“Expect debates or disapproval regardless of its passage”
(Or “all after talks about the proposed Maharlika Wealth Fund this January 2023”)
By Kat Ulrike
As one may observe, that regardless of the strong controversy surrounding the creation of the Maharlika Wealth Fund, with all the debates and amendments, that the proposed sovereign wealth fund is likely to pass into law. For the act to establish the sovereign fund has already been adopted by the House of Representatives, the Senate has not yet had a chance to consider it. However, the Senate has designated the bill as one of its top legislative goals for this year, and it is also ruled by loyalists of the administration.
Furthermore, this proposed sovereign wealth fund in which the president also insist its passage as urgent, is supported by the President’s economic managers, led by the Secretaries of Finance, Budget, the National Economic Development Authority, and the governor of the central bank, together issued a manifestly strong statement in support of the bill to create the Maharlika Wealth Fund.
However, with all the “support” from the government’s economic managers to that of the pro-administration legislators this administration-led railroading again shows this proposed law, claiming to be driven by the idea of the need to assist in funding the requirements of national development investments, is but a politically motivated one, amidst having neither surplus funds, nor windfall gains such as from privatization of public assets, while natural resources end coveted by entrenched interests without any return to the nation. Worse, to see rising debt and a lot of priorities (education, social services) to address with.
On the other hand, the idea of a sovereign wealth fund is long overdue as some legislators trying to pass laws similar to the proposed fund, albeit with certain differences (such as Senator Bam Aquino with his proposed Philippine Investment Fund Corporation (PIFC) that’s funded by surplus funds), but those were “good times” as the country had its surplus funds to begin with, but in this troubled times one would ask is this the time to venture into a high risk and untested scheme? And will that fund really benefit the country knowing that interest seekers like those bureaucrats/technocrats behind that proposed act wanting to siphon off its profits?
Expect debates regardless of its passage, but admittingly speaking, there is nothing wrong with having a portion of the country's funds invested in stocks in major companies or in real estate, but the current situation makes one think otherwise- especially when a concerned person would critically think if those behind that proposed wealth fund, if enacted, truly adhere to principles of good governance, transparency, and accountability as it implements. In other words, being subjected to public scrutiny as public officials (elected or appointed) in the first place. Besides, implementing international best practices in investing and managing assets “in accordance with Generally Accepted Principles and Practices (“Santiago Principles")” for SWFs doesn’t translate to being well-managed especially when a bureaucrat/technocrat involved has interests to carry with.
But regardless of their words this doesn’t stop people from critically observing if not outrightly disagreeing the proposed act and the people behind it. Not because of the use of investible funds from two pension funds that is, unconstitutional; nor forcing the Central Bank and other Government Financial Institutions to put excess cash in the proposed entity. But rather the tendency of today’s interest seeking bureaucrats and “technocrats” to emphasise their own interest above that of the people and the nation. That even neoliberals like Drilon also express concern particularly the need for improving the economic setting, of addressing issues on education, healthcare, and the likes; all after the economy has slowed down because of the pandemic with prices and fares increasing- if not the blatant neoliberal thought that governments shouldn’t engage in economic matters and letting markets decide in it.
As for the really concerned, again would strongly oppose that Marcosian venture but on the grounds that there's a lack of a clear and solid provision to prioritize investments in rural development, agricultural modernization, industrialization, sufficient worker/employee representation in the fund's governing body, a mechanism to directly distribute profits to the people, and a provision to prioritize investments in "green" jobs (especially in the renewable energy sector) could potentially limit any real national devlopment.
Again, regardless of its urgency or its passage, expect discourses, debates, and protests towards that “Maharlika Investment Fund”. There are a lot of priorities to begin with, but as a concerned who noticed these would say that with no excess cash for a wealth fund what more the people involved with questionable backgrounds means a hard time to sell.
For according to professor Danilo Lorenzo Delos Santos of De La Salle University he said in an article from the Philippine Star last December 3, 2022:
"It just doesn't fit the current puzzle we have that need to be prioritized such as that of post-pandemic recovery which, I think, will dominate and will be the proverbial measuring stick and probable legacy of the current Marcos administration,"
"In a time of crisis, expansive policies should take a backseat to policies that seek to stabilize and seek recovery than lofty plans that may look good on paper but don't fit the overall need and economic narrative," he added.