Manila: The establishment of a $8.9 billion sovereign wealth fund in the Philippines was approved by lawmakers on Wednesday in an effort to increase growth and reduce poverty, but detractors insisted it was a "scam" that should be abandoned.
The bill was introduced by President Ferdinand Marcos Jr.'s son and cousin late last year, and the president had called for its quick passage so that the government could quickly raise additional funds to finance infrastructure projects.
The 500 billion peso "Maharlika Investment Fund" will be primarily funded by the national government, with the central bank, gaming revenue, and two government-owned banks providing the initial seed money.
Also Read: Hasina says her visit to the US marked an important milestone
Investments from private financial institutions and businesses are also permitted.
The bill's approval was announced during a session by Aurelio Gonzales, deputy speaker of the House of Representatives. It will be delivered to Marcos for his signature as a law.
The initial plan called for a $4.9 billion fund that would be financed in part by state-run pensions for public and private sector employees, which raised concerns among the general public that retirement savings might be in jeopardy According to the final bill, pension funds would not be required to make a contribution.
Also Read: Russia cannot block Ukraine's membership in the military alliance, according to NATO's Stoltenberg
"I assure our citizens not to be concerned. The Senate President Miguel Zubiri told reporters that "all the safeguards that could be put in place were put in place."
The primary author of the Senate bill, Senator Mark Villar, stated that the fund would develop infrastructure projects, resulting in stronger growth and more jobs.
In a statement on Tuesday, Villar said that doing this would aid the government in managing its budget and reducing fiscal pressures during economic downturns. The fund will be permitted to invest in a variety of things, such as infrastructure projects, joint ventures, corporate bonds, and stocks.
In the impoverished nation, activists and members of the opposition have questioned the necessity of a sovereign wealth fund and expressed worry about the likelihood of corruption.
Also Read: An ex-member of the Australian SAS who sued over news of executions in Afghanistan was unsuccessful
According to business associations, the government already has significant budget deficits, and the proposed law would put its credit rating at risk.
Traditionally, government profits from natural resources like oil or minerals are used to fund sovereign wealth funds. The measure is "the largest investment scam in the nation," according to the left-leaning Akbayan Party, which warned the public to "remain vigilant.
The party claimed in a statement that "this bill shouldn't even exist." "A law is only as good as its execution," the saying goes. "Safeguards may be in place now.