The sovereign fund, a savings instrument that will receive a portion of surplus revenues of an expanded Canal, would accumulate to about $12,500 million by 2025, according to projections managed by the Executive.
Each year, from the contributions generated by the Canal to the State, a portion will go to the National Treasury for the equivalent of 3% of gross domestic product (GDP) and funds in excess of that amount will be allocated to the savings fund.
Assuming that there exists a year like 2011 in which the GDP was around $30 billion and the contribution of the canal were $1,040 million, the Treasury would have received the equivalent of 3% of GDP, or about one billion dollars and the sovereign fund would have received the remaining $40 million.
This is the formula that seems to have gained greater consensus between local authorities, international agencies and the commission that advises the Ministry of Economy and Finance (MEF) in making the fund.
The Minister of Finance, Frank De Lima, said he intends to present the project to the Cabinet in mid-March to be sent to the National Assembly and debated before the end of April.
The seed capital will be sovereign fund assets of the Trust Fund for Development ($1,200 million and $1,300 million), an instrument that would cease to exist and whose law would be repealed in 2012.
The sovereign fund is created in order to have a “mattress” to fall back on if the country suffers a natural disaster or a sharp economic slowdown, but not be used otherwise.
According to the guidelines referred to in the draft, resources may be removed when the emergency fund has minimal impact 0.5% of GDP. In the course of the downturn, the government may use the fund if the real rate of GDP growth is below 2%, not being able to withdraw more than 4% of GDP