EconomyEditor's PickMaharlika fund billed as means of addressing power, food security

January 22, 2023
House Speaker Ferdinand Martin G. Romualdez — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Beatriz Marie D. Cruz

SPEAKER Ferdinand Martin G. Romualdez said on Sunday that the Maharlika Investment Fund (MIF) bill will help address rising electricity and fuel prices.

“Filipinos cannot wait. We have to bring down the cost of electricity, the cost of power, the cost of oil,” Mr. Romualdez told Manila-based reporters at Zurich, Switzerland.

Mr. Romualdez was at the World Economic Forum in Davos last week, where President Ferdinand R. Marcos, Jr. had sought to attract interest in Maharlika from potential investors.

The bill has generated backlash because of the proposed sources of the fund’s capital. The bill had originally designated the two major government pension funds as suppliers of capital to the fund, but these provisions were withdrawn, at one point leaving the Bangko Sentral ng Pilipinas (BSP) as the main funder from its own profits.

Albay Rep. Jose Ma. Clemente S. Salceda, who chairs the House ways and means committee, told BusinessWorld that the latest version of the bill has removed the BSP as a funder.

Michael Henry LI. Yusingo, a lawyer and policy analyst, said that the House version of the bill endorsed to the Senate cannot be revised.

“The House can withdraw that, revise it by repeating the process, and then endorse the revised bill to the Senate. Alternatively, a senator can file his own bill incorporating those revisions,” Mr. Yusingco said via chat.

The current MIF bill proposes government-owned and -controlled corporations (GOCCs) as funders, which Albay Rep. Edcel C. Lagman said could crowd out some basic services funded from GOCC profits.

“It must be recalled that dividends from GOCCs have been used for budgetary support. These dividends must not be parked in long-term contingent investments as they are urgently needed for immediate utilization to address the requirements of basic services like education, health, employment, food security and infrastructure,” Mr. Lagman said in a statement.

Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said by phone, “Those who are tasked to manage (the fund) incentivized but if they lose, who foots the bill?”

IBON Foundation Executive Director Jose Enrique A. Africa said in a Viber message, “The worst-case scenario would be the fund attracting dubious private investors who perceive the fund as having political advantages from being so eagerly pushed by high government officials predisposed to self-interested interventions.”

“You do not have to gamble this much (and) take on such a huge risk,” Mr. Peña Reyes said, citing foreign direct investment (FDI) channeled into exports as an alternative.

“That’s what our neighbors in ASEAN are doing. They are able to export more because they are able to attract more FDI. And we have the potential also to do that, if only we had the political will,” Mr. Peña-Reyes said.

Mr. Africa added, “The haste with which it is evolving to adapt to public criticism is actually a little suspicious and raises the question (asking) why the administration is in such a hurry to create a Maharlika fund in whatever form.”

Senator Juan Miguel F. Zubiri told DWIZ radio on Saturday that a counterpart measure has been filed in the Senate by Sen. Mark A. Villar, chairman of the Senate Banks, Financial Institutions and Currencies committee.

Sen. Sherwin T. Gatchalian, who chairs the Senate ways and means committee, told DZBB on Sunday that funding sources remain the Maharlika bill’s main sticking point.

“My main concern is where the funds for the Maharlika Investment Fund will come from,” Mr. Gatchalian, told DZBB on Sunday.

“There should be substantial funding for the investment fund in order to have a large return.”

Mr. Romualdez called on the Senate to work out all their concerns on the bill.

“For all those senators who may have contrary thoughts, just read the bill and deliberate it in the Senate and let’s take it from there,” he said.

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