“Still talking about that goddamn fund
even during and after holidays”
It seems that during and after the holidays news reports about the proposed “Maharlika Investment Fund” shows that the issue, despire supposed to be at the backburner doesn’t mean people will simply forget about it.
For as the president calls for the proposed law as “urgent” regardless of their statements, again establishing a sovereign wealth fund is hardly the way to promote economic growth and development while having neither surplus funds nor windfall gains from some sale of assets, but instead having a large fiscal deficit and an increasing public debt.
However, despite this concerns there are those who insist that “the government should prove that the proposed fund will directly benefit Filipinos” such as by venturing into infrastructure projects and by urging to attract private partners to coinvest in developing highly productive infrastructure assets. As according to congressman Johnny Pimentel of Surigao Del Sur, he urged that the fund should rather allocate to infrastructure rather than “merely hold passive assets such as fixed income instruments, equities, and bonds”.
Quite nice to hear those words from a legislator, but come to think of this: how about first address the basic problem? There’s an enormous debt to pay to begin with, followed by repairing some infrastructure particularly those affected by the recent floods, as well as the pressing need for addressing health care and education issues the national budget has to allocate on. Besides, that proposed wealth fund is likely to be debt financed as it has to borrow money from government financial institutions and claim it as a “seed money” to support such projects and operations- a retreat from its initial and controversial plan of “urging” these financial institutions to allocate its surplus funds for the proposed SWF.
But what is interesting tho is why the Central Bank, despite its initial disagreement decided to support the bill despite its gross international reserves were excluded from the list of possible sources of funding? Is the Central Bank forgot that this would compromise its independence and autonomy in maintaining monetary and foreign exchange stability? Such actions would affect the stability of the banking system as well as business activities. And to think that the proposed bill promises that this would be managed by “professionals” creates doubt especially when those who appoint them are nonetheless politicians looking after their interests.
Again as said before these people, politician or “technocrat” alike will always be at the scrutiny of the public, for the proposed fund is a matter of public trust as any form of public service provided to the people. Sadly, politicians and technocrats alike have less or no track record of trustworthiness. Imagine the bill excempts the fund from local and national taxes, while declaration of dividends to national government and review of contracts by government counsel. Public access to the fund record is subject to its board, leading to an observation that the fund becomes susceptible to corruption.
And from these people would also claim that these funds be used for “developmental” purposes like what congressman Pimentel said, the question is: will it be truly benefit the people? Or just seeing interest seekers reaping the “fruits of investment” coming from such “developmental projects” alongside stocks and other investment stuff using public funds?
Perhaps people should again recall the Coconut Levy Fund, Marcos wealth issue, the Napoles Scam that includes abuse of the Priority Assistance Development Fund, as well as others both small-and-big time alike that exposes the corrupt nature of beaucratic capitalism. Of course there will be those who will ask why there are sovereign wealth funds like those in Singapore, Norway, or even Vietnam- but those who handle it are trustworthy as they’re themselves at the mercy of the public.
Otherwise look at Nauru and its mismanagement of their wealth fund decades ago, for sure the Philippines doesn’t want that same situation to happen. There’s nothing wrong in the idea of having a Sovereign Wealth Fund but reality creates a situation that’s contrary to what they desire for- be it the lack of funds, the people involved, and the lack of trust towards those who insist.