Philippines' Marcos signs $9 bln wealth fund into law

MANILA

Philippine President Ferdinand Marcos yesterday 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.

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 yesterday the fund would help the government achieve its economic growth targets and reduce reliance on foreign borrowings to pay for new roads and bridges.

"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.