This column has credited the authors of House Bill 6398 creating the Maharlika Investment Fund for withdrawing the Social Security System and the Government Service Insurance System, as sources for its initial capital, following the backlash it created, as the oppositors slammed the idea of putting at risk the retirement pension of the SSS and GSIS members.
The proponents’ insistence, however, that the transfer to the proposed sovereign wealth fund is legal, is awfully wrong. The Supreme Court has already ruled that those funds are private and cannot be used by the government other than for the intended beneficiaries. They cannot insist on their legal ignorance. They should learn how to consult with — and listen to — their lawyers.
Just after the Maharlika authors made a correct somersault, here comes the Secretary of Finance saying that the SSS and the GSIS can still join the Maharlika and place their investible funds, oblivious of the mounting opposition and illegality of the idea. One cannot help but wonder, if not outright suspect, what hidden agenda there is behind this sovereign wealth fund.
What’s bewildering is that the proponents of this controversial bill appear to accept and cave into the concerns raised by well-meaning critics of the proposed measure as they, in fact, have been revising the bill and removing its unwanted and contentious provisions.
They already took away from the contemplated Maharlika kitty 20 percent of the annual national budget as its share, aside from the funds coming from the SSS and the GSIS. After the issue of a conflict of interest was raised in the matter of the President chairing the Maharlika, they opted to change the President and put instead in his place the Secretary of Finance, in an attempt to de-politicize the matter.
They increased the independent members of the 15-member Maharlika board to four from two. They are now willing to start the wealth fund from a high of P275 billion to just P150 billion, to source it from the LandBank, Development Bank of the Philippines, and the Central Bank.
The positive response from the Maharlika proponents has not reduced the opposition to House Bill 6398 and it’s even intensifying. Until now, the Maharlika proponents have not disputed the glaring fact that the Maharlika project is going against the very rationale for establishing a sovereign wealth fund, which is the investing of surplus funds. They cannot point out where these surplus funds will come from. Certainly not from the LandBank, whose mandate is promoting countryside development and delivering quality and financial support services while remaining financially viable.
Has the LandBank fulfilled its purpose for its existence? The state of affairs in our countryside speaks for itself. Why get funds from it and place them in Maharlika when it cannot even sustain funding development projects in areas where they are needed? What about the Central Bank? Its present governor is not even sold to it. He is apprehensive as to how Maharlika will be efficiently managed without its managers succumbing to corruption and the politicians poking their fingers at it. What about the Development Bank of the Philippines, as another source of funds for Maharlika? The DBP was established to assist critical industries and sectors, promote entrepreneurship, help build more productive communities and advance environmental protection. Has it performed its mandate? Have its resources covered a wide array of community projects to build a progressive country? Its performance is not visible. If its contribution to nation-building is not perceptible enough, it could be that it is lacking in funds. If there are any surplus earnings, it is better used to fulfill the task of contributing to nation-building.
Economists have expressed serious doubts about the viability of this wealth fund. They say “the Philippines is still running a record high current account deposit, indicating therefore that the country’s domestic savings pool is not enough to fund investment needs.” They suggest that the Marcos administration should focus on its 10-point economic agenda. Business groups are up in arms against it.
The trade workers are opposed to it as well. Militant groups are for imposing wealth tax instead of creating wealth funds. Other lawmakers have thumbed it down as untimely.
The lawmakers pushing for Maharlika are saying that layers upon layers of anti-corruption audits are in place but don’t we have that too in other government financial and social institutions? Have we forgotten the financial scandal that rocked them and the filing of graft cases against their managers? PhilHealth, the Coco Levy fund and the Road Fund come to mind, to name only a few.
The Maharlika bill envisions a 15-man board that will run the entity but despite the increase in the number of independent directors from the private sector, the majority comes from the government sector. Given the record of government managers giving themselves fat salaries and allowances, there lies another source of abuse.
Yet the Maharlika advocates have not retreated from pursuing its passage. They continue to justify its creation, wax eloquently on the exponential windfall it will get from its investments. Their eloquence ring hollow and fall flat in the face of the realities that go against its birthing.
Why the bullheadedness or intransigence on their part? Why are they bent on advancing a losing cause? What’s the hidden agenda? Are they tempting the gods of destiny? Are they willing to sacrifice the political capital gained by President Ferdinand Marcos, Jr. in the last elections? Are they willing and ready to take the heat about to engulf them? Are they set to endure the political hailstorm that is forthcoming should they proceed with their naïveté if not recklessness?