Lawmakers approved the creation of a P500 billion sovereign wealth fund on Wednesday to boost growth and cut poverty, but critics insisted it was a “scam” and should be scrapped.

President Ferdinand Marcos Jr had called for a swift passage of the bill, filed by his son and cousin late last year, to enable the debt-laden government to earn extra funds to finance infrastructure projects.

The national government will be the biggest contributor to the P500 billion “Maharlika Investment Fund”, drawing seed funds from the central bank, gaming revenue, and two government-owned banks.

Private financial institutions and corporations will also be allowed to invest.

House of Representatives deputy speaker Aurelio Gonzales declared the Senate’s version of the bill approved during a session. It will be sent to Marcos to be signed into law.

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 said pension funds would not have to contribute.

“I assure our countrymen they need not worry. All the safeguards that could be put in were put in place,” Senate President Miguel Zubiri told reporters.

Senator Mark Villar, the main author of the Senate bill, said the fund would create infrastructure projects, resulting in stronger growth, more jobs and reduced poverty.

“This would help the government manage its budget and mitigate fiscal pressures during economic downturns,” Villar said in a statement Tuesday.

‘Bill shouldn’t exist’

The fund will be allowed to make a wide range of investments, including in corporate bonds, equities, joint ventures and infrastructure projects.

Activists and opposition figures have questioned the need for a sovereign wealth fund in the poverty-plagued country and raised concerns about the potential for corruption.

Business groups have said the government was already running huge budget deficits and the proposed law risked downgrading its credit rating.

Conventional sovereign wealth funds are seeded by windfall government profits from natural resources, such as oil or minerals.

The left-wing Akbayan Party said Wednesday the measure was “the country’s largest investment scam” and warned the public to “remain vigilant”.

“This bill shouldn’t even exist,” the party said in a statement.

“Safeguards may be in place now, but a law is only as good as its execution.”

The word “maharlika” is widely associated with Marcos Jr’s late dictator father and namesake, who presided over widespread human rights abuses and corruption during his two decades in power. He was ousted in 1986.

Marcos Sr claimed to have led an anti-Japanese guerrilla unit called Ang Mga Maharlika during World War II, but he has been accused of lying about his war record.

An earlier version of the bill had designated the president as head of the fund’s board, ringing alarm bells given the Marcos family’s history.

This has since been changed to the finance secretary.

An estimated $10 billion was stolen from state coffers during Marcos Sr’s rule, while the family has been accused of owing more than $3.6 billion in estate taxes.

No one in the clan has been jailed.

© Agence France-Presse