2% Of Total Fund May Be Manager’s Fee – Koko

Local and foreign fund managers and brokers would have guaranteed profits from the proposed P250-billion Maharlika Fund while Filipinos will have to cross their fingers and hope that the sovereign investment pool will not fall to corruption and mismanagement, according to Senate Minority Leader Aquilino Pimentel III.

Pimentel said fund managers and brokers that would handle the sovereign investment fund – initially intended to be pooled from assets of the Government Service Insurance System (GSIS) and Social Security System (SSS) – would have a guaranteed commission of two percent at the outset.

“What will be the expenses there? There will be a two percent management fee of the total funds managed and that’s not yet from the income. They are already earning income. They have guaranteed profits. And there are the brokers, who will also earn commissions from the cash flow. Why?” Pimentel told “The Chiefs” on Cignal’s One News in Filipino on Tuesday, Dec. 6.

He said what the controversial fund could likely bring are not returns but debt.

“Do we really need to establish this at this particular time? Do we need this? Where will the money come from? Do we have a seed capital? Do we have a windfall? Do we have a budget surplus?” Pimentel said.

“Now, they want to use the property of other people – the contributions of retirees to the pension fund. It doesn’t make sense,” he said.

He said he believes that his colleagues are not enthusiastic, wary even, of the proposal from the House of Representatives and will not rush debates on the bill.

Senators will first have to be convinced of the rationale for the Maharlika Fund, which he believes will not generate sufficient returns, given the global economic downturn.

“For us senators, we must focus on the urgent problems of our countrymen, like inflation, food inflation, which is felt most by the poor,” Pimentel said.