Philippine President Ferdinand Marcos on Tuesday signed into law a bill creating a $9 billion sovereign wealth fund aimed at boosting economic growth and infrastructure spending, but critics warned it will be prone to misuse.
Marcos had pushed Congress for swift approval of the bill, which was filed by his son and cousin late last year. During a signing ceremony at the presidential palace, Marcos said the fund would "leverage a small fraction" of the government's money without adding to the country's debt burden.
"We will leverage on a small fraction of the considerable but underutilized investable funds of government and stimulate the economy without the disadvantage of having additional fiscal and debt burden," Marcos said, less a week before he is due to deliver his second State of the Nation address.
But a small group of protesters rallied near the palace in opposition to the law, claiming the fund was a "deception" and would put public money "in danger".
The 500-billion-peso "Maharlika Investment Fund" will draw most of its funds from the national government, including the central bank, gaming revenue, and two state-owned banks. Private banks and companies will also be allowed to invest.
The original proposal was for a $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. The final version of the bill approved by Congress in May said pension funds would not have to contribute. The fund will be allowed to make a wide range of investments, including in corporate bonds, equities, joint ventures, and infrastructure projects.
Marcos said Tuesday the fund would help the government achieve its economic growth targets and reduce reliance on foreign borrowings to pay for new roads and bridges. He insisted the fund would be transparent and only top finance professionals would be hired to manage it. "I assure you that the resources entrusted to the fund are taken care of with utmost prudence and integrity," Marcos said. Conventional sovereign wealth funds are seeded by windfall government profits from natural resources such as oil or minerals.
The word "maharlika" is widely associated with Marcos Jr's late dictator father and namesake, who presided over widespread human rights abuses and corruption during his two decades in power. He was ousted in 1986. Marcos Sr claimed to have led an anti-Japanese guerrilla unit called Ang Mga Maharlika during World War II, but he has been accused of lying about his war record.
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