A Philippines peso note is seen in this picture illustration on June 2, 2017. — REUTERS

By Beatriz Marie D. Cruz, Reporter

THE Philippine Senate on Wednesday approved on third and final reading a bill seeking to create a sovereign wealth fund.

Nineteen senators voted in favor of Senate Bill No. 2020 which establishes the Maharlika Investment Fund (MIF).

The Senate’s approval comes after President Ferdinand R. Marcos, Jr. certified the bill as urgent last week.

Senator Ana Theresia “Risa” N. Hontiveros-Baraquel was the only lawmaker who voted against the measure, while Senator Maria Lourdes “Nancy” S. Binay-Angeles abstained.

Absent during the session were Senate Minority Leader Aquilino Pimentel III, Senator Francis Joseph “Chiz” G. Escudero and Senator Maria Imelda “Imee” R. Marcos, the president’s sister.

Under the approved bill, the initial capital for the MIF will come from the Land Bank of the Philippines (LANDBANK), which will invest P50 billion. The Development Bank of the Philippines (DBP) will infuse P25 billion, while the P50 billion will come from the national government.

The measure also requires the Bangko Sentral ng Pilipinas (BSP) to contribute 100% of its dividends to the MIF in its first two years.

After the two-year period, the central bank’s contribution drops to 50% of its dividends, with the remaining 50% to be deposited into a special account holding the capital build-up funds.

Funds from Philippine Amusement and Gaming Corp. and proceeds from privatization and transfer of government funds may also be used for the MIF.

The bill also strictly prohibits government agencies and government-owned and -controlled corporations that provide pension funds to contribute to the fund, whether voluntary or mandatory.

This includes the Government Service Insurance System (GSIS), Social Security System (SSS), Philippine Health Insurance Corp. (PhilHealth), Overseas Workers Welfare Administration (OWWA), Philippine Veterans Affairs Office (PVAO), and the Home Development Mutual Fund (Pag-IBIG Fund).

Senate President Juan Miguel F. Zubiri said a bicameral conference committee will meet today to reconcile the bill’s conflicting provisions with the House’s version.