga taxpayers ‘yung mga bayarin ng GOCC na ‘yan. Kaya isa sa mga requirement na nilagay nila dapat may test of economic viability. Ibig sabihin hindi malulugi yung kumpanya, dapat kumbinsido tayo na hindi malulugi yung kompanya (A lot of GOCCs had gone bankrupt when the 1987 Constitution was framed and taxpayers were made to shoulder for these liabilities. That’s why that [test of economic viability] is one of the requisites, which means that a company will never go bankrupt, we must be convinced that the company will not suffer loses),” he said.
