Organized workers said the bill seeking to create the Maharlika Wealth Fund (MWF) would have run into legal troubles had lawmakers de-listed the contribution of pension funds from the initiative.
In a statement, the Nagkaisa Labor Alliance said that while Social Security Scheme (SSS) officials have publicly supported the MWF, its members were supposedly not consulted on the matter.
“As members of the SSS, our members strongly object to the use of the 50 billion pesos funds for the MWF. Commitment to use [such amount] for MWF [did not undergo] Consultation among SSS members. Their consent was not given,” Nagkaisa said.
Under House Bill (HB) 6398, the Social Security System, Government Service Insurance System (GSIS), Land Bank of the Philippines, Development Bank of the Philippines, and the National Government are required to invest total equity of P270 billion for start-up MWF.
The MWF, which is modeled on other countries’ sovereign wealth funds, will be used by the government to invest in initiatives that will enhance financial stability, and strengthen the best-performing government financial institutions.
Nagkaisa cited the Supreme Court’s decision in “Roman Catholic Archbishop of Manila v. SSS” (GR 15045, December 20, 1961). The Supreme Court ruled that “money contributed to the system established by law is not public money but money belonging to the members, which is just money owned by the government.”
She also noted that while Republic Act (RA) 11199 (Social Security Act of 2018) allowed SSS to invest its reserve fund – revenues it does not need to cover its current administrative and operating expenses – its mandatory contribution of 50 billion pesos to the MWF is too much.
Nagkaisa explained that “SSS is allowed to invest one percent of the reserve fund in foreign investments in the first year, which may be increased by another one percent for each subsequent year, up to a maximum of 15 percent of the reserve fund.”
“The P50B exceeded the investment limit by one percent. Based on the SSS figures at the end of 2021, the SSS could initially only invest about 6 billion pesos in investments denominated in foreign currencies in 2022, an increase of about 6 billion pounds annually.
The coalition applauded Congress’ decision last Wednesday to repeal HB Section 6398, which would have authorized SSS and GSIS to contribute to the MWF, after it was met with opposition from various sectors including business and employment.
“We are pleased and the Nagkaisa Labor Coalition – the largest gathering of trade unions, federations, associations and coalitions in the country – welcomes the removal of SSS and GSIS funds from the proposed bill on the Maharlika Wealth Fund,” he said.
Nagkaisa is made up of 47 labor groups including the Federation of Free Workers, Partido Manggagawa, Sentro ng Nagkaikaisa, Progresibong Manggagawa and the Trade Union Congress of the Philippines.